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Listed below are
the things to watch out for if you’ve been shopping around for asset
protection. There are a lot of folks out there promising the world
for pennies on the dollar. Here’s what you need to know in order to
avoid making a poor financial decision.
Many unqualified
people are marketing themselves as asset protection experts. Always
check references and the training of the supposed expert. Anybody
claiming expertise in asset protection should have substantial tax
and international law training. You might also be tempted to go to
one of the free seminars where they will show you how to protect
your assets; by the way, you’ll also be pitched to buy their books
for $800…after all that is said and done, you still haven’t actually
accomplished anything in regards to protecting your assets.Usually
the seminar and mass marketing promoters are scammers. High-end asset
protection simply requires expertise and time...and it is usually
expensive. Avoid bargains because, like all things in life, you usually
get what you pay for.
If anybody promises
that an asset protection plan will save you income taxes: RUN. Asset
protection planning will not save you a penny on income tax (although
it can help with estate taxes).
Stay away from
Nevada corporations. For some reason, many of the marginal schemes
use Nevada corporations and addresses. This doesn't work and it is
a red flag. Nevada corporations are fine for people who live in Nevada;
they are
NOT a good vehicle for asset protection.
Promoters of Nevada corporations use "bearer shares" to obfuscate
ownership. They say no creditor can tell that you really own the assets
in the corporation. They also boast that the Nevada corporation is
tax-free. This is pure nonsense.
First, somebody owns the stock. If the "front man" they put
in place to hold the stock actually owns the stock, then Mr. Frontman
can take the assets of the corporation. This is black letter
law; the holder of "bearer stock" is the owner....unless the "front
man" is acting on your behalf. In this case the front man is
your agent. This is simple to discover in a debtor's exam. Remember,
this exam is under penalty of perjury. So to preserve the asset protection
you need to lie. If you tell the truth, the creditor gets the
assets. If you lie and get caught, you go to prison. Neither
are attractive alternatives.
Second, who pays the tax and the tax preparation? Don't forget,
this is discoverable. If it's an S corporation, then the trail
leads to you. If not, then Mister Strawman holding your stock
is in control of the corporation and can pocket the assets and leave
you holding nothing but an empty lawsuit, against a person who certainly
did NOT use Nevada corporations as an asset protection vehicle.
Third, the Full Faith and Credit Clause of the U.S. Constitution means
Nevada is REQUIRED to recognize and ENFORCE judgments in all of the
other 49 states, without question.
Fourth, the
promoters of Nevada corporations push the tax-free nature
of these entities. They forget the Unitary Tax rules.
If the assets in the Nevada corporation are really a Burger King
in California, believe me, California will get its fair share
of tax.
Finally, people who fall for this Nevada Corporation Scam and
then come to Strategic Advisors Inc. for real asset protection once
the judgments are starting to crowd them are always too late.
They are the owners of the assets put into the Nevada corporation
and any transfer of these assets into a truly protected environment
is NOTHING BUT A FRAUDULENT CONVEYANCE.
Please, don't get suckered by this TOO GOOD TO BE TRUE SCAM.
Most
of the folks who use Nevada corporations also advocate the use of
offshore IBC's (really, just offshore corporations which normally
cannot do business in the country which incorporates them). An IBC
(Offshore Business Corporation) is NOTHING but a regular C corporation
under the Internal Revenue Code and is subject to section 367.
This is bad
news for the SCAMMERS, which they never share with the customers,
because Section 367 TAXES all contributions of appreciated assets
to offshore corporations just as if the assets were sold.
As a result, there is often a HUGE capital gains tax due when
high value/low basis assets are transferred to an IBC. This
is the promoter's dirty little secret which will eventually bring
them down; but, not until it has destroyed the financial security
of many of their clients.
AVOID OFFSHORE IBC'S as an asset protection vehicle. They
do not make sense. A new asset protection rule: if somebody
promotes Nevada corporations or offshore IBC's as effective asset
protection entities, RUN--you are being sold a bill of goods.
Nothing but fraud.
Most people going to the purveyors of Nevada corporations or offshore
IBC’s are looking for affordable asset protection. Instead of
getting asset protection, they get a pile of bad advice which
can ruin them.
NEVER trust a foreign trustee (or anybody else) with your hard-earned
money. If somebody suggests that you have to "trust" somebody else:
RUN. At Strategic Advisors Inc. you’ll be asked to look to the letter
of the law when placing your trust, not an individual or an entity.
We'll Encumber
Your Property, Leaving No Equity To Take If a practitioner suggests
that a related entity encumber your assets with phony loans, RUN.
This is a popular scam and it doesn't work (but it will cost you a
lot of money and trouble).
Its Offshore--You
Don't Have To Pay Taxes Unless You Take The Money Back Into The U.S.
If a practitioner
suggests that the IRS can't find or tax the offshore account they
are recommending, then RUN because they are wrong. The IRS currently
has more than 400 people working in FINCEN. Their purpose is to locate
such accounts. Doing this is a crime and we have seen the United States
spend millions of taxpayer dollars to prosecute such crimes. Remember,
citizens or residents of the United States are taxed on their worldwide
income "from whatever source derived."
If you are asked
to lie: RUN. Asset protection should work because it is done properly.
You should never be put into a position where your protection depends
on deception. If all the details of your asset protection plan come
to light, you should not be compromised.
If a
practitioner suggests that you "give it away" (usually to a spouse
or child) it is usually too late, and this normally doesn't work.
It is always a bad idea unless you were going to make the gift anyway.
If a practitioner
suggests a "Family Limited Partnership" and touts the "charging
order protection" as adequate, get a second opinion, because it
often isn't.
Alaskan
trusts and Delaware trusts are being marketed as a great asset protection
tool. Well, they aren't. Don't forget the Full Faith and Credit clause
in the Constitution. Sister state judgments are enforceable in both
Alaska and Delaware. These trusts only benefit the lawyers and trust
companies in Alaska and Delaware.
Pure fraud. These
trusts, known in the trade as "Con Trusts" because they are advanced
by con men, don't work and they get you in trouble. Several circuit
courts have labeled them fraudulent as a matter of law. A year doesn't
go by that at least two people come to us to try to help them keep
their houses after using one of the variations of this scam. Don't
do it.
Offshore accounts
are great and safe if done properly; however, they will not save you
any taxes. Watch out for the often-touted "offshore credit card" which
will cost you a $200 processing charge. Most of these marketers are
just scamming you. Once you purchase the card, be prepared to wait
a very long time for its delivery.
Watch out for
the fee-based financial planners who charge a fee plus take sales
commissions. We have seen many people lose much of their principal
for the sake of asset protection. You never need to give up control
of your assets.
Won't help.
Might cost a quarter million or so...but, it won't do much more
than cause you a huge accounting and legal nightmare.
Strategic Advisors Inc.
will provide you with a solid, legal asset protection plan that
will be impervious to attack. In fact, we’re so sure of our services
that we offer this guarantee to you. If, after setting up your asset
protection plan you are sued, properly defended and the creditors
are still able to penetrate the asset protection…we’ll refund every
cent you paid to set up your asset protection plan. What could be
fairer?
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