He called me the voice of anarchy.  We were discussing the state of affairs in the world today and the worldwide debt crisis that is causing an economic meltdown; or what I call ‘The Great Reset’.

While some people talk about how we will soon enter these tumultuous times, I would argue that ‘The Great Reset is in Full Swing’.  As an eternal optimist, these types of major structural changes are a positive going forward.  It will lead to smaller governments and more personal responsibility.

My new title given to me by my friend, Scott, reminds me of a book I read a few years ago titled, ‘Market for Liberty’ by Morris Tannehill.  Tannehill makes the case for a society completely devoid of any government influence.  In his utopian world, every problem is solved by the free market.

So while I am not a complete anarchist ala Tannehill (the book is very thought provoking), we could certainly use a massive cut back in governments around the world.

For productive members of society, there is little argument that government has far out stepped its boundaries in everyday life.  We have reached a point where it sometimes feels we are creating government programs, and their necessary tax increases, merely for the purpose of employing government workers.

Two days ago I was walking through a park near my flat in Riga and noticed there was someone working there collecting a small fee for usage of the public restroom.  Almost no one was using it, yet this woman was there all day just collecting these toilet fees.

While observing this, I just couldn’t help but think that the cost of paying her to collect fees was probably more than the amount received every day.

When you consider the huge deficits the US, Europe, Japan and many other countries are running these days, is there really any difference here?

We are just hiring workers to collect taxes, but the taxes don’t even come close to paying our bills.  So we borrow, borrow, borrow and destroy the productive capacity of future generations for the sake of ballooning the government payrolls.

At least the lady collecting toilet fees knows her job is shitty…

This week I am keeping the newsletter short and sweet.  This is the deadline week for publishing our monthly EscapeWealth Ezine, so this has consumed an enormous amount of time.  You can view this Ezine here.  We have articles every month from experts in the financial world about asset protection, investing, trading, and international living.

Nearly every week I get requests from readers looking for sources of more information about becoming better investors or traders.  While you can certainly get your master’s or PhD in finance or go work for an investment firm, in reality the easiest way to improve your skills is to learn from those who have a verifiable track record of success.

As one of my mentors once told me, “Leaders are readers.”  So below is a list of a few books I consider required reading for anyone interested in making a lot of money as an investor.

• The Intelligent Investor, by Benjamin Graham
• One Up on Wall Street, by Peter Lynch
• Reminiscences of a Stock Operator, by Edwin Lefevre
• Market Wizards, by Jack Schwager
• The Mystery of Banking, by Murray Rothbard
• Winning on Wall Street, by Martin Zweig
• Investment Biker and Adventure Capitalist, by Jim Rogers

These authors all have a long history of success; they aren’t just academics writing theory.  If you add these books to your repertoire of knowledge, you will certainly improve your odds of success as an investor.

If you are interested in getting a direct line to one of the best trader’s I know, I am hosting a free webinar for my readers next Thursday, September 8 at 7pm EST with Tres Knippa.

You can register for the webinar here.

Tres is a good friend of mine and a very accomplished floor trader at the CME.  He frequently appears on CNBC, Fox Business, and Bloomberg News.  You can view some of his appearances here, here and here.

Join Tres and me next Thursday for this free webinar where he will discuss the current economic environment and what he personally calls his retirement trade.

On a somewhat unrelated note, we are offering a 20% discount off the regular price of our Wealth Fortress Trust for the month of September.

Regardless, I have several things to discuss with you so here goes.

The past week has been one of the busiest weeks of my life. We launched our new asset protection product, the Wealth Fortress Trust©, and haven’t even had time to put it up on the website. To be honest, I’m not sure I even want to list it on the site, due to privacy concerns.

It’s a very interesting hybrid product that I have never seen anywhere else. Due to the weaknesses of various other entities like FLP’s, LLC’s, corporations and trusts, we created this structure that combines the best attributes of all of the above without the weaknesses.

I have been completely overwhelmed by the number of emails and calls received since discussing this last week. If you have sent me an email or left a message, I will get back to you. Please be patient.

To answer some questions and summarize the highlights of the Wealth Fortress Trust©, here are a few of the details;
• It is a US based structure
• Offers complete anonymity
• Your name is not registered in any public record
• You retain complete control of the underlying asset
• Provides bulletproof asset protection from potential future creditors
• Low cost structure with minimal annual maintenance requirements
This product is perfect for;
• Investment real estate
• Segregation of your operating business from the real estate (if you own your building)
• Investment or trading accounts
• Large cash, or cash equivalent accounts
• Owing shares or membership interest of privately held companies
• Private investment partnerships
• High value business assets like equipment and machinery
If this appeals to you, please forward me an email with your name, number and your availability and we can schedule a call to discuss your asset protection needs.

In addition to this, I have been working diligently on producing the July issue of our EscapeWealth Ezine. We have partnered with EscapeArtist as the premiere portal for asset protection and financial information for expats or would-be expats.

We are very excited about this development and our new media partners involved. EscapeArtist has been around since the mid-90s and the site attracts over 15 million unique visits per year. We also have a subscriber database of 400,000 readers who receive our monthly Ezine.

If any of you work in the asset protection or financial arena and would like to tap into this very specific niche, please drop me an email and we can schedule a call to discuss options.

As a side note here, please do not contact me if you are only interested in blasting sales copy out to our 400,000 subscribers. I will only accept partners who are willing to provide real value to our readers. None of us need any more spam in our email box.

In the news today (July 13), Bernanke announced he may launch a new round of stimulus. Is anyone really surprised by this? I know I am not. It is only a matter of time.

The supply of dollars has more than doubled over the past 3 years and yet unemployment is still climbing. Interest rates are at all time lows, yet new and existing home sales are in the gutter. None of these attempts to control a market economy will ever work in the long run.

It seems the only ones benefiting from this stimulus measures are big business, aka friends of government. I would advise you to tread lightly with your investments and keep in mind who it is that’s pulling the puppet strings when you are allocating funds.

The US policymakers are still playing by the Keynesian rulebook of economics. Ironically Keynes was a big supporter of communist ideals like central planning. Keynes even praised Lenin for his 5 year plan.

Communism has proven over and over again that it just doesn’t work. Yet our policymakers still continue to play by his rulebook. As Einstein noted, “the definition of insanity is doing the same thing over and over again expecting different results”.

Who are the insane ones now? The politicians or the ones that keep voting them in office…

On a lighter note, I have been reading an amazing book I would encourage each of you to check out. It is Beyond Wealth: The Road Map to a Rich Life by Alexander Green.

I don’t recommend books often, but this one certainly deserves a look. Alexander is the investment director of The Oxford Club. He has been writing investment research for many years and has a tremendous track record.

More importantly, he has found balance in his life and understands what is truly important. The book is a compilation of essays he has written over the years and pulls wisdom from great minds throughout history.

I’ve even had my 11 year old son read this book (of course he has also read The Fountainhead and Atlas Shrugged by Ayn Rand). If you are a reader (and everyone should be), give it a look.

The markets have shrugged off bad economic data and with minor glimpses of hope in the housing sector; everyone seems to feel good again as the market has seen one of the biggest one week rallies in years.

Personally, I remained hedged with tight trailing stops, lots of precious metals, and put options on the S&P500. In addition, I am holding lots of cash and cash equivalent investments. I still think there is better buying opportunities ahead.

Today I had a great face to face meeting with a retired couple who are in process of planting multiple flags. While they aren’t extremely wealthy, they have enough assets to be seriously concerned for their financial future.

As with many clients I talk to these days, they are also looking to move outside of the US because of their belief that the US is (or has already) gone to ‘hell in a hand basket’.

I couldn’t agree with them more. We discussed various options on protecting their investments, where to stash money overseas, and even a few ideas on where to live abroad.

Having spent a lot of time with family over the past week I fielded many questions such as;
• Why would you ever leave the US?
• Aren’t you concerned about your kids’ education outside of the US?
• Aren’t you concerned about safety in the country where you are moving?
I find it amusing that many people, my family included, think that the US is the only great place to live. As Americans we sometimes have tunnel vision thinking that we are the biggest and baddest on the planet so why would you ever choose anywhere else.

The reality is that there are many great places to live around the world. Lower cost of living, more freedom, less intrusion into your life, higher quality of education, less crime, interesting cultures, and the list goes on.

After talking to this couple earlier today (thanks again for lunch), they expressed interest in complete anonymity of their assets.

This is frequently a request I get. Many people are so concerned these days with the legal system and potential creditors, the biggest request now is to find a way to create complete anonymity for your wealth.

While this may sound easy, it is not. There are many ways to create a veil of privacy around your assets, but with most of these methods, your name is still attached to the asset in public record somewhere.

One way to keep your assets completely private is to use an offshore trust. This is also a great estate planning tool that can eliminate your estate tax burden and greatly benefit your heirs down the road. There is a huge incentive right now to move assets into an offshore trust over the next year and a half due to some tax law changes coming in 2013.

For many Americans, this is not ideal because of offshore tax compliance issues. I still believe wholeheartedly in offshore trusts for many cases, but I also understand this is just not the right tool for everyone.

Nearly all clients are interested in anonymity and asset protection. In some cases clients confuse the two. They think anonymity is asset protection. Certainly it has its benefits and in many cases is enough to deter potential creditors, but it is not synonymous with asset protection.

Frequently we use FLP’s (family limited partnership) and LLC’s for ownership of your assets. When forming an FLP or LLC, the strength of the entity is dependent upon the state of formation, the quality of the operating agreement, and the business purpose of the entity.

Anonymity can help disguise who the true managers or owners are of an entity. Many states list the Manager of an LLC or the General Partner of an FLP in the public records. The Manager or GP does not have to be a real person. In a corporation the officers have to be people but with the LLC or FLP, managers can be other LLC’s, corporations, FLP’s or trusts.

You can always name a nominee manager to keep your name away from public record, but that has many challenges as well and many people are no longer willing to provide this service anymore because of the legal ramifications.

Our firm has developed a special entity called the Wealth Fortress Trust©. Our Wealth Fortress Trust© allows you to maintain complete control yet have the anonymity that you desire.

Since it is a trust, the terms and conditions are private and do not have to be listed or revealed to any government agency. You can make decisions, sign on bank accounts, sign forms on behalf of the trust (or use an alternate trustee if you so desire) all without publicly revealing your involvement.

The trust is a much more economical alternative as you do not need to pay any government agency an annual fee to form or renew the trust. For those government web sites that list the name of the manager or general partner, people will now only see the name of the Wealth Fortress Trust© without any reference to the terms of the trust or who the trustee is.

We are very excited about this new product as it fulfills a need many of you have requested in your asset protection planning.

We have partnered with EscapeArtist to now run their asset protection portal – EscapeWealth. I am very excited about this project as it allows us to partner with the world’s leading information portal for freedom minded individuals.

This week we published our first Ezine with 12 articles about such topics as offshore trusts, 2nd passports, privacy, protecting your retirement accounts, trading and investing, and a very unique business opportunity that can be run from anywhere in the world.

So instead of going through my usual rant about the current state of affairs and offering suggestions on asset protection planning, I will just encourage you to just read this month’s Ezine for the details.

I would also encourage you to subscribe to our mailing list so that you can get this Ezine delivered each month directly to your inbox. Enjoy.

This subject is near and dear to my heart because this was the catalyst that got me into this business. As a lifelong entrepreneur, I have started, bought and sold several businesses over the years in several niches.

In my opinion, two of the most dangerous industries from a litigation perspective are real estate and restaurants. I have done both. Actually, I have done both simultaneously which is what prompted my interest in asset protection planning.

About 10 or so years ago I owned 2 separate, but related businesses. One company was a service company that provided home installation of products like fitness equipment, indoor game equipment, and outdoor play equipment. The company had service providers in about 18,000 zip codes (there are about 27,000 zip codes in the US).

The other company owned and rented real estate. Like many other small business owners, this started because I wanted to own the property where my other business was housed, so I bought the building. Then I bought another. And another. And so on.

Like every other self respecting 20 something business mogul, I also wanted to realize the ultimate dream of owning a bar.

So I bought one. It was actually a bar and grill across the street from a college campus so we did serve food, but ultimately, it was a bar.

As many of you may already be aware, running a restaurant is hard. And very time consuming. I had a partner, but he also had another business so the both of us were not able to devote the time it takes to be successful at this venture.

We did ok, made a few bucks and sold it a year later for 50% more than what we paid. In the process of selling, I began to think about shielding my other assets from any potential litigation that may arise from the risky endeavor of owning a bar.

During this time, I learned a lot about asset protection planning. While this stuff is intuitive to me now, at the time it was a revelation to learn what you can do to create a veil of privacy around your assets while keeping them legally disconnected from the rest of your business interests.
• I learned that you never, ever want to own any significant asset in your own name.
• I learned that you always want to segregate valuable assets into separate entities to limit the liability to that one asset.
• I learned how to legally eliminate equity in my real estate holdings to make them appear unattractive to creditors while still retaining that equity position through other entities.
• I learned how to limit my liability for each asset to a nominal value thus keeping my other assets safe from any predatory creditor.
• I learned how to make my assets invisible to prying eyes.
It’s a good thing I took the time to learn this stuff and implement my own asset protection plan too.

One year after we sold the restaurant, we were served papers by the local sheriff. We were being sued by the landlord of the property for failure to pay rent.

It seems that the landlord kept us on the personal guarantee for the commercial lease for the remaining 4 years and the party that bought our business defaulted on their lease just a few months after taking over.

We were being sued for about 3.5 years of monthly lease payments plus interest and penalties.

We were also being sued by the girls that bought the restaurant for misrepresentation of the business. They claim we lied about the revenue and the potential for the business.

Of course this was complete bullshit, but it didn’t stop them from finding a parasitic lawyer willing to take their case. They were suing us for the purchase price of the business, all of their monthly rents and expenses during their ownership, their loss of income based on what they thought they were worth professionally, and legal fees, plus interest.

Ultimately, we were being sued because we were perceived to be wealthy. Plain and simple. The landlord saw that we were the deeper pockets and the parasitic lawyers thought they had a payday.

Luckily for me, the asset protection plan I had developed worked like magic.

In the due diligence phase, the landlord’s attorneys could not find any assets that we legally owned so they offered a settlement. The settlement was negotiated down to about 10% of the original amount.

The lawyer for the girls who bought our business couldn’t find any assets either so he went back to his client and told them that he was not willing to take the case on contingency (commission) as originally offered and would need a large retainer (I don’t know the amount) to take the case. Since the girls had no money, they were forced to drop the case.

Restaurants are risky business. Potential creditors can come in many forms;
• Landlord
• Anyone who is on the premises either inside the building or in the parking lot
• Anyone who drinks alcohol at your establishment can have a claim based on your decision to potentially over serve
• Injuries from fights at the bar
• ABC board (agency that regulates alcohol purchases in some states)
• And the list goes on and on
These are just ‘inside creditors’, or potential liabilities that arise from the activity of your business.

There are also ‘outside creditors’, or potential liabilities making claims to the profits of your business from your personal activities. Most people think that by placing their restaurant inside a corporation, they are completely shielded.

This is incorrect. The shares of your company are an easy target for outside creditors just as like your shares of public companies like Walmart or GE. With your company shares at risk, a creditor can end up as your business partner or even owning your company outright giving him or her the right to liquidate the business to satisfy their claim.

There are many options when creating an asset protection plan for your restaurant business. There is no one size fits all approach.

I received several emails and calls in regards to this newsletter with questions and concerns about what was outlined. One email in particular summed up the majority of the questions so I will post it here;

Lamar said (I have posted the exact email),

Very interesting although many of the tax savings tips are valid right now there are a few concerns that investors need to be aware of with an offshore trust or account.

Many of the mega millionaires, Trump, Huizenger, use these strategies as part of their tax and estate plans however they will usually put their excess assets in these type of risky situations.

1) The money or asset is located and subject to the rules of the country in which it is located. Recently many investors in an offshore trust lost all of their money when the bank which held their trust money located in the country where the trust was located closed its doors. The bank was owned by the dictator of the country. He emptied the accounts for his own personal use. Investors had no recourse because many of these countries do not have a regulatory agency they can go.

2) As you have seen the IRS and federal government are closing many of the free tax haven doors of these offshore countries. There is no guarantee that when you are ready to give this money to your heirs that the US will not be able to tax it.

3) You need to have $5 to $10 million for this to really be beneficial and be willing to take a risk of losing it. Buyers beware, you have no control of the assets in this trust, the trustee’s do and no control over the going on’s in the country in which it is located. No recourse.

As with any investment you need to fully understand the risks and opportunities associated with it. Every investment has a place and time and is fit for an individual. You just need to make sure it fits your needs.

I need to keep this newsletter short and sweet, so I will address these concerns directly.

First of all, I want to note that with any type of offshore planning, thorough care is necessary as mistakes are easy to be made. Lamar is not completely incorrect with his concerns. If the planning is done incorrectly, these things can be handled improperly and expose you to risks.

1- It is not necessary for your trust and your assets to be held in the same country. For example, you could establish a trust in the Cook Islands that owns your business in Monaco and your bank account in Luxembourg. This minimizes your country risk by segregating the asset with its country of ownership. Our firm also has a hybrid trust that gives you the best of both worlds – offshore asset protection and estate planning benefits without the initial reporting requirements of offshore assets. I am a firm believer in internationalizing yourself and your assets. Don’t put all your eggs in one basket, no matter if that basket is in the Cayman Islands or the United States.

2- There is one thing I know about predicting the future – 50% of the time I am wrong. Of course there is no way for us to tell the future and what happens with tax policy in years to come, but I do know that if you move ownership of your assets to an offshore trust which now owns assets in various other safe countries, it significantly reduces the ability of the IRS to attach your heirs’ future assets. From the last newsletter, keep in mind that your heirs were not grantors of the assets held in trust; they are merely beneficiaries. As such, these assets would never be in their taxable estate, only any income that is repatriated.

3- This $5-10m number is completely false. Based on Lamar’s concerns, I can see where he would see this to be a minimum threshold; however I have clients with significantly less than that amount who have found offshore estate planning to be very beneficial. The control issue is the one I hear most often when dealing with trusts. It is a valid concern because the trustee now has title to the property held in trust. We use large professional trust companies in various countries for this task. They earn their living off of their fees generated from thousands of clients. It is not in their best interest to try to ‘steal’ your stock portfolio or your apartment building in Phoenix when that would destroy their reputation and crush their business. Not to mention the legal hurdles they would encounter trying to take possession of your property. It’s much simpler for them to just take your fees year after year along with their thousands of other clients. Another way we eliminate the control issue is by having each asset owned by a separate entity – like an LLC or IBC. With you as the LLC or IBC manager, you retain managerial control of the asset, while the trust owns the equity in the LLC or IBC. By injecting this additional layer in your estate plan, you retain all control of your assets while still getting the asset protection and estate planning benefits offered.

Don’t get me wrong, our current tax system in the US has reached a point where it is just downright immoral. Yes, I said it – our tax system is immoral. But I think there is a legitimate role to play for government and thus taxation is a necessity.

Taxes fund government expenditures. Clearly government has now expanded well beyond its role in society – defense of property rights and we are now paying for things we don’t really want or need. In my view, a government should exist solely to protect my rights as a human being.

At what point did we not only allow, but require our government to;
• Educate us and our children?
• Provide us with health insurance?
• Become the police force of the world?
• Take care of us when we don’t have a job?
• Determine which businesses fail and which ones are saved from failure?
• Regulate the cost of money?
• Take care of us in retirement?
• Tells us what kind of car we can drive?
• Tell us what we do with our own property?
• Take our property for the “common good”?
• And the list goes on and on…
We have reached a serious disconnect with the purpose of government. At one point in time, government existed to serve the people. It has clearly evolved where the people now serve the government.

Don’t think so? When did you vote to bailout GM, AIG, Fannie Mae, or Bank of America?
When did you vote to hire the new Czar’s in the Obama administration that control various aspects of the government?

Right now Obama has 37 Czar’s including;
• Foreign aid czar
• AIDS czar
• Bioethics czar
• Bank bailout czar
• Border czar
• Climate czar
• Ethics czar
• Great Lakes czar
• Health czar
• Weapons of mass destruction czar
• And my favorite – Czar czar (yes, this one just makes sure the other ones do their job)
Czars basically serve the purpose of executing the government’s agenda outside of the bounds of voter approval. Did you vote for any of these czars? Keep in mind; your tax dollars pay their exorbitant salaries.

One of the biggest disconnects that I see now is that our elected officials don’t actually serve the people now. We are now slaves to the state.

As you file your tax returns or extensions today or tomorrow, think about what those tax dollars really pay for.

With that said, over the next couple of years, it is imperative that you develop your own asset protection plan. Part of this needs to be tax planning. While it disgusts me that we should have to jump through so many hoops to minimize our tax burden, it is just part of the game that must be played.

Today I will share with you one very large opportunity; one that could save you millions of dollars. This involves offshore estate planning.

In the 2010 Tax Act passed by Congress late last year, there are estate tax rules that only apply to 2011 and 2012. The tax benefits arise from taking advantage during this short window of opportunity.

For 2011 and 2012, you are granted a $5m exemption from gift tax. Starting in 2013, the exemption drops to $1m and the tax rate rises from 35% to 55%.

If you have the ability to write your heirs a check for $5m over the next few months, you can avoid this estate tax and reduce your taxable estate by $5m.

Of course this is not the ideal situation because now you no longer have access to the money and have given it to your kids.

The solution is to use an offshore trust. You can gift the $5m to your trust and remain a discretionary beneficiary – meaning you have the ability to receive distributions but do not control it (the trustee provides this function). Essentially, you would be giving the assets away to your heirs while retaining beneficial use of those assets.

The offshore trust offers many benefits not available with US domestic trusts;
• Unbeatable asset protection from creditors
• Protection from asset seizures
• Access to foreign investment options
• After your lifetime, the trust is completely disconnected from the US tax system – meaning your heirs have no tax liability for undistributed gains from the investments
• Just as easy to manage as a US trust
Keep in mind too; this $5m exemption is per person. If you are married, you get a $10m exemption. If your estate is less than this amount, you can transfer all of your assets into an offshore trust and completely bypass estate taxes while giving your heirs the ability to manage the trust outside of the US tax system after your lifetime.

Granted, many of you may not have assets this large, but keep in mind the size of your assets can and hopefully will grow over time. In 2013, the estate tax threshold lowers to $1m and the tax rate rises to 55%. Even if your estate is only $1-2m now, this type of planning still makes a lot of sense.

I am certain most of you will bypass this opportunity to save potentially millions of dollars in estate tax. It’s always on your ‘to-do’ list, but is never a priority. It’s not a sexy topic that offers you immediate benefit.

Many of you will say that you already have set up a domestic trust. While that is a good start, it doesn’t provide you with this type of tax savings and asset protection. Some of you don’t want to do this because you think your heirs will gain access to your wealth and waste it. This is easily solvable within the trust.

Some of you think you don’t want to establish an estate plan now because you want to continue to use your assets. This is one of the silliest arguments because once the assets are in the trust, they are untouchable by potential creditors but you retain beneficial use.

Some of you are just procrastinators. But as the saying goes, “If you plan to fail, you fail to plan.”

When it comes to asset protection the majority of attention is given to investment real estate with scant advice on how to protect a personal residence. If you are fortunate to live in a state that offers a larger or all-inclusive homestead exemption, this is not a concern. For everyone else the picture is less clear.

Most attorneys and insurance agents will advise you to carry an umbrella policy and not to worry. This thinking is naïve and not representative of how insurance companies view claims; deny, deny, deny, then, pay if forced.

Of course the assumption here is that the claim you now face is covered under your policy. For example, contract disputes, defaults, environmental claims and bankruptcy are just a few of the items insurance will not cover. What to do, you may ask…

Last week I received a call from a woman in California. Let’s call her Susan. Susan owned several rental properties in the Southern CA region and due to the housing crisis; she is upside down in all of her houses, except one – her residence.

To be clear here, I am not trying to justify her financial acumen or skill as an investor, only using this as an example for the sake of the rest of you who may want to consider asset protection planning as it relates to your home. Susan had refinanced her investment properties over the past 3 years to pull cash out to satisfy some unrelated debt leaving here with very little equity in the houses.

Of course as we are all well aware, housing prices plummeted over the past 3 years leaving her with negative equity in all properties, except her personal residence. Susan was trying to renegotiate with her lenders to reevaluate the terms of the mortgage and in some cases short sale the properties.

Once the lenders discovered through their own due diligence that Susan had significant equity in her personal residence, the banks shut the door on negotiations. They are pursuing her personally for deficiency judgments and seeking foreclosure of her home to satisfy them.

As you can imagine, the umbrella policy her attorney and insurance agent recommended offer no comfort at this time. Now Susan is looking at foreclosure of all properties, including her home.

I would love to say we solved her problem and found a way for her to keep her home, but alas, it was too late. She missed the boat. You don’t buy car insurance at the scene of the accident.

Susan’s problem could have easily been solved if she had taken any one of the following actions to protect the equity in her personal residence several years ago.

Home Equity Line of Credit -

Susan could have applied for a home equity line of credit with a bank different from those that held her investment loans. When taking out a line of credit the lender would secure the credit line against the equity in the residence via a deed of trust. She could have made her home appear encumbered making it unattractive to an aggressive creditor.

Friendly Line of Credit (also called Equity Stripping) -

The friendly line of credit is the same as the home equity line in principal with one exception – your entity will serve as the bank. In today’s lending environment lenders are reluctant to provide more than 75% on home equity lines if at all. So, a convenient workaround involves creating an LLC in Nevada that provides anonymity of control and ownership. After you create the anonymous entity, you direct your company to enter into an equity line with yourself whereupon you provide the equity in your personal residence as collateral, i.e., your entity will record a deed of trust against your residence for any amount you deem necessary to protect your equity.

The great thing about this strategy is you are in full control of the credit line so you can increase and/or release it at any time. From the aggressive creditor’s point of view you have borrowed money from a Nevada entity that holds an equity position in your home.

Qualified Personal Residence Trust – “QPRT”

Just as the name implies, this trust is set up to hold your personal residence. The QPRT is mainly thought of as an estate-planning tool. It works as follows: the owner of a personal residence transfers it to a trust, but retains the right to live in the residence for a specified period of years. At the end of that time period, the heirs become the owners of the residence. Thereafter, the residence will no longer be a part of the former owner’s taxable estate. An ancillary benefit missed by most attorneys is that by placing the residence in trust it is removed beyond the reach of the homeowner’s creditors.

These are just a few of the strategies I use to help my clients’ protect one of their most important investments from the threat of attachment. Like all planning, starting early before the hounds are at your doorstep is of utmost importance.

Call today for your free 30 minute consultation. Until next week, live well.

Most of the presentations at Fonds were in German, but I attended two that were in English.  One was presented by Jim Rogers, former partner to George Soros at the Quantum fund and the other was presented by Robin Batchelor from Blackrock.  I was especially interested in attending these presentations because they focused on the future of commodity investing.  Considering the world we currently live in, commodities may be something you should personally look at from an investment perspective.  I know I am.

Rogers focused on foodstuffs and metals while Batchelor focused on energy.  They both had essentially the same message; we have a growing population and a shrinking base of investment into production of necessary commodities.  From a long term perspective, we have nowhere to go but up with commodity prices.  Think about it, how many people do you know tell their kids, go to school, get a good education, and work on the farm?  People need to eat and we need famers to produce.  Right now we have a shrinking base of farming activity, but the population of the world is projected to triple in the next 30 years.  We have to feed them somehow and the law of supply and demand says commodity prices must rise. 

The same holds true for oil.  Oil is primarily a transportation fuel.  Most of your developed nations are near a peak or even in a decline with oil consumption.  But China and India alone have nearly half of the world’s population with a hugely growing middle class.  Right now they are consuming the same amount of oil per capita as the US was in the ‘20s.  Do you think China and India’s consumption will go down, or up?  My suggestion here is to look into portfolio diversification and take a long, hard look at commodities.  There are many ETF’s now that track various commodities so it is no more difficult than buying Wal-Mart stock.

I also had a great meeting with a guy named Raoul.  Raoul runs a family office for wealthy individuals and families.  This is not a common practice in the US, but it is quite intriguing.  His firm does not actually manage your money, but they provide you with the tools to assist with asset allocation and risk management.  He also selects and works with your money managers, banks, financial planners, tax planners and anyone else involved with your finances to make sure you are getting what you are paying for.  He can help you find the best money managers, place your money in Swiss banks (or anywhere else), and make sure you aren’t taking unnecessary risks.  His firm can provide you with online access to your portfolio whether it is in real estate, cash, securities, gold, or cattle.  He can even tell you if you have too much money tied up in cattle at any given moment.  It is quite a revolutionary service he offers and for a very reasonable fee.  He charges a small fee based on your asset holdings.  He gets no commission for advising you to buy X stock, or Y commodity.  The more your assets grow, the more he earns.  And most importantly, he is connected.  Very well connected.  He can still provide American citizens with Swiss private banking services and connect you with money managers you would never be able to have access to otherwise.  If anyone is interested in contacting Raoul, please let me know.  I will make the introduction.

I would really like to hear from my readers.  If you have some specific topic of interest, please let me know.  I would be happy to discuss it with you personally, or I can write about it on our blog or in the newsletter.  Feel free to contact me today for your free 30 minute consultation.  Until next week, live well.

There is nothing illegal or immoral about offshore asset protection.  In reality, it is not even difficult or complex as many would have you believe.  In many cases it is as simple as establishing an offshore entity to own assets you already own like stocks, bonds, gold or private company stock.  In some cases it involves the use of trusts.

I have touched on the tax benefits and how that can be a significant benefit, so I won’t dive into that too deep here.  But if your business meets certain requirements, it is possible to move it offshore and defer taxation…indefinitely.  One of the biggest threats to your wealth is destruction through taxation and this tool can offer you the ultimate in offshore asset protection.

Aside from tax benefits, what are the other benefits?  The ‘what’s in it for me?’ question.  Another major threat to your wealth is litigation.  Litigation poses a huge threat and takes up an enormous amount of resources in the modern age.  In recent reports, litigation amounted to 2.3% of our GDP.  Think about that for a minute.  In 2009, the US GDP was approximately $14T, which means litigation cost US citizens and businesses about $322B.  To put that in perspective, Norway’s 2007 GDP was 391B. 

My point is, litigation is a very real threat to your wealth and a very large cost.  As your wealth grows, so does the size of the bulls-eye on your back.  This is why proper asset protection planning is critically important.  And an offshore strategy is not just for the super wealthy and criminals.  It can be for you as well.

Let me illustrate a simple example.  Fred owns a small business in rural Kansas.  Fred has owned it for many, many years and has accumulated about $2m that he has begun investing in the stock market.  Fred also owns a home with land in Kansas.  Fred has a nice life, a good income, and a fair amount of investments. 

If Fred is in a car accident and the other driver is injured, the plaintiff attorney, Lucifer, will want to find out what Fred is worth in order to determine if he is to pursue Fred beyond his insurance limits or just drop it there.  Lucifer finds out Fred owns a house, a business, and a $2m investment portfolio, all in Kansas.  Easy pickings.  Lucifer takes Fred to court, court issues judgment, and Fred is cleaned out.

Fred’s neighbor, Jacob, also owns a small business in Kansas.  Jacob also has amassed a $2m investment portfolio and a nice house in Kansas.  But Jacob has moved ownership of the shares of his business to his offshore entity.  His offshore entity also owns his investment account, which is held in a bank in Luxembourg.  Jacob’s house is owned by a NV LLC, and the NV LLC and the offshore entity are wrapped up into an Integrated Asset Protection Trust (IAPT). 

While Fred and Jacob are in similar positions, assuming Jacob also has a similar traffic accident, they are in much different situations after the accident.  First of all the plaintiff attorney, Lucifer, will likely find too many roadblocks in front of Jacob’s wealth to attempt to pursue.  Where does Lucifer file a lawsuit?  Kansas, where Jacob lives?  NV, where his LLC that owns his home is registered?  Belize, where his offshore entity is registered?  Luxembourg, where his investment portfolio is held?  or Cook Islands, where his trustee office is?  As you can see this is quite a dilemma and the roadblocks are many for poor Lucifer.  Meanwhile, Jacob is safe and sound at home, sleeping peacefully knowing his assets are well protected.

Don’t be Fred.