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5 Ironclad Asset Protection Strategies

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5 Ironclad Asset Protection StrategiesIf you’re interested in a “divorce” from the United States, you’re not alone.

Whether it’s the long-term loss in value of the US dollar, all-pervasive surveillance, or the militarization of everyday life, the United States clearly is moving in the wrong direction.

Fortunately, there’s no need to be a victim. There are ways to avoid the most dangerous threats to our freedom. Especially:

Political risk: It’s become socially acceptable to “eat the rich” – and not just the gilded robber barons. Anyone with any assets who isn’t wholly dependent on the government for survival is a target. The government’s enemy isn’t just terrorists – it’s people who refuse to be slaves to a bankrupt, crumbling, past-its-prime government.

Identity thieves and other crooks: Imagine having creditors hounding you to pay debts you never incurred – foreclosing on your legitimate property, hauling you into court, or even asking police to take you into custody. You can’t buy a house, rent a car, or open a bank account, all because “the computer” shows that you’re a deadbeat. You know it’s not true, but convincing anyone else that the computer is wrong can be almost impossible. This nightmare is called identity theft. And it costs Americans tens of billions of dollars each year. In 2014 alone, an estimated 17.6 million Americans experienced some type of identity theft.

Protection from “Civil Forfeiture”: Did you know that withdrawing cash from your own bank account or owning a dog can be grounds for the government to swoop in and take your property without due process? In a “civil forfeiture,” your property – not you – is supposedly guilty of a crime. There’s no conviction necessary. Nor any arrest. There doesn’t even need to be a suspicion you committed a crime, because, in these cases, your property is the defendant! As unbelievable as that sounds, it’s 100% true… And it’s increasing.

Helping people protect themselves from such threats has been my focus for nearly 30 years – more than 15,000 customers and clients.

I show them how to preserve freedom in a highly uncertain country that is, quite frankly, hostile to anyone with any assets at all – whether $20,000 or $20 million.

That’s what this report is all about. Developed especially for the Financial Sense readership, it aims to be an honest, no-holds-barred review of where we are, where we’re headed, and most importantly, what we can do to protect ourselves and our wealth from the rising tide.

Sincerely,Mark NestmannPresident, The Nestmann Groupwww.nestmann.com

http://www.nestmann.com




When you’ve been in the game as long as I have and you’ve seen all the ways people can get ripped off by shady, illegal, and gray-area schemes and scams, you tend to be naturally very cautious about giving advice.

Actions do have consequences, and the wrong sort of “asset protection” can lead to prosecution, fines, or maybe even prison.

It’s a problem that I’ve seen the new generation of so-called offshore gurus mostly or completely ignore. As one famous author in the industry told me recently after I challenged him on the poor reputation of a referral in South America (he was getting a kickback):

“I don’t care. I’ll take as much as I can get as long as I can get it.”

Or consider the company that has been all over the speaker circuit talking about a Paraguayan passport in 30 days for just $45,000 (the cheapest legal economic citizenship program is about $100,000 – about $130,000 including all legal and application fees).

To my knowledge and that of my contacts well placed in that country’s establishment, there is no legal way to do that. However, there are bribes that can be paid to a notoriously corrupt bureaucracy and Supreme Court that must approve such applications.

And, for better or worse, bribing officials overseas is a crime in the US under the Foreign Corrupt Practices Act. US citizens and permanent residents – or their agents (e.g., a 2nd passport service company) – break this law if they give, or even offer, “anything of value” to a foreign government official in exchange for “influence to assist in obtaining or retaining business or securing an improper advantage.” Certainly, bribing South American officials in exchange for a passport would seem to be “securing an improper advantage.”

If history is any guide, in the best case, a reformer will eventually clean house in the country and expose the corruption, leading to the suspension of citizenship for all these new Paraguayan passport holders. In that case, they’d just lose their money and time put in.

Or, they might really have to pay for trusting the passport pitchman. The US government could say enough is enough and charge the promoter and all his clients with a violation of the Foreign Corrupt Practices Act… heavy fines and quite possibly prison time… all for following the wrong advice.

Bad Advice Has Consequences

Here’s a true story from my files about someone who followed the wrong advice and lost big time:



This particular individual contacted me several years ago after acquiring an “instant passport” from a Central American country. He was told by the promoter that this document gave him citizenship in that country – only it didn’t. Based on the promoter’s lies, the victim then went to a US consulate and gave up his US citizenship. This action rendered him a “stateless person” – a citizen of nowhere.The victim started traveling around the world on his passport, which admittedly looks identical to the passport issued to legitimate citizens. After three years, though, he had to renew the passport. Only then did the promoter tell him that he had to produce a passport from another country in order to renew the one this Central American country had issued. He suddenly came to the realization that he was officially a stateless person.

It gets worse. During this three year period, the victim applied for visas from numerous countries, including the United States. In the case of the application for a US visa, he swore under oath that he was a citizen of the Central American country that issued his passport. Only problem is… he wasn’t. He now faces the possibility of criminal prosecution in the United States, and possibly other countries – all because he believed the lies of an unethical promoter.

In fact, I could fill these pages with many such stories – both from people I’ve read about and from clients that came to me to fix their problem after taking a little too much snake oil.

But I get it: A good sales pitch with impressive promoted benefits. We all want to save taxes, make ourselves less of a target to sue-happy lawyers, and generally enjoy more freedom to live as we want without Big Brother looking over our shoulder at every turn.

But there’s a right way and a wrong way to do it. And while the wrong way might sound good at the time, the people who take that path will eventually learn the real meaning of the old saying, “The chickens come home to roost.”

The right ways – while admittedly less “sexy” – do exactly what they are supposed to do: protect you – without exposure to additional risks that, ironically, can be worse than the problem it was supposed to fix.

This report will show you 5 right ways; 5 PROVEN asset protection strategies that I’ve used for nearly three decades in practice.

Two final notes before we get into it:

First: I’ve often been accused of not being “with it,” because I tend not to promote the “hot” flavor of the month – whether it be Paraguayan passports or Singapore bank accounts. I’m fine with that. I’m not for the shiny-object people.

I stick with what works, and while, thanks to government regulation, the definition of what that is seems to change with each passing month, the people who have something to protect appreciate



my naturally cautious nature – especially when it comes to matters of money or, in some cases, their personal freedom.

Second: I’ve often been accused of being “too scary” for the average person, because I tell the documented truth about what’s going on in this country.

My original occupation was as an investigative journalist (my journalism work is what got me started helping people in this business) and strong habits die hard. Even now, I maintain a database of more than 100,000 pages (and growing) of news stories going back to the late 80s that chronicle our slide into an ever increasing police state.

But, that said, while the facts presented in this report may be shocking and disturbing, they are not meant to scare you. They are simply the facts, and I firmly believe that with the right facts, we can make the best decisions.

Ironclad Asset Protection Strategy #1:

Make your assets invisible by using privacy-oriented domestic LLCs

It might sound odd from someone known for recommending offshore solutions, but there are actually quite useful domestic protection laws worth considering.

Most of them exist at the state level and vary considerably as to what assets are protected and under what conditions. (In contrast, the wealth preservation laws of offshore jurisdictions usually apply throughout the entire country, without variation.)

Still, especially if you live in a state with strong asset protection laws, they may provide an important first line of defense.

One of the very best options to explore is privacy-oriented domestic LLCs. The basic idea is this: They can’t come after what they don’t know you have. These types of LLCs mask your identity, and, at least in one case, make it possible for you to own an asset (like a bank or securities account, for instance) 100% anonymously. Plus, if someone does happen to discover your connection to the LLC, the laws of some states make it virtually impossible for that person to seize the assets in it.

Here’s an example to give you an idea of how this works:

Let’s say that like many Americans, you have a couple domestic bank accounts and maybe two or three securities accounts. You probably hold all of them in your own name. That’s a big mistake. Not only can



investigators find these accounts easily if you’re sued and lose, a creditor can simply foreclose against these accounts, up to the full amount of the judgment. In essence, you could lose everything.

Believe me, I’ve seen this happen time and again in my career.

What’s the solution? It’s surprisingly simple. Just set up a domestic LLC in a state that strictly enforces a legal concept called the “charging order.” Retitle your bank accounts and securities accounts in the name of that LLC, rather than your own name.

This accomplishes two things. First, the assets are no longer in your name, making it much more difficult for anyone to find them. Second, if you choose the right state in which to form the LLC, thanks to the charging order concept, the creditor can’t seize or foreclose against the assets in the LLC until you pull money from it. As well, in a few states, the creditor can’t force you to do so until you’re good and ready.

As a result, it’s much more likely that your creditor will settle whatever claim he has for pennies on the dollar.

A simple solution like this gives you back the power.

There are a couple caveats, though, to keep in mind. First, if you get sued in the state where you live, the courts in that state may not enforce another state’s LLC law. Second, if your LLC has only one owner, it won’t be as resistant to creditor attack as one with more than one owner in many situations. But even with these potential drawbacks, this is a great strategy for getting assets out of your name.


Move Your Assets Offshore

Mitt Romney, Google, and hundreds of thousands of other high net-worth individuals and businesses get it: Substantial benefits exist for investing and doing business internationally.

Access to investment and business opportunities not easily available here. While the United States has the world’s largest markets, more than half of the world’s stock investment opportunities (by capitalization) are in other countries.

In many cases, you can’t purchase these securities through a US broker. True, you can purchase some of the biggest ones through “American Depository Receipts” (ADRs) on domestic stock exchanges, as well as over the counter (OTC). Unfortunately, ADRs and OTC shares are often less liquid than shares traded on local exchanges.



As well, securities of most other foreign companies – especially smaller ones – are available only on the local market. The only way you can gain access to them easily is through a non-US bank or brokerage account.

Protection from the falling US dollar. International investments expose your portfolio to foreign currencies. This is important because in recent decades, the US dollar has fallen dramatically in value. For instance, in 1970, a US dollar purchased approximately 4.5 Swiss francs. Today, the dollar and the franc trade roughly at parity, representing the dollar’s loss in value against the franc at more than 75%.

Reduced portfolio risk. Globally diversified investment portfolios carry much less long-term risk than those concentrated in only one market. A 2012 study by the Federal Reserve Bank of Dallas demonstrates that over the past few decades, a portfolio with 20% non-US stocks would have experienced both higher returns and lower volatility than a portfolio consisting of US stocks alone.

Protection from professional liability and other claims. The prudent use of foreign structures, contracts, and relationships enhances your ability to protect your wealth from domestic legal threats, including judgments, civil forfeiture, business failure, divorce, currency controls, repressive legislation, and political instability.

More lawsuits are filed in the United States than in any other country. Legal concepts like “joint and several liability” and the ability of attorneys to accept cases on a contingency basis have led to an explosion in frivolous litigation.

In contrast, the legal systems of most other countries discourage such litigation. Outside the US, the loser must generally pay the winner’s legal bills, courts can’t award punitive damages in civil disputes, and lawyers may not accept contingency fees. Someone suing you in a foreign country may even be forced to post a bond to cover your expenses should you win in court.

It’s also much more difficult for a US creditor to collect against international assets than when they are held domestically. No country automatically enforces US civil judgments, and many countries don’t enforce them at all.

Increased privacy. International investments offer immense practical privacy advantages. Since your money is outside the United States, it becomes virtually invisible to domestic information brokers and private investigators. It completely avoids the sophisticated US asset-tracking network, which permits investigators to identify easily your US assets.

If someone wants to sue you and performs a domestic asset search to see if you have anything worth taking, your international assets won’t show up. “No recoverable assets” usually means “no lawsuit,” particularly if the lawyer handling the case is only paid on a portion of what’s recovered.



Essentially, once you’ve opened an international account, your assets are invisible to all but the most determined investigators in the United States.

(Note: In most cases, you will need to report details of your foreign investments to the US government.)

Lastly, unlike the United States, most other countries restrict bank or securities account managers from giving up data about you except under narrowly defined circumstances. The wholesale data sharing between banks, information brokers, and the government that’s commonplace in the United States is banned in other countries under court decisions, international agreements, or national laws guaranteeing bank secrecy, Switzerland is a perfect example. Even countries without formal bank secrecy laws generally respect financial privacy to a far greater degree than here.

Investment continuity. The attacks of Sept. 11, 2001 showed the vulnerability of the US financial infrastructure. Domestic securities markets remained closed for four days after the attack, which meant that during that time, investors with only US bank or brokerage accounts could not trade. But US investors with foreign accounts could trade foreign securities on foreign exchanges.

Even this brief disruption of the US securities markets led to a widespread, albeit short-lived, investor panic. But there’s no assurance that a future attack on the US financial infrastructure wouldn’t lead to a longer “trading break.”

For that reason, it’s a good idea for US investors to maintain “nest egg” positions in politically neutral international havens that are unlikely terrorist targets.

Tax Advantages of Moving Your Assets Offshore

So what about the tax advantages of international investing? They can be immense, but do require proper planning. Apple, for instance, uses sophisticated international tax planning strategies that send income to low-tax jurisdictions and expenses to higher-tax countries. As a result, Apple pays an effective tax rate of less than 10% on its worldwide income.

If you have a bona-fide international business, you can legally defer tax on its income, just like Apple does. You do it by setting up the business so that it generates real business income, is managed outside the United States, and is held in an appropriate foreign entity (or entities).

Sounds complicated and, to a certain degree, it is. It’s also a perfectly legal strategy – although admittedly with many possible tax “landmines” to avoid. Proper planning is essential!

The key takeaway here is: You don’t need hundreds of thousands or millions of dollars in the bank to benefit from going offshore. Just as there are many countries, there are many kinds of setups to suit your current asset base and goals for the future.




Get Legal Residence in a Country You Wouldn’t Mind Living In

While the first two Ironclad Asset Protection Strategies are important to virtually anyone who wants to protect their wealth – no matter what amount – step three involves heading off the beaten path a bit.

But, if we’re going to look at maximum protection, we need to look at ALL the solutions, and, once you’ve moved your stuff offshore, it’s time to look at how to protect yourself so they can’t force you to give up your assets. That potentially means moving yourself (and your family) offshore too.

Even if you don’t plan to leave the United States anytime soon, finding a “just in case” country is a prudent safeguard. If economic or political conditions completely fall apart and you want to leave, having legal residence in a suitable offshore jurisdiction provides a valuable “insurance policy.”

The question then becomes, what sort of residence?

If you merely want the right to live in another country but don’t necessary want to be physically resident there, a number of countries can accommodate your needs. Residence from countries like these is especially valuable if personal, family, or professional circumstances won’t let you leave the United States for an extended or permanent stay abroad.

In most cases, you can qualify for residence (although not the right to work in the country) by either making an investment or demonstrating a minimum guaranteed pension payment. Residence rights may be purchased in some countries (like Panama, for example) by making an investment of $80,000 or more in real estate or other assets. A guaranteed pension payment of $1,000 or more may also qualify you for residence. In other countries, you may need to qualify on a points system (Canada and Australia are two such places). Some countries have multiple programs to consider.

In most cases, if you qualify for legal residence in another country, your spouse and children will qualify as well. Every country has its own requirements – be sure to check! The best source for information will usually be official government web sites – not promoters.

What should you look for to choose a suitable second residence? The most important factor is whether you (and your family if applicable) enjoy spending time there. But there are numerous other considerations:

Ability to work or start a successful business. Most countries don’t make it easy for new residents to work for a local employer. Often you’ll need to get a separate work permit for that. Some classifications of residence, such as the pensionado schemes in many Spanish-speaking countries, don’t allow you to work at all.



There is one major exception to this rule. Native English speakers are in high demand worldwide. If you can speak and read English fluently, you can probably get a job teaching English, probably in several, if not dozens of different countries.

However, even if you don’t work in the local economy, you can often run your own small business at home. An Internet-based business is ideal, because you can book sales outside the country, potentially reducing your tax liability. Generally, you won’t need a business license.

Physical Freedom vs. Security. You also need to give some thought to how much physical freedom you want – or security you need. Is it likely you’ll be robbed? Can you depend on the police when needed?

In some respects, of course, the less efficient the police are, the better off you’ll be. And, it’s certainly true that electronic surveillance and the omnipresent nanny state are much less pervasive in less developed countries as well.

But, if you can simply bribe your way out of a problem, so can anyone else. And since you’re the gringo, if you’re caught up in a spat with a local, you’re the one who will probably be punished.

You’ll likely find much less emphasis on prosecuting petty and victimless crimes outside the United States, especially in less developed countries. Those crimes take place, of course, but police don’t have resources to pursue the perpetrators.

If you’re the victim of a crime, you may find that police don’t seem interested in investigating it. The attitude that “you’re a gringo, you can afford the loss” is common.

Property rights. Enforcement of property rights is not only especially important in real estate transactions, but also to bank accounts, trust accounts, and even to your personal property. For instance, in many countries, “squatters” can occupy unoccupied real estate and eventually claim it for themselves. You should also find out what rights squatters have if you don’t occupy property you buy. Obviously, this is less of a threat if you buy a high-rise condo than if you purchase agricultural property in a remote area.

Real estate contracts or other agreements in English hold no legal weight in non-English speaking countries – the contract may be entirely invalid. Make sure that any contracts you sign are in the local language and signed and witnessed in whatever way the law prescribes to make sure they’re legally enforceable. Yes, you will need a lawyer to know what you’re buying and what form of ownership you will have.

Right to privacy? Most countries require foreigners to register with police if they spend more than a few days there. For instance, when I lived in Austria, I had to file a document with police within three days of my arrival. I also had to provide a letter from my landlord attesting to the fact that I was living in the apartment listed on the application. Unless you follow whatever procedure the law requires in your newly adopted country, you probably won’t be able to get the basics such as utility services or a bank account.



Taxes. The most valuable second residence havens tax on what’s called a “territorial” basis: Residents pay only on their local income, but not on their foreign income. In some countries, you can be legally resident without being tax resident, though this usually requires that you spend no more than six months annually. Tax rates are often lower than in the United States, but in wealthier countries (e.g., much of Europe), it may be higher than the combined US federal and state tax burden. And, lest we forget, no matter where you live, US citizens must file US tax and information returns.

Availability of citizenship and passport. Finally, will your adopted country award you official nationality and a passport after you’ve lived there a certain number of years? Generally, you must legally be in the country and comply with its immigration rules continuously in order to apply for citizenship. Some countries interpret these rules very strictly; others are more lenient to the point of provoking scandals.

Keep in mind that some visa categories may be ineligible for eventual citizenship. For instance, the pensionado visas issued by some Spanish speaking countries generally don’t provide a path to citizenship.

Other than those few places with legally authorized economic citizenship programs, virtually no country will award citizenship and a passport if you’re not both legally and physically resident in that country. The period of legal residence required varies from two years to 10 years or more.


Get a Second Passport

If a backup residency was a strong insurance policy for whatever happens, a second passport is the ultimate in personal protective insurance.

The biggest benefit of this asset protection strategy is the freedom it gives you to travel internationally if your primary passport is lost or stolen or if the issuing government confiscates or refuses to renew it.

This is especially relevant for Americans in the United States, who can have their passports revoked if:

A federal or state court has ordered you not to leave the United States

Another country has requested your extradition

You owe more than $2,500 in delinquent child support payments

Doubts arise about the legitimacy of your birthplace or naturalization as a US citizen.

You have a “seriously delinquent tax debt” – defined as owing $50,000 or more in taxes, interests, and penalties to the IRS.



Even if none of these criteria apply, the list of reasons for the United States to confiscate or not renew your passport may increase in the years ahead. For instance,

In 2011, the State Department proposed a new “Biographical Questionnaire” that, if approved, you might have to complete to receive or renew your US passport. Among numerous other intrusive questions, the State Department wanted to know “if there were any religious or institutional record of your birth or event occurring around the time of birth (Example: baptism, circumcision, confirmation, or other religious ceremony).”

It’s apparent that the authorities see a passport and the ability to travel as a “gift” rather than the natural human right we all should have.

Of course, there are plenty of other benefits of a second citizenship and the passport that comes with it:

It gives you the right to reside in the country that issued the passport, and possibly other countries. For instance, a passport from a member of the European Union lets you live and work in any other E.U. country.

It provides you with the opportunity to travel to countries blacklisted by the government that issued your primary passport. For US citizens, this includes countries such as Cuba, North Korea, etc.

It avoids disclosing your primary nationality, should you ever need to keep that a secret. This can be useful if you’re ever confronted by militants who oppose the government that issued your primary passport.

For US citizens, it provides the option for possible expatriation. Without a second nationality and passport, giving up your US passport would render you a “stateless person.”

Different Ways to Get a Second Passport

You may qualify for a second citizenship and passport by ancestry, marriage, religion, or extended residence in another country. As well, a handful of countries offer “instant” citizenship in return for an investment or contribution. Until 2013, the Commonwealth of Dominica and the Federation of St. Kitts & Nevis were the only countries with an official, legally mandated, citizenship-through-investment program. Several other countries now offer similar programs: Antigua & Barbuda, Cyprus, Grenada, Malta, and St. Lucia. In all cases, applicants must pass a strict vetting process that includes a comprehensive criminal background check.

Commonwealth of Dominica. There are two options available to acquire economic citizenship and a passport. Under both options, the primary applicant must submit to an interview by government officials. Contribution option: The minimum contribution for



citizenship and a passport is $100,000. Larger contributions qualify your opposite-sex spouse and your children under 26 to citizenship and a passport. You make the contribution only after the government approves your application. Additional costs come to about $30,000, making the total expenditure for a Dominica passport a minimum of $130,000. Real estate option: Alternatively, you may purchase qualifying real estate in Dominica with a minimum value of $200,000. Additional costs come to a minimum of $90,000. Dominica passport holders can travel without a visa, or obtain a visa upon entry, to more than 110 countries and territories. This list includes Ireland, the United Kingdom, Singapore, Hong Kong, and all other EU countries.

Federation of St. Kitts & Nevis. There are two options available. Charitable contribution option: This option requires a payment of $250,000 or more to the “Sugar Industry Diversification Foundation” (SIDF), an entity set up to benefit displaced sugar workers in the Federation. Larger contributions qualify your opposite-sex spouse and your children under 26 to citizenship and a passport. Legal, due diligence, and processing fees add a minimum of $30,000 to the cost. Real estate option: To apply for citizenship under this option for yourself, your opposite-sex spouse, and your children under 26, you must invest a minimum of $400,000 in qualifying real estate in St. Kitts or Nevis. Legal, due diligence, processing, and naturalization fees, along with closing costs add a minimum of $100,000 to the cost. St. Kitts & Nevis passport holders can travel without a visa, or obtain a visa upon entry, to nearly 150 countries, including all 28 members of the European Union.

Republic of Cyprus. Several options are available to acquire citizenship through a qualifying investment. The least expensive option is to invest €2 million or more in real estate development projects, a Cyprus business, or an approved “Alternative Investment Organization.” You must also own a residence in Cyprus with a minimum value of €500,000. These investments qualify you and your opposite-sex spouse and your children under 18 to citizenship and a passport. Cyprus passport holders can travel without a visa, or obtain a visa upon entry, to nearly 150 countries. They also have the right to live and work in any EU country. Again, travel to the United States requires a visa.

Antigua & Barbuda. The options to acquire citizenship under the program are to donate US$200,000 or more to the “National Development Fund” (NDF), acquire $400,000 or more in qualifying real estate, or invest $1.5 million or more in an approved local business. Under all these options, the primary applicant may include their opposite-sex spouse, dependent children, and dependent parents over 65 years of age, without an additional contribution or investment. You are required to make the donation or investment only after your application is approved. A passport from Antigua & Barbuda offers similar travel options to one issued by Dominica or St. Kitts & Nevis.



Grenada. There are two ways to acquire Grenadian citizenship by investment. For the National Transformation Fund (NTF), applicants must contribute at least $200,000 to a fund to boost infrastructure and social development in Grenada. This fee qualifies the main applicant, the main applicant’s opposite-sex spouse, and up to two dependents for citizenship. Additional dependents may be added to an application for a fee of US$25,000 each. Alternatively, you may invest $350,000 or more in an approved real estate project. Again, this investment qualifies the main applicant, the main applicant’s opposite-sex spouse, and up to two dependents for citizenship. A passport from Grenada offers similar travel options to one issued by Antigua & Barbuda, Dominica or St. Kitts & Nevis.

St. Lucia. To obtain citizenship, applicants must have a net worth of US$3,000,000 and make a substantial investment in one of four areas: A non-refundable US$200,000 contribution to the National Economic Fund, a $300,000 real estate investment in high-end boutique properties and branded hotels, a $3.5 million investment in approved enterprise, or a $500,000 investment in government bonds. This investment qualifies the main applicant, the main applicant’s opposite-sex spouse, and an unlimited number of qualifying dependents for citizenship. A passport from St. Lucia offers similar travel options to one issued by Grenada, Antigua & Barbuda, Dominica or St. Kitts & Nevis.

Malta. To acquire citizenship in this country, you must make a contribution of €650,000 or more to the government, purchase a personal residence in Malta with a value of €350,000 or more or, alternatively, enter into a five-year lease agreement on a residence with an annual rental value of at least €16,000 annually, and purchase €150,000 in Maltese government bonds or other approved investment. You can also include your spouse and children below the age of 18 for an additional €25,000 each. Add €50,000 each for dependent parents aged 55 or over and unmarried children aged 18–25. A passport from Malta is, by any measure, one of the world’s best travel documents. With a visa-free travel network of approximately 170 countries, including the US and Canada, it can serve as an acceptable alternative to, say, a US passport. Since Malta is an EU member, a Maltese passport also gives you the right to live and work not only in Malta, but in any other EU member country, as well as the non-EU nations of Switzerland, Norway, Iceland, and Liechtenstein.

An Important Warning about Second Passports

Beyond the ones mentioned above, be very careful about other promoted “instant” passport programs. Bogus second citizenship offerings abound. In recent years, I’ve received offers to purchase passports from Costa Rica, the Dominican Republic, Ireland, Lithuania, Nicaragua, and Paraguay, among other countries. Some of these offers are outright scams. Others involve illegally purchased or stolen documents. Even if you succeed in obtaining a passport on this basis, it may be revoked at any time, and you could be subject to arrest and/or deportation.




Expatriation

The fifth and final Ironclad Asset Protection Strategy is also arguably the most drastic. But it is also the only true way to fully break free of any direct US influence over your life.

The Benefits

Once you give up US citizenship and passport, you have no further obligation to pay US tax on your worldwide income. You’re also free from the complicated reporting regime imposed on US persons with foreign investments. With clever planning, you might even be able to set up residence in a country that only taxes local income, and arrange to have all of your income originate outside that country – in essence you would pay no income tax. (We have numerous clients who have done exactly that!)

The Drawbacks

However, tax freedom comes at a cost, one the passport pitchmen generally don’t include in their sales presentation:

The Exit Tax. If you qualify as a “covered expatriate,” US law imposes an “exit tax” on unrealized gains that exceed $693,000 for any property you own, worldwide (2016 figures adjusted for inflation).

A covered expatriate is an expatriating US citizen or long-term permanent resident who has:

A net worth over $2 million; and/or

Paid more than an average of $161,000 annually in income tax for the five years prior to giving up US citizenship or permanent residence (2016 figures adjusted for inflation).; and/or

Failed to certify compliance with all US federal tax obligations for the five-year period preceding expatriation; and/or

Failed to complete IRS Form 8854, “Expatriation Information Statement,” following expatriation.

If you do fall into this category, there are additional tax consequences to consider:

Onerous taxes on most pensions and deferred compensation plans.

U.S. recipients of gifts and bequests over $14,000 annually (2016 figures, adjusted periodically for inflation) must pay estate tax on the gift at the then-prevailing highest rate.



You might not be able to come back. Another risk to consider is the possibility that once you leave, you might not be able to ever return, even to visit. While most former US citizens have no problem obtaining a visitor’s visa, or qualifying for visa-free entry, a “non-resident alien” (e.g., someone who’s expatriated) no longer has an automatic right to live in or even enter the United States. If you’re not willing to take this chance, however remote, then you shouldn’t expatriate.

This is more than a theoretical possibility, by the way. In 1996, Congress enacted the “Reed Amendment” to the Immigration and Nationality Act, which gives the US Attorney General the authority to deny re-entry into the United States to a former US citizen who renounced his citizenship for the purpose of avoiding taxation.

Nearly two decades after enactment, regulations under the amendment have never been issued, nor has its power ever officially been invoked. However, some U.S consulates do sometimes deny visa applications from wealthy former US citizens, citing “tax motivated expatriation” as justification for doing so.

Presumably to beef up the Reed Amendment, Senators Charles Schumer (D.-N.Y.) and Bob Casey (D.-Pa.) introduced legislation in 2012 to retroactively punish wealthy expatriates. The “Ex-PATRIOT Act” would punish covered expatriates by forbidding them from ever re-entering the United States. Covered expatriates would also face a 30% percent tax on future gains from US investments. Both the tax and re-entry provisions would be retroactive and encompass individuals who gave up US citizenship for the 10-year period prior to enactment of the statute.

The Ex-PATRIOT Act didn’t become law in 2012, but Schumer and Casey re- reintroduced it in 2013. Fortunately, it didn’t pass then, either, but there’s still a good chance that in the today’s political atmosphere, this could become a successful tactic to garner political support for other immigration reforms.

Think of it this way: If you were a politician in Washington, D.C. and wanted to get re-elected, would you dare to vote against it?

So, are you a good candidate for expatriation?

Well, if…

You are comfortable living outside the United States, or are already doing so

Your spouse and minor children are comfortable living outside the United States, or are already doing so; and

You have already or are capable of shifting the majority of your income and assets outside the United States.

You’re willing to take the chance, however remote, that you might be permanently excluded from ever returning to the United States.



… then yes, you may just be. Otherwise, it just might be better to implement all other Ironclad Asset Protection Strategies but this.

Next Steps

While admittedly, most people won’t (and probably shouldn’t) expatriate, the other four Ironclad Asset Protection Strategies by themselves will give you an awful lot of protection and piece of mind.

The fact is, the land of the free and home of the brave is being replaced with a police state that punishes anyone who isn’t dependent on them.

It’s a country full of losers who retain sue-happy lawyers to come after your hard earned money – without any cause beyond the desire to take it from you.

And, thanks to technology and very poor privacy laws, it’s a country that makes it very easy for thieves to steal your identity, ruin your credit history, steal your assets, and put you in the poorhouse.

I’m sorry if this is a bitter pill to swallow. I wish things were different, but they’re not. We have to face reality:

Now is a dangerous time to be a self-made man.

Unless we’re happy to remain a slave to the system – remaining wholly dependent on them to take care of us financially – we make ourselves a target.

If we truly desire freedom, we need to protect ourselves and our assets. To different degrees, that’s what the 5 Ironclad Asset Protection Strategies are built to do.

To Help You Take Action…

Consider joining our Offshore Freedom Inner Circle, our flagship service that gives you concierge level access to the nation’s top offshore experts.

Plus, you’ll also get in-depth Offshore Freedom Inner Circle Global Alerts, expert interviews, unlimited access to our offshore library, offshore research service, ask the expert service, as well as your very own private offshore email address.

Basically, you get everything you need to enjoy the benefits of going offshore without the risk.

Click here to learn more

http://www.nestmann.com/affiliate/?p=INTL&w=ironclad-il-ofic-102



DISCLAIMER: This message does not provide investment, tax, or legal advice, and nothing in this message, any document found at or received from Nestmann.com, or any communications from Mark Nestmann and/or The Nestmann Group should be taken as such. In addition, Mark Nestmann and The Nestmann Group do not represent any foreign government nor are agents of any foreign government. Before undertaking any action, be sure to discuss your options with a qualified advisor.

PLEASE NOTE: The information contained within this publication is based on the best research available as of the date of publication. However, the world changes fast and information can become out of date relatively quickly. So, two points… First, before undertaking any action described in this material, please conduct your own due diligence and verify all facts. Second, if you happen to spot an out of date fact or figure (or even suspect something is out of date or false), simply get in touch with us and we’ll look into it.

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