| U.S. Supreme Justice Louis D. Brandeis"I live in | | | | structures, including offshore trusts and offshore |
| Alexandria Virginia. Near the Supreme Court | | | | insurance policies can often offer an excellent |
| Chambers is a toll bridge across the Potomac. | | | | solution to asset protection problems. Variable life |
| When in a rush, I pay the dollar toll and get home | | | | insurance policies and variable annuity contracts |
| early. However, I usually drive outside the | | | | which are compliant with U.S. tax laws, offer a |
| downtown section of the city and cross the | | | | wider range of investment opportunities, and are |
| Potomac on a free bridge. This bridge was placed | | | | often available at lower costs than comparable |
| outside the downtown Washington, DC area to | | | | U.S. policies for policies with total aggregate |
| serve a useful social service, getting drivers to | | | | premiums of over $100,000.Be careful in choosing |
| drive the extra mile and to help alleviate | | | | an Offshore Planning and Asset Protection Planning |
| congestion during the rush hour.If I went over the | | | | Consultant.A Web search will reveal hundreds of |
| toll bridge and through the barrier without paying | | | | offshore service providers offering various |
| the toll, I would be committing tax evasion. If, | | | | offshore tax planning and asset protection |
| however, I drive the extra mile and drive outside | | | | schemes, as well as company formation services. |
| the city of Washington to the free bridge, I am | | | | How do you choose one out of all of these?First, |
| using a legitimate, logical, and suitable method of | | | | look for a consultant with extensive tax |
| tax avoidance, and I am performing a useful social | | | | experience who can provide competent and |
| service by doing so.For my tax evasion, I should | | | | comprehensive U.S. tax advice. Most reputable |
| be punished. For my tax avoidance, I should be | | | | offshore service providers specifically disclaim the |
| commended. The tragedy of life today is that so | | | | U.S. tax consequences of their structures and |
| few people know that the free bridge even | | | | suggest that you seek the advice of U.S. tax |
| exists."Our progressive tax system in the United | | | | counsel. Less reputable offshore service providers |
| States facilitates the redistribution of wealth from | | | | will claim that their plans are set up in jurisdictions |
| the more fortunate to the less fortunate. Now, | | | | where there are no income taxes, no capital gains |
| the U.S. judicial system is also being used to | | | | taxes and no death taxes. While true - for that |
| redistribute wealth through litigation. Entrepreneurs, | | | | jurisdiction - the U.S. tax consequences are |
| business owners, retirees and others who have | | | | entirely different.There is no simple way to avoid |
| accumulated any significant amount of wealth are | | | | taxes offshore that cannot be done onshore. |
| often financially devastated by the U.S. judicial | | | | There are sophisticated means that work for |
| system.With that in mind, it is easy to see why | | | | legitimate businesses, but there are not "offshore |
| even a person of average wealth with assets at | | | | only" ways for the average investor, holding |
| risk would benefit from implementing a wealth | | | | marketable securities and acting alone, to avoid |
| management plan to protect assets from the | | | | income taxes on investment income. The most |
| claims - especially the frivolous claims - of | | | | predatory offshore service providers will simply lie |
| unknown future judgment creditors. Among many | | | | and tell you that for whatever reason, there are |
| other exceptions to liability insurance coverage, | | | | no U.S. taxes due on their preferred type of |
| most insurance policies do not cover punitive | | | | offshore vehicle ("you don't own the company - |
| damages or employment-related claims.Insurance | | | | you're just the manager;" "you don't owe taxes |
| against the most common source of judgments | | | | on offshore trust income;" "the Panamanian |
| and settlements over $1 million, automobile | | | | foundation is a separate legal entity without any |
| accidents, is only very rarely maintained at the | | | | owners, so you don't pay taxes on its income," |
| level necessary to cover such claims. In fact, it | | | | etc.). Bad tax advice can have grave |
| may be prohibitively expensive or impossible to | | | | consequences. Willful tax evasion and willful failure |
| insure at such a high level of coverage. While | | | | to file required information returns are, of course, |
| insurance is the first line of defense against legal | | | | serious crimes that can and do result in massive |
| claims for damages, it is impossible to insure | | | | fines and imprisonment. Even worse, for some, |
| against many sources of significant potential | | | | may be the fact that relying on the tax advice of |
| liability.It is essential to implement an asset | | | | an incompetent advisor may not even keep you |
| protection plan integrated with your estate plan. | | | | out of serious trouble - at best, it can result in the |
| Your asset protection plan will greatly enhance | | | | imposition of hundreds of thousands of dollars or |
| your estate plan by providing additional assurance | | | | more in fines and interest, and at worst, fines and |
| that you and your family will be able to reap the | | | | imprisonment.The hiring of a lawyer is an |
| fruits of your labor, and often, by providing the | | | | important decision that should not be based solely |
| means to make gifts of interests in protected | | | | upon brochures, advertising or other promotional |
| assets to family members - gifts which are | | | | materials. Before you decide, ask for written |
| protected from your unknown future creditors | | | | information about qualifications and experience.A |
| and from all of the creditors of your family | | | | sophisticated and creative tax planner can:* |
| members. Simply put, the objective of legitimate | | | | Transform tax plans from methods of |
| offshore asset protection planning is to avoid | | | | cost-containment to integrated systems of |
| litigation altogether by using a structure involving | | | | advanced tax risk management and value |
| the prudent use of professional advice and foreign | | | | creation;* Transform asset protection plans from |
| law; it is not intended to protect dishonest or | | | | ineffective collections of legal odds and ends to |
| incompetent persons from creditors. Legitimate | | | | integrated systems of advanced legal risk |
| tax-neutral, flexible offshore asset protection and | | | | management and security enhancement; and* |
| investment vehicle are available.International | | | | Transform individual financial plans and company |
| variable life insurance and international variable | | | | treasuries from piecemeal jumbles to integrated |
| annuities with reputable companies in secure | | | | systems of financial management and wealth |
| offshore jurisdictions can be attractive investment | | | | preservation.U.S. citizens should always consult a |
| vehicles. In addition to being well protected, | | | | competent tax attorney or CPA before |
| because they have different commission | | | | implementing any planning involving domestic or |
| structures they are not subject to certain U.S. | | | | foreign structures. Windward Harbor's principals |
| taxes, offshore life insurance policies and annuities | | | | are experienced tax planning, wealth |
| can be significantly less expensive than | | | | management, insurance, investment, tax, and |
| comparable products offered in the United | | | | asset protection professionals. We specialize in |
| States.►What Asset Protection Planning Is | | | | providing the most effective, legal tax planning |
| NotAsset protection planning and proper tax | | | | available for entrepreneurs and high net worth |
| planning do not involve tax evasion or anti-IRS | | | | clients. Windward Harbor will offer asset |
| theories. All solid well designed asset protection | | | | protection and offshore planning services only to |
| planning is done with full IRS compliance and | | | | clients who are committed to full U.S. tax |
| disclosure.Asset protection advice is not | | | | compliance.The materials found in this article, |
| "cookie-cutter" planning. Avoid cheap asset | | | | including these comments on asset protection |
| protection "kits" promoted by dozens of providers | | | | planning and offshore planning, are for general |
| via seminars or the Internet. Good asset | | | | informational purposes only. The information |
| protection advice is formulated on a case-by-case | | | | provided herein is not warranted to be accurate |
| basis. Neither does legitimate asset protection | | | | or current and must not be regarded as legal |
| planning does not involve hiding money offshore | | | | advice. All legal and tax planning is very fact- and |
| and using offshore credit card accounts. While it is | | | | circumstance-specific, asset protection planning |
| a bit more difficult to track protected assets | | | | and offshore planning, in particular. Internet |
| offshore than in the U.S., if you rely mainly on | | | | subscribers and online readers should not act upon |
| offshore secrecy to protect assets, you will likely | | | | this information without seeking professional |
| soon find you and your assets | | | | advice. You should consult a lawyer if you have a |
| parted.►Offshore PlanningOffshore | | | | legal matter requiring attention. |
| business structures and offshore estate planning | | | | |