Wealth International, Limited (trustprofessionals.com) : Where There’s W.I.L., There’s A Way

Offshore and Your Wallet

wallet Offshore strategies that have provided effective legal mechanisms for the defense of personal property include structures such as Discretionary Trusts, International Business Companies (IBC’s), Limited Liability Companies (LLC’s), Private Family Foundations, Companies Limited by Guarantee, Bearer Share Companies; and contractual arrangements such as option or agency relationships, bailment, and offshore variable life insurance policies and annuities.

Traditionally, offshore planning for the management and protection of assets has been -- not unjustifiably -- associated with the wealthy. But as society has grown more litigious, as government has grown more confiscatory, as the investment marketplace has become more globalized, and as people have become more cognisant of the benefits of offshore planning, demand for these tools and strategies have increased sharply.

For many years, the “king” of the offshore planning vehicles has been the Discretionary Trust. Industry specialists estimate that some 40% of all assets held offshore are held by offshore trusts, amounting to as much as a quarter of the world’s total investment wealth.

One of the main factors that has traditionally made including offshore trusts in one’s financial planning prohibitive for most people has been the cost. Aside from frequently exorbitant set-up fees, frequently ranging anywhere from $5,000 to $25,000, annual trustee fees are frequently calculated on a percentage basis of the assets held under management. (The percentage charged often decreases as the sum under management increases.) For the small to mid-sized investor, these fees can easily amount to several thousand dollars per year -- in ADDITION to standard operating costs such as transfer fees, broker commissions, etc. -- making the trust vehicle impractical.

Wealth International, Ltd., however, has made the premier financial planning vehicle and the top choice of the world’s wealthy, the Discretionary Trust, a rational economic choice for almost everyone. Becoming a client costs only $950. In addition, the Trustee is one of the few firms that charges FLAT annual fees (currently set at $150 per year, levied in quarterly installments), which amounts to drastic savings to the medium and larger investor.

W.I.L.’s inexpensive fees are not only cost effective when compared with other offshore trust offerings, but also when compared to the alternative structures and contractual arrangements mentioned above. In addition, our years of expertise in the field coupled with our highly adaptable, cutting-edge approach to asset protection, personal attention to each client, and strict commitment to doing everything “by the book”, allows us to provide a level of service that is rivaled only by the services of the most savvy (and costly) trust attorneys. This effectiveness -- even before taking costs into consideration -- makes W.I.L. an outstanding choice for your planning.


Count the Costs

wallet The following table compares the economic impact of immediate taxation on a client’s portfolio with the costs of establishing an offshore presence (from an investment perspective). The average offshore trust provider and Wealth International, Ltd. are both listed for comparison purposes.

Fees are listed in terms of a percentage of the client’s total investable wealth -- hereinafter “TIW”. For example, in our illustration below, a client with a TIW of $25,000 could expect to pay $500 (2% of TIW) each year in taxes on investment profits (for calculation purposes the tax rate is left the same for all TIW levels). However, for a one time fee of only 3.8% of TIW and annual fees of only 0.6% of TIW (both percentages decrease as the client’s TIW increases), the client effectively obtains insurance against lawsuits and confiscation, access to international investment opportunities, and some tax benefits as well.

If you were to consider the following economic benefits from going offshore:

  • Avoided liability insurance costs
  • Whatever value you would assign to the decreased danger of asset expropriation in its many possible forms (direct insurance against such losses is not available to our knowledge), and
  • The incremental after-tax investment returns made possible

then you might well conclude that the benefits decisively exceed the costs.

Total Investable Wealth Taxes*
(On funds invested onshore)
 Standard Offshore Providers**
(Initial Cost / Annual Fee)
 W.I.L.***
(Initial Cost / Annual Fee)
       $5,000      $100 (2%) 50% / 40% 19% / 3%  
     $10,000      $200 (2%) 25% / 20% 9.5% / 1.5%
     $25,000      $500 (2%) 10% /  8% 3.8% / 0.6%
     $50,000    $1000 (2%)   5% /  4% 1.9% / 0.3%
   $100,000    $2000 (2%) 2.5% / 2.0% 0.95% / 0.15%
   $250,000    $5000 (2%) 1.0% / 1.0% 0.38% / 0.06%
   $500,000 $10,000 (2%) 0.05% / 1.0%   0.19% / 0.03%
$1,000,000 $20,000 (2%) 0.25% / 1.0%   0.10% / 0.02%

*   For purposes of the illustration, investment growth is calculated at 8% anually and taxes are calculated using a 25% marginal rate. The 8% figure is slightly below the long-run average 9% annual return of the U.S. stock market -- actual results will obviously vary based on an investment portfolio’s asset composition and market trends. The tax rate is believed to be moderately conservative, in the sense that it does not impose an artificially large penalty for staying onshore. Actual tax rates will vary based on your level of taxable income and your residence for tax purposes, not to mention the often haphazard effects of tens of thousands of pages of tax-code minutiae.

    Taxes must be paid on offshore earnings once they are repatriated. However, note, e.g., that $1000 compounded at 6% (8% less a 25% tax rate) per year for 10 years is $1791, while if $1000 is compounded at 8%/year for 10 years and the cumulative gain is then taxed at 25% the resulting amount is $1869. The difference is equivalent to earning an additional 0.75% yield per year over the 10 years.

**  The listed initial cost is based on a $2500 set-up fee -- a price that one might expect to pay when utilizing a reputable wholesale/direct offshore trust provider. This would not represent the lower prices of a trust-mill that might merely sell you a “do-it-yourself” piece of paper with no follow up service, nor would it represent the much more costly, but more personalized services of a trust attorney. Such outfits often charge annual trustee fees in the range of 1% of the total assets held, with typical annual minimums running in the $2000 range. A worthwhile trust attorney would normally charge much more.

*** Based on $950 set-up cost and $150 annual trustee fee.

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