Latest news with #assetprotection
Forbes
01-07-2025
- Business
- Forbes
Reporting The Foreign Trust In Your Backyard
The US Treasury Department building is seen in Washington, DC, January 19, 2023. (Photo by SAUL LOEB ... More / AFP) (Photo by SAUL LOEB/AFP via Getty Images) Cross-border asset protection planning involves delicate balancing of ensuring that trusts are properly classified because foreign trusts carry significant and expensive reporting obligations that are generally best avoided unless the tax-efficiency and asset protection benefits outweigh the heightened tax and penalty exposure. A foreign trust, contrary to its identification, does not need to be located outside the United States. Some trusts, located domestically, can be classified as foreign trusts under the Internal Revenue Code (IRC) which creates a plethora of generally undesired and unintended consequences. In 2024, the U.S. Treasury, issued long overdue regulations on foreign trust adding additional administrative reporting requirements, burdens, and qualifications on foreign trusts, highlighting the current importance of ensuring trusts are classified correctly. Defining Domestic and Foreign Trusts The Internal Revenue Code, Sec. 7701, defines any trust other than a trust that is a United States person, such as, a domestic trust, as a foreign trust. Under Treas. Reg. Sec. 301.7701-7(a)(2). a trust is considered domestic if it satisfies both the "court test" and the 'control test.' If a trust fails to meet either of these two tests, it would be classified as a foreign trust for U.S. tax purposes. Common Pitfalls Leading to Foreign Classification Some common trust drafting language that can result in a foreign trust qualification for even a trust located in a U.S. state include: Tax Implications of Foreign Trust Classification When a trust is deemed foreign, significant reporting and compliance oblgations are triggered upon U.S. persons associated with it, including grantors, beneficiaries, and trustees: Form 3520: This Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts requires U.S. persons with an interest in the trust to report certain transactions with foreign trusts, including transfers and distributions or face penalties of $10,000 or more based on a percentage of the gross reportable amount. Form 3520-A: This Annual Information Return of Foreign Trust With a U.S. Owner require foreign trusts with U.S. owners to file this return annually or face penalties of $10,000 or more based on the gross value of the trust assets attributed to the filer. The Risks of Misclassification Of A Domestic Trust As a Foreign Trust Suppose a U.S. family establishes a trust in Nevada, appointing a U.S. trustee and grants a foreign protector the power to replace the trustee. Regardless of the trust's domestic appearance, the foreign protector's authority over substantial decisions may subject the trust to foreign trust classification for failure to meet the control test and in addition to the reporting requirements, the filer may be subject to penalties and interest for failure to file in prior years also. Tips To Maintain Domestic Trust Status The following tips may support a trust to retain its domestic classification: Misclassification of a trust that is intended to be domestic can be dire and result in significant penalties which can be especially surprising for beneficiaries who do not expect to be subject to the complex U.S. foreign trust rules. The reporting requirements and penalties especially as detailed under the regulations released in 2024 can be expensive and administratively burdensome. Seeing penalty abatement for reasonable cause can also be time-consuming and expensive so preventing the misclassification is a better course of action. Following the case law and detailed criteria for trust classification and instituting best practices can safeguard individuals' trusts' domestic status and avoid unintended tax and liability consequences.
Yahoo
29-06-2025
- Business
- Yahoo
I'm a financial planner. These are the 5 key relationships all my wealthy clients seem to have.
Most wealthy individuals rely on a team of experts for financial and legal guidance. Key relationships include financial advisors, CPAs, attorneys, life coaches, and mentors. These experts help manage complexity, protect assets, and support personal and professional growth. I've been working with high-income professionals for over a decade, as a certified public accountant and certified financial planner. During my time working with wealthy clients, one thing has become clear: they don't achieve success alone. Behind every wealthy client is a trusted team — experts they rely on to make sound decisions and stay ahead. As the saying goes, "If you want to go fast, go alone. If you want to go far, go together." In my experience, all of my wealthy clients have five key relationships. As wealth grows, so does financial complexity. That's why it is crucial to work with an advisor who offers comprehensive services and acts in your best interest—a fiduciary. One of the most important areas where my wealthy clients seek help is with their finances. By working with a financial advisor, they ensure they have a comprehensive financial plan that supports continued wealth building, protects their assets, and enables them to share their wealth meaningfully. Delegating this responsibility frees up their time and energy to focus on income-generating activities, like running a business or managing investment properties. As soon as your financial life becomes more complex, it's time to bring in a CPA. Taxes are rarely anyone's favorite subject, and as income and assets grow, so does the complexity. Most of my clients have built wealth through business ownership, real estate, or investments — all of which come with significant tax and accounting challenges. Every wealthy individual I've worked with has had a strong CPA on their team, not just for tax compliance, but to proactively plan for the future. Don't wait until tax season to realize you need one. Whether it's bookkeeping, payroll, or advanced tax planning, a knowledgeable CPA helps ensure everything is done accurately and strategically. Many high-net-worth individuals face legal challenges at some point, whether it's from a disgruntled employee, an unhappy customer, or complex business dealings. To safeguard their assets, wealthy clients often have a team of attorneys covering areas like business law, estate planning, and family matters. They've worked too hard to build their wealth to risk losing it over avoidable legal issues. Legal protection isn't just about reacting to problems—it's about proactively shielding your assets from potential threats. Even if you're not yet wealthy, it's wise to begin implementing legal protections early. Asset protection isn't just for the ultra-rich — it's a critical part of building lasting wealth. Wealthy individuals often lead complex and demanding lives—running businesses, managing investments, or frequently traveling. With so much happening, it can be difficult to stay centered, grounded, and emotionally balanced. That's where a life coach becomes invaluable. Life coaches support their clients in improving overall well-being, finding clarity, and aligning their personal and professional goals. Whether it's navigating life transitions, managing stress, or seeking greater fulfillment, a life coach helps high-achieving individuals live with intention and purpose. Most wealthy individuals have trusted advisors in their corner — people they can count on for strategic advice and direction. Just as important, many of these individuals also give back by mentoring others. As they climb the ladder of success, they recognize the importance of investing in the next generation, understanding they didn't get to where they are alone. Mentorship becomes a way to carry the torch and uplift others on their journey. Jovan Johnson, CPA and CFP, is the co-owner of Piece of Wealth Planning and specializes in strategic tax planning, personal financial planning, and small business accounting. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
17-06-2025
- Business
- Forbes
How To Look Poor On Paper While Staying Rich In Reality
Jamie Farmer is Managing Partner of Financial Strategies Group, a life insurance industry leader providing clients with practical solutions. In a society where financial statements, tax returns and estate filings can be used against you, it may be time to change tactics. If you're wealthy and successful and face the potential for lawsuits, divorce claims among family members or estate taxes, your goal shouldn't be to flaunt your wealth—it should be to look like you have very little of it on paper. This isn't about hiding assets or evading taxes. It's about using legitimate, long-established legal structures to protect your wealth and control how it's taxed, transferred and potentially targeted. In short, you want to be rich but appear poor on paper. Imagine being sued. Would you rather show up in court appearing flush with liquid assets or appear modest, with little exposed wealth? Your financial posture can impact litigation outcomes, divorce proceedings and even how your heirs are taxed after your death. The same principle applies to your tax return. If you're in the 'rich club' on paper, you're often on the hook for the highest marginal tax brackets and surcharges. By contrast, the 'poor club'—those who control their income recognition, asset visibility and tax reporting—tend to legally owe less. This strategy doesn't require selling your home, trading your luxury car or altering your lifestyle. It requires a strategic shift in how assets are titled, structured and taxed. Your financial team, consisting of your attorney, certified public accountant (CPA), investment manager and insurance professional, should work in concert to help you build this structure. Many high-net-worth individuals operate with their advisors in silos. That's a mistake. The planning discussed here must be coordinated to be effective and to avoid unintended tax or legal consequences. Here are several key tools and strategies to reduce your visible wealth on paper while helping protect and preserve your real wealth: When selling a highly appreciated business or property, consider trusts like charitable remainder trusts (CRTs) or charitable lead annuity trusts (CLATs). These structures can defer or eliminate capital gains tax, offer upfront charitable deductions and, importantly, move assets out of your estate while still generating income for life. You don't own the asset anymore, so it doesn't appear on your balance sheet. But you can benefit from it. You can also use irrevocable dynasty trusts or spousal lifetime access trusts (SLATs) to freeze the value of appreciating assets and pass growth to heirs free from estate taxes and creditor claims. Institutional-quality cash value life insurance contracts, previously reserved for corporations, are now available to individuals. These policies offer tax-deferred growth, tax-free access via policy loans and income-tax-free death benefits that are all within a structure that's often protected from creditors under state law. (Life insurance cash value and death benefit creditor exemptions vary significantly from state to state.) In the current elevated tax environment, this form of life insurance is an increasingly attractive "tax never" asset. It also doesn't show up as income on your tax return, allowing for private wealth withdrawals with no reporting requirement. Compared to Roth IRAs, which are limited in contributions and phased out at high income, life insurance offers fewer restrictions. There are no penalties for early access, and the right policy avoids surrender charges and high fees that historically made life insurance less appealing. Many wealthy retirees make a costly mistake by waiting until age 73 to take required minimum distributions (RMDs). By doing so, they force taxable income into a narrow window and end up in higher tax brackets. Instead, take advantage of the U.S.'s progressive tax brackets by spreading distributions between ages 65 and 73. At the same time, build a robust tax-free bucket that includes cash value life insurance. Drawing from this bucket can help avoid bumping into top marginal tax rates. Another trap: failing to protect the inheritance you leave behind. Many affluent clients unintentionally expose inherited wealth to a child's divorce, lawsuit or creditor claim. With proper trust planning, those assets can be shielded even if the child has full control over them. These trusts can also help mitigate estate taxes. By removing appreciating assets from your taxable estate, you ensure that your wealth grows for the benefit of heirs and not the IRS. And if philanthropy is part of your legacy plan, don't wait until death to give. Many clients miss the opportunity to take valuable charitable deductions during their highest-earning years, losing the full benefit of the gift. CLATs allow for front-loaded deductions while still preserving family control of principal long-term. Professionals like physicians, attorneys and executives often find themselves locked out of traditional tax-favored savings due to income limits and contribution caps. Institutional cash value life insurance can help fill that gap. Unlike older policies with high fees and limited investment choices, institutional contracts now offer: • No surrender charges • Transparent and competitive fees • Dozens of risk-aligned investment options • Strong asset protection provisions • No age 59 ½ rule or five-year seasoning period These attributes can give affluent individuals another powerful asset in the 'tax never' bucket, allowing for tax-efficient growth, access and wealth transfer. Wealthy individuals face a strange paradox: The more you have, the more you must plan to look like you don't. Strategic tax, legal and insurance planning can reposition your assets, reduce what shows up on your tax return and protect what you've built from lawsuits, taxes and family disputes. By leveraging trusts, life insurance and coordinated advice, you may be able to create the illusion of modesty while preserving real wealth and control. The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
Daily Mail
11-06-2025
- Daily Mail
Walmart self-checkout error leaves customer calling cops after he's charged enormous sum for avocado
A shopper called 911 on Walmart over a self-checkout glitch — then claimed the store had 'robbed' him. An employee recalled the incident on Reddit, saying it began with pricing errors on a self-checkout register. 'This guy came up with a bunch of stuff,' the worker wrote in a post. 'He said one item said it was $9.99 on the shelf but was coming up $19.99. We got teamlead to check it out [and] got it fixed for him.' 'Same thing with another Item. That one we couldn't change.' Things really unraveled when the customer made a mistake ringing up avocados. 'I guess he accidentally hit 999 avocados instead of the nine he intended [and] his total jumped up to over $1300,' the employee said. The Reddit user claimed the customer told him to 'get the f***' away from him and dialled 911. However, the customer was in for a surprise after deciding to take on one of America's largest retailers. 'This dude creates a whole circus then shows everyone the self checkout screen. We fix it but he still won't shut up,' the employee claimed. By then, asset protection employees were involved and warned the infuriated shopper they would call him a trespasser if he didn't calm down. He refused to back down, and after demanding Walmart compensate him for 'pain and suffering and distress,' he was kicked out of the store. 'They do end up trespassing him, and since he won't leave, his own cops he called put him in handcuffs and take him outside,' the worker added. Other Reddit users claiming to be Walmart employees sympathized with the employee over the matter and shared similar work horror stories. 'Truly unhinged, but you know he absolutely was making a scene intentionally after the second "price correction,"' a commenter wrote. 'I had a customer who was causing a disturbance and making it very hard to work,' another person revealed. 'They kept threatening to call the cops. I dialed the number and handed them the phone. It's amazing how quickly they left...' Walmart registers have been a growing nuisance in the eyes of social media users. The company has been working to ensure customers are safe from card skimmers, and several stores are using gadgets at self-checkout. Some locations have also removed self-checkout lanes, while its membership-only retailer Sam's Club axed them out at all stores to explore AI 'Scan & Go' technology. The register changes came after the chain announced its plan to invest $9 billion in store makeovers. The remodeling began in at least 650 locations, but the company has not revealed if self-checkout changes were part of it. While the changes were meant to raise customer satisfaction, they were not enough to cheer up shoppers who were furious over price hikes from tariffs. With prices jumping as much as 80 percent, the retailer was forced to slash about 1,500 US jobs last month on top of the hundreds initiated by the company in 2024.
Forbes
07-05-2025
- Business
- Forbes
Fortifying Wealth With Offshore Asset Protection
Blake Harris is an Asset Protection Attorney and Founding Principle of Blake Harris Law. getty If you aim to become a millionaire, the U.S. may be the best place to build wealth, with nearly 22 million millionaires in the country as of 2023—38% of the global total. Asset protection lawyers (like me) often stress that offshore strategies can effectively shield wealth from lawsuits, divorce, creditor claims and regulatory overreach. Keeping all assets within U.S. borders leaves high-net-worth individuals vulnerable, making offshore diversification a key tool for wealth preservation. Legal threats, market volatility and government intervention pose significant risks. A survey found that 92% of affluent individuals fear liability lawsuits. Relying solely on domestic protections leaves gaps in security. Offshore asset protection creates legal barriers against litigation and economic instability but can—and of course, should—still comply with tax and reporting laws. This article explores key asset risks and how offshore trusts can enhance privacy, jurisdictional diversification and long-term financial security. Potential Risks Of Key Asset Classes Here are some of the key asset classes and their risks. Securities Investing in stocks and bonds is a primary way high-net-worth individuals grow their wealth, but these assets are vulnerable to economic downturns, market volatility and legal claims. Government-imposed restrictions on capital movement or sudden regulatory changes can also impact investment portfolios. Real Estate Real estate is a foundational asset class for many wealthy individuals, but it comes with significant risks. Property owners may face legal claims from tenants, contractors or business disputes. Government actions such as eminent domain, changing tax laws or zoning restrictions can also undermine property value and ownership rights. Economic downturns further compound the risk, leading to depreciated property values and liquidity challenges. Cryptocurrencies Digital assets have become a significant part of many modern wealth portfolios, but they are inherently risky. Legal uncertainty surrounding cryptocurrency regulations can make ownership precarious as governments and financial institutions continue to shape policies. Cryptocurrencies are also vulnerable to asset seizures in legal disputes and bankruptcy proceedings. Cybersecurity threats, such as hacking and fraud, further add to the risks associated with digital wealth. Strategic Offshore Asset Protection Approaches No asset protection plan eliminates all risks—market shifts and economic instability remain beyond our control. However, offshore structures can help minimize threats like lawsuits, divorce, creditor claims and government overreach. Strategic asset structuring can enhance financial security and better ensure long-term stability. In my professional opinion, the most effective offshore asset protection strategies begin with establishing an offshore trust, which places assets outside U.S. jurisdiction. Choosing The Right Offshore Jurisdiction Offshore protections vary by jurisdiction. Choosing the right one helps match an investor's needs with effectiveness and legal compliance. • Widely considered the gold standard for asset protection, the Cook Islands offer several legal advantages, including a refusal to recognize U.S. court judgments, that make them difficult for creditors to penetrate. • Nevis imposes significant legal hurdles for lawsuits against trusts, requiring plaintiffs to post a $100,000 bond before initiating legal action. • Belize offers a streamlined process for forming trusts, making it a strong choice for rapid asset shielding. Top jurisdictions impose significant legal and financial barriers, deterring creditor claims and minimizing asset loss risk. Diversification Across Jurisdictions Relying on one jurisdiction increases risk. Diversifying across countries can better shield wealth from legal and economic shifts. Offshore brokerage accounts allow investment in foreign stocks and bonds, while real estate holdings in multiple countries provide additional layers of security. Banking in multiple offshore jurisdictions can further strengthen asset protection strategies. Regulatory Compliance Challenges And Legal Considerations While offshore trusts offer significant advantages, they must be structured in full compliance with U.S. tax and reporting laws. The Reports of Foreign Bank and Financial Accounts (FBAR) and the Foreign Account Tax Compliance Act (FATCA) require U.S. citizens to disclose offshore financial accounts and report taxable income. Failing to comply with these regulations can result in severe IRS penalties. To avoid legal pitfalls, high-net-worth individuals should work with experienced asset protection attorneys who understand both U.S. and international laws. Proper structuring better ensures legal compliance while maximizing protection. The Millionaire Mindset: Proactive Wealth Protection Starting Early The best time to implement an offshore asset protection strategy is before a lawsuit or financial crisis occurs. Once legal claims are filed, courts may view last-minute asset transfers as fraudulent, limiting the effectiveness of offshore structures. Thinking Globally Countries with strong investor-friendly regulations typically provide better protection than the U.S. legal system, where creditor claims can easily freeze or seize assets. Consulting With An Experienced Law Firm Structuring an excellent offshore asset protection plan requires the guidance of legal professionals, tax advisors and wealth management specialists. A do-it-yourself approach to offshore planning can lead to legal complications, but proper guidance can help an investor achieve full compliance while maximizing protection benefits. Offshore trusts can be a powerful tool for modern millionaires seeking to better protect their wealth from lawsuits, market risks and regulatory changes. Strategic diversification across multiple jurisdictions can help create a financial fortress, better shielding wealth from unnecessary threats and better securing long-term financial stability. The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
