An Asset Protection Template

W.I.L.’s most ambitious attempt at asset protection education is contained in Introduction to International Asset Protection. Those who find that publication too basic may find this page helpful for recalling or augmenting your existing knowledge, while we hope the asset protection neophyte is inspired to investigate further.

The table below presents simplified but explanatory asset protection strategies, ranging from least to most protection afforded. The point chosen on the spectrum will depend on an individual’s cost/benefit calculus and inherent toleration of disruption. Included in each strategy are pertinent assets and legal structures. The services page contains a comprehensive list of the legal structures offered by W.I.L.

Degree of
Implementation and Discussion
* Set up a foreign bank account. Doing a portion of your banking outside of your country of residence provides at least a modicum of jurisdictional diversification for your liquid assets, and insulates the balances held there from summary expropriation by the courts in your “home” country.

Note that the principal benfit to be gained by setting up foreign accounts is NOT secrecy. Which is not to say that setting up accounts in jurisdictions with strongly enforced bank secrecy laws is not beneficial. Anything that can legally be done to enhance one’s financial privacy tends to be positive. However, a number of the tax authorities in heavily industrialized nations require their citizens to report the existence of foreign accounts held. It is WIL’s position that reporting requirements that apply to you are best followed. The penalties for being caught violating them tends to outweigh the possible benefits.

Certain “loopholes” relative to reporting requirements are worth one’s attention. Case in point: If a U.S. citizen keeps the COMBINED balances of his or her foreign bank and other financial accounts below US$10,000 at every point during the year, then the account(s) is/are not reportable to the U.S. Treasury and I.R.S. Once the combined account values exceed the mentioned threshold, however, ALL of the accounts become reportable, whereupon the privacy value is certainly lost, even as insulation from immediate summary expropriation remains.

Setting up a bank account outside of your country of residence is certainly better than doing nothing. For most people with assets to protect, the limited reporting thresholds along with a compromised ability to retain account assets in an extended adversarial proceding once the account’s existence becomes known limits the protection available via this route.

** Liability-limiting legal structure in your home jurisdiction. Properly constructed, using any legal structure to house liability-causing assets will limit the risk to the net value of assets owned by the structure; the liability will not generally extend to the structure owners. Often the identities of the structure’s owners can be shielded, at least from routine inquiries. The New Mexico LLC is a good example of a structure which offers effective asset protection for a surprisingly low cost.

Note that this action is especially appropriate for immobile assets such as real estate.

*** Form a foreign legal structure and establish banking and investment accounts in its name. When properly established and operated, a foreign corporation, limited liability company, foundation, or trust provide comparable benefits to a similar setup in your home country with a FAR GREATER insulation from legal complications. Asset predators comtemplating mounting an action are faced with vastly greater costs with a much lower probability of ultimate success.
**** Become a resident of a country other than that of your citizenship. For citizens of most countries, establishing residence elsewhere will relieve one of the burden of paying taxes to his or her country of citizenship ... with a few exceptions – most notably, if you are a citizen of the United States you are still required to pay taxes on your worldwide income regardless of where you reside (though there can be exemptions for those that work overseas).

Instead, expats will owe taxes to their new resident jurisdiction, though many desirable countries only lightly tax foreign residents. When combined with measures discussed above, assets are additionally protected because an established foreign residence greatly reduces the ability of asset predators to apply pressure to you personally.
***** Complete expatriation: Maintain your primary citizenship in a country that does not tax nonresidents, and your residency in another country whose taxes are low. Obtaining an alternate citizenship is the ultimate tool in global lifestyle arbitrage.

Citizens of countries whose nationality implies obligations to follow rules antithetical to one’s values and wishes, such as:

•mandatory military service

•an obligation to pay tax on worldwide income, regardless of your country of residence

•restrictions on travel to various countries where you would like to visit or do business

... may find that obtaining citizenship in another country provides sufficient relief from such obligations or restrictions. Others will find it necessary to totally renounce their original citizenship as well.

Regardless of how nearly the above applies to you, virtually anyone of means will find that a second nationality (or more) will expand your opportunities for worldwide business and employment, augment your ability to travel conveniently to many countries, and provide something of an insurance policy in the event that your country of origin implements rules that are contrary to your interests or well being – financial or otherwise.

***** Learn to live with as few material needs and attachments as possible, appreciate what you have, and understand what it takes to create a truly fulfilling life. We are only half kidding. The protagonists in Ayn Rand’s Atlas Shrugged went on strike in order to deny “the looters” the sustenance needed to keep their (hyperbolically) rotten scheme afloat. Likewise, if people chose a more considered balance between time and money, that is, all the things money can buy, the parasitical political class would be worse off and everyone else would be happier to boot. Governments cannot tax time itself, only production and consumption. Spending time cultivating relationships and socializing demonstrably improves one’s happiness.

Our oppressors ultimately depend on our collective ceaseless grasping for more to feather their nests and fund the tools which facilitate their surveillance and theft. The vicious circle spawned is now threating to implode. Learn to see through the collective hypnosis that material consumption begets happiness, once one’s survival is comfortably assured. It just ain’t so.