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Put Your Estate Worries to Rest
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Thursday, January 18, 2007
Vol. 9 No. 16 |
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In Today's Letter:
Comment: Put Your Estate Worries to Rest
Offshore: The Billionaire Brits Go Offshore
Wealth: Next Frontier in Emerging Markets
Privacy: The Blind Leading the Blind... Literally
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Put Your Worries to Rest:
4 Ideas to Get Your Estate in Order
Today's comment is by Erika Nolan, Executive Director and Founding Publisher of The Sovereign Society.
Dear A-Letter Reader,
What happens if you DON'T plan your estate?
Say you procrastinate until the relatively young age of 47. You're in perfect health so you keep telling yourself "47 is the new 37...I have plenty of time."
Then tragedy hits. Whether it was a car accident or a sudden aneurism, the result is the same. Your family is left without you.
On top of their grief, your family also must cope with the mess of the unplanned estate you left behind. Assuming your business and other assets (or your "gross estate") are worth more than US$2,000,000, your family will be stuck with a considerable tax burden. In fact, your family could have to hand over 80% of your total estate just to pay income and estate taxes. That's quite a chunk.
Remember, the IRS considers your entire gross estate to include "cash and securities, real estate, insurance, trusts, annuities, business interests and other assets,". As you can see, there are few exempt assets that can be subtracted. But for the most part, your estate includes nearly every asset you own.
And if US$2,000,000 was not a low enough threshold for estate taxation already, consider that the IRS is dropping the taxable limit back down to US$1,000,000 in 2011. That's only four years away. As Forbes recently wrote "You don't have to be fantastically rich to concern yourself with estate planning issues."
So the best way to plan for your estate is to simply prepare now, so you can move on with the rest of your life.
And if you're already planning your estate, consider an offshore solution. By taking your estate offshore, the assets you leave to your heirs will enjoy the same protection as other offshore assets. In other words, your estate assets will enjoy greater protection from creditors and lawsuits and remain as confidential as possible. Plus, an offshore planning solution will help you pass your assets onto your heirs with as little hassle as possible when the time comes.
Here are a few offshore ideas to consider...
1. Trusts: If you choose a trust-friendly offshore jurisdiction, a simple trust can significantly reduce your estate taxes for your spouse. Some trusts can also allow maximum use of gift tax exemptions through something called "planned giving." You can also set up your trust to provide your spouse with an income after you're gone.
2. Family Foundation: This unique offshore solution allows you to manage your estate for the benefit of children, parents, grandparents, or other relatives. In time, the assets you safeguard in your family foundation, will be managed by your heirs. This can go on for generations.
3. Variable Annuity: You can set up an offshore annuity that's completely separate from your ordinary estate. Upon your death your beneficiaries can immediately access the funds in your annuity, without having to wait for a certificate of distribution.
4. Life Insurance: An offshore life insurance policy is specifically designed for estate planners who want their heirs to have the least fuss possible after they're gone. It allows for freedom from ALL estate taxes. It also provides a number of additional benefits including tax-free build-up of cash value, tax-free receipt of the death benefit, and access to a wide-range of global investments.
And as always, you can check our website for more information on any of these items. Visit Home to learn more.
In Wealth & Prosperity,
ERIKA NOLAN, Executive Director
P.S. I stumbled across this Confucius quote the other day and wanted to share it with you: "The superior man, when resting in safety, does not forget that danger may come." This ancient dose of wisdom represents the true mission behind our Permanent Wealth Protection Summits. Whether life's circumstances are your friend or foe, proper planning is necessary to preserve your wealth and ensure its safety.
I'd like to take this moment to invite you (and one guest) to join us for the only Permanent Wealth Protection Summit we'll hold in 2007. It's taking place February 28th through March 4th in the secluded luxury of The Four Seasons at Whistler, British Columbia. Make no mistake - this is not a conference. Our Permanent Wealth Protection Summits allow you to meet privately - with one or all - of our hand-selected group of global wealth advisors to tailor your individual asset protection plan. After several meetings with our wealth experts over 4 days you will walk away with your plan in hand.
Only 12 attendees (and their guest) can make the journey. Of those spots, only 8 remain. If you're ready to accept this invitation, I urge you seize the moment and call David Newman today at 1-866-765-7506. And by all means, click here if you would like more information first.
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A Radical New Approach to Asset Protection & Privacy
In 2004, more than nine million Americans had their identity stolen and approximately 1.8 million were sued. And laws like the USA PATRIOT Act greatly expand warrantless searches and permit government property seizures without proof of wrongdoing.
Big Business and Big Brother want to keep you and your wealth in plain sight, to be profitably tracked and conveniently seized. However, you can still legally create international 'lifeboats' of wealth and privacy that are practically invulnerable to snooping or confiscation.
Click below to learn more.
LINK: https://www.sovereignsociety.com/catalog/
product_info.php?products_id=42
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Brit Billionaires Nearly Tax Free We are strong advocates of global tax competition for a simple reason: Countries with low or no taxes on foreigners (tax havens), force high tax nations to keep their rates lower.
At the very least, tax havens allow citizens of high tax nations, such as the U.K., a way out. Unlike Americans, Brits can arrange their affairs so as to live offshore and legally avoid many U.K. taxes. Americans have no such luxury. No matter where in the world a Yank lives, the IRS and the law demands that they pay annual income taxes, regardless of where that income is earned.
Now comes The Times of London to prove our point. A major accounting firm, Grant Thornton, has calculated tax avoidance by the super-rich and concluded that Britain's 54 billionaires pay tax on only a tiny fraction of their wealth. The U.K. billionaires paid income tax totaling just under £15 million (US$29.3 million) on their £126 billion (US$247 billion) combined fortunes. And only a mere handful pay capital gains tax.
At least 42 of the 54 billionaires use U.K. overseas tax havens such as the Channel Islands, the Turk and Caicos Islands in the West Indies, and some use reliable Switzerland.
So it turns out that the U.K. is not just a tax haven for foreigners living there who pay little or no taxes. It's a tax haven for its own billionaires, if they use the law and accountants.
Meanwhile in Ireland...
Even though Ireland has the lowest corporate taxes in Europe, its income taxes are not so easy. Naturally, Irish citizens and their accountants, look for ways to cut taxes legally. Once they find that loophole, the Revenue Commissioners do their best to plug it. Thus the Irish government has moved to close off a loophole that enabled wealthy individuals to use some types of offshore funds to cut millions off their tax bills on income earned from foreign property holdings. Investors in offshore funds are liable for a 23% tax in Ireland, which is payable when they exit the investment fund. The tax collectors claim this loophole was intended for large groups, not for small partnerships, which are now widely in use to cut the tax. So the Irish authorities are restricting these tax benefits only to funds organized as companies, not partnerships.
Which will, no doubt, drive even more Irish investors way offshore.
BOB BAUMAN, Editor
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The Next Frontier in Emerging Markets
Unless you're an institutional investor, there's still no avenue available to play frontier emerging markets. And that's probably a good thing because these markets are all trading at or near all-time highs. Many of them are being flooded with cash. That's a sign that a full-blown mania has arrived, similar to 1993 before the bubble burst for emerging markets.
Frontier emerging markets is the codeword for first-stage investing in this highly volatile asset class. The truth is, many financial markets still considered "emerging" have actually gone mainstream, with investment vehicles readily available that track the most popular and liquid bourses, including Russia, Brazil, Mexico, Taiwan and China, to name only the largest markets.
But in its truest sense, an emerging market is a country whose economic infrastructure is still embryonic, accompanied by rapid growth and generally, a poor population living barely above subsistence levels. So I don't think it's accurate to peg Russia or Brazil as "emerging markets." They "emerged" a long time ago with bustling economic growth, booming trade surpluses, strong currencies, and a growing middle class. But you could peg Vietnam, Bangladesh, and Bulgaria emerging markets or "Frontier emerging markets."
In the United States, several Frontier emerging market funds that invest in the S&P/IFC Frontier Index have surfaced since earlier last year. But these require high investment minimums.
The largest frontier emerging markets are Slovenia (12.6%), Romania (11.2%) and Trinidad & Tobago (9.8%), hardly mainstream markets. But over the last five years, these bourses and many other obscure markets have skyrocketed amid the bull market in this asset class. And even Vietnam, where I'm heading next month to research investment ideas, has more than doubled over the last 12 months. Vietnam, by the way, joined the index in December and is now worth 9.4% of the composite.
I have no doubt that markets like Vietnam, Slovenia, Ukraine, and even Romania will emerge as great investments over the longer term. Many of these Frontier markets include African countries, whose fortunes have changed markedly since 2000 as commodities have zoomed.
Offshore, however, a few frontier emerging market funds have appeared, available to the retail investor. I'm waiting for this asset class to crack, or at least suffer a major correction, to provide a better entry point. At that time, I'll be recommending my first Frontier emerging markets fund in my investment-trading service, Global Mutual Fund Investor (GMFI ). Click here to learn more about my service - now in its 15th year.
ERIC ROSEMAN, Investment Director
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A Case of the Blind Leading the Blind...Literally
I use the Internet almost daily, if only to post comments on my blog. But I would never presume that websites have a legal obligation to make it possible for me to access them, should I not be able to use them in the normal, "point and click" manner.
Well, that's exactly what advocates for the blind expect from companies that maintain websites. And they're going to court to enforce their demands.
The first company in their sights is retailer Target Corp. The National Federation for the Blind (NFB) has sued Target in federal court. They're alleging that the difficulty blind people have in using Target's website violates the Americans with Disabilities Act (ADA).
Incredibly, the Bush administration, the same one that promised "smaller government," is backing the NFB in this case. This is despite the fact that the ADA was enacted before the World Wide Web existed, back when the concept of a "publicly accessible website" was mere science fiction.
From its inception, the ADA has been a litigation magnet. Some of the most outrageous results of this misguided law have been to insure that belligerent workers are protected from job discrimination and that disabled individuals seeking to participate in professional sports are provided sufficient accommodation in order to do so. Now, if the NFB has its way, Target and anyone else with a website will have to make it accessible to blind people. (Perhaps I'll have to create a "talking blog.")
A better and more realistic way of dealing with disability is to recognize that disabled people, including the blind, represent a large market. If Target wants to provide blind people easy access, it can voluntarily upgrade its website (at an estimated cost of US$1 million). This investment may or may not pay off, but it would be a voluntary one, not made under the threat of litigation.
Bringing a lawsuit against Target in this situation is truly a case of "the blind leading the blind." And until Congress has the courage to rein in the ADA, outrageous lawsuits like this one will continue.
MARK NESTMANN, Privacy Expert & President of
The Nestmann Group
www.nestmann.com
P.S. Check out my blog today at http://nestmannblog.sovereignsociety.com/ ... But I'll warn you: you'll still have to use the old "point and click" method to read it.
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Defer Taxes. Invest in Forbidden Markets.
Protect Yourself From Losing Everything in Court.
And pay a fraction of what you'd expect to pay for these benefits...
- Gaining access to top-performing investments that are unknown to most investors
- Protecting yourself from the devaluation of the dollar...even doubling your purchasing power as the greenback crumbles
- Locking your wealth out of reach of unscrupulous lawyers
Click below to learn more:
LINK: https://www.sovereignsociety.com/catalog/
product_info.php?products_id=42
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