Know that at its core, asset protection isn’t anything more than risk administration. It is like buying an insurance policy; and usually much more protective and cost-effective. If you’re doing business today, then you understand how hard it is to earn a profit. Thus, erecting a fortress that both protects the fruits of your labor and saves you money is likely a wise maneuver.
If you operate more than one business, you don’t want claims arising from one business to jeopardize the others. As such, you might want to think about an individual entity for each business. This approach puts each business into its own individual cubby hole. That way, a lawsuit against one enterprise won’t topple your entire construction. In addition, you maximize the strength of your asset protection strategy when you do so overseas. So, what are your options for offshore asset protection?
Offshore asset protection planning has become the subject of controversies the past few years. The very best asset protection plan is to make an irrevocable trust having a special power of appointment. This is because the law doesn’t consider trust assets as property of the Settlor. Keep in mind, when you buy the trust, you’re not just purchasing a trust. In addition, you are purchasing the experience of the individual writing the trust.
In order to protect you, a professional must draft it properly based on both statute and actual case law experience. So, this is not a do it yourselfer. Get help. After all, this is your money. There are many forms of trusts. Each type has distinctive purposes or goals.
Possessing an offshore trust just may be your best option in regard to safeguarding your assets.
As with other asset protection techniques, it is best to put the trust to work before a lawsuit strike. That way, it is able to best safeguard you. Yes, you can use it as a post-lawsuit fortress. But pre-planning is ideal. An offshore trust, for this purpose, is drafted as an asset protection trust. That is, the end purpose is to guard your assets.
Basically, there is one catch with these types of offshore investment accounts. That is to make sure to follow United States “tax haven” laws. These laws include making sure to do things like:
- Reporting any asset transfers into a foreign trust to the IRS.
- Distributions from an offshore trust that are received by an American can possibly be taxed to that individual.
- All undistributed earnings may be taxed as income.
- Account for any accumulated earnings in an offshore trust that may have been generated in prior years. Otherwise, a distribution may cause the American to pay income taxes on those years. This is just as if it were income earned in previous years. If the income was not reported previously, you may be required to pay both penalties and interest. The bottom line is that offshore earnings are tax neutral. You do not pay more or less in taxes if you hold your funds offshore or onshore.
- The IRS will ask you (or your CPA) to file a simple tax form. The form clarifies the value of the assets inside of the trust. In addition, you will name the actual beneficiaries of the trust. If you fail to file this report you may earn a fine, of among other things, a $10,000 late fee. If you fail to file the report altogether, it can get even more onerous. So, be sure to have your accountant complete and file the simple forms on time.
With regards to bank safety, keep in mind that there are international financial standards that banks must meet. That is, before a bank can accept depositors from abroad it must pass certain financial stress tests. For example, before a bank in Belize, Nevis, Cook Islands, Switzerland or the Cayman Islands can transmit wire transfers in US dollars, it generally needs to obtain a US correspondent bank. Obtaining a correspondent banking relationship carries certain requirements. For example, it must prove to the US institution that its financial strength ratios comply with strict international standards. Moreover, it must continuously pass these tests in order to maintain the relationship.
Additionally, there are rigorous government regulations within each of these jurisdictions. One hard and fast requirement is that banks must maintain substantial capital reserves in order to ensure depositor safety. Moreover, regulators continuously audit the banks. This helps ensure that the banks remain in compliance and to uphold the reputations of these popular financial centers. There are restrictions on the number, amount and security required for bank loans and investments. There are quarterly reporting requirements. Plus, bank officials must pass intensive background checks before they can obtain a directorship with the institution.
Banking Offshore
Over 2.7 million US citizens reportedly have offshore accounts. Offshore banking is not just for the top 1%. Banking offshore is available to anyone and everyone wanting to take advantage of the various benefits. Many foreign banks offer low deposit minimums. Thus, they make for a plausible option to anyone with a desire to set up an account offshore.
Moreover, the benefits of having an offshore bank account go way beyond alternative investment opportunities and hiding your assets. These benefits affect the average person and can greatly improve your daily banking experience. In terms of security, accessibility, convenience, and peace of mind, it would seem that offshore banking is the ideal solution. Gone are the days of thinking of foreign banking as some distant, idealistic tax evasion scheme to hide from your domestic government. On the contrary, it is legal, moral and ethical when done properly. Moreover, it is a real, viable, and sustainable option available to all willing to take advantage of it.
- Limiting the definition of common area costs.
- Excluding certain costs from the definition of common area costs.
- Limiting the landlord’s ability to exclude specific portions of the shopping mall.
- Requesting a maximum cap amount.
- The cap will usually prevent the tenant’s portion of common area expenses from substantially increasing by more than a predetermined percentage over the life of the lease. The cap amount is usually a fixed percentage, but it may also be based on an index, such as the consumer price index.
Savvy landlords will attempt to exclude all items from the cap that are out of their control, including:
- Utilities.
- Insurance.
- Taxes.
Landlords my also try to ensure that the cap is cumulative. Meaning, all prior unapplied carryovers may be applied in future years. It is recommended that tenants require that the cap be calculated based on a noncumulative basis.
A contract for deed in Texas is a contract between a seller and a purchaser whereby the owner of property or land retains the title or deed until the purchaser finishes making the installments of the agreed upon purchase price.
What Is a Contract for Deed in Texas?
There are several alternative names for a contract for deed. They include:
- Land purchase agreement.
- Simple land contract purchase agreement.
- Land sale contract.
- Land contract.
A land contract or contract for deed is a real estate contract purchase whereby the seller retains the title or deed of the property until the purchaser can finish making installments of the agreed upon asking price. Signing a contract for deed is not the same as taking on a mortgage. Rather, a contract for deed can be used as a financing tool when a Texas homeowner wants to sell land or property.
A contract for deed may represent a simple transaction between two parties, however significant risk can be involved. It is important to understand the process of a contract for deed agreement. First, a buyer and seller must agree upon the terms of the contract and the sale price. The negotiated terms will vary with each individual contract. However, a contract for deed will typically require set monthly payments and a down payment to be made.
Additionally, the contract usually stipulates that the buyer must make payments to the seller without taking on a mortgage. During the negotiations, the seller should present the warranty deed to the buyer to verify that they own the title and property. Seller financing or owner financing is a process used when a buyer cannot gain financing through more traditional methods. Instead, the buyer must make direct monthly payments to the property owner.
When Should You Use a Contract for Deed?
If a property seller is managing the financing for the real estate purchase, using a contract for deed is recommended. This means that the purchaser will be making monthly installments in order to pay back the loan. There are several instances when a contract for deed is normally used. They include:
- When a buyer has a poor credit rating and is unable to get financing from a professional lender.
- When a buyer has a sporadic employment history.
- When a buyer has a high personal debt to income ratio.
- When a buyer has changed his/her employment situation.
- When a buyer has insufficient funds for a down payment or to use as collateral.
How Do I Determine Payments?
In a contract for deed, part of the monthly installment will go toward paying the interest owed, and part will go toward paying the principal. This is similar to a typical mortgage process. It is recommended to contact local mortgage brokers or financial institutions to learn what interest rates lenders are currently charging. This will help calculate a fair interest rate and determine the appropriate payments.
What Is a Purchase Default on a Land Contract?
Generally, purchase defaults will include the following conditions:
- When the purchaser is late on a payment, there will be a notice period to rectify the default. During this time, a late fee will be added with the amount already predetermined in the contract agreement.
- In the event that a purchaser does not remedy the default, only a limited time will be allowed to pay off the remaining balance. Additionally, the individual will need to vacate the property. The agreed upon timeframe will have already been established in the land contract.
- If the purchaser is able to rectify the defaults that have occurred, then the contract can be reinstated if the seller agrees. However, the right is at the seller’s discretion. Due to this stipulation, it is critical that both parties agree to reasonable repayment terms to decrease the chance that the purchaser will default.
Property Titles in Texas
In the state of Texas, one of the biggest differences between purchasing real estate with a contract for deed versus using a traditional mortgage is the time frame needed for the property title to transfer. When working with a traditional mortgage loan, the purchaser will typically obtain the property title at the closing.
The mortgage company will hold a property lien, and the purchaser will hold the title to the property until the purchaser pays off the mortgage. However, in Texas, a contract for deed will impede the property title transfer. To clarify, only after the buyer completes the terms of the contract will the title transfer for the contract for deed.
Over 2.7 million US citizens reportedly have offshore accounts. Offshore banking is not just for the top 1%. Banking offshore is available to anyone and everyone wanting to take advantage of the various benefits. Many foreign banks offer low deposit minimums. Thus, they make for a plausible option to anyone with a desire to set up an account offshore.
Moreover, the benefits of having an offshore bank account go way beyond alternative investment opportunities and hiding your assets. These benefits affect the average person and can greatly improve your daily banking experience. In terms of security, accessibility, convenience, and peace of mind, it would seem that offshore banking is the ideal solution. Gone are the days of thinking of foreign banking as some distant, idealistic tax evasion scheme to hide from your domestic government. On the contrary, it is legal, moral and ethical when done properly. Moreover, it is a real, viable, and sustainable option available to all willing to take advantage of it.
A more secure banking experience. The federal reserve system that backs U.S. banks is, in turn, backed by the most debt-ridden country on the planet. Moreover, top finance publications have released lists of the safest banks worldwide; none of which were national U.S. banks.
According to Global Finance, here are the countries with the safest banks:
- Germany
- Switzerland
- Netherlands
- Norway
- Luxembourg
- France
- Canada
- Singapore
- Sweden
Of the above countries, only Switzerland and Luxembourg will open accounts without the need to travel to the country. The minimum deposits are substantial. The banker will eventually come to visit you in person.
Internationally, however, it is easy to find banks in low debt countries that don’t (and won’t) gamble with your money. Consequently, they are able to keep more cash on hand for your withdrawals. When you put it in terms of investing, where would you would want park your money? In a company swimming in cash? Or one drowning in debt? Countries such as Switzerland and Luxembourg have strict central banking regulations. They implement “checks and balances” on all bank accounting practices. Many other offshore banks and countries have similar systems. These systems help to ensure people who are looking to bank offshore can do so safely and soundly.
It is very important to know every detail of Offshore Banking, that is why in TCB Malibu we have the best financial experts and lawyers that can guide you and solve all your doubts.
