It’s True: Most Wealthy People Know How to Hide Money
- March 3, 2015
- 4 Comments
Most wealthy people, the powerful and the fabulous seem to have a knack about keeping their money in safe places. It is often said that most wealthy people know how to hide money, but the reality is that they do not usually hide money in the first place, since 9/11 and the Patriot Act, that is almost impossible anyways. The rich do not hide their assets; they protect them in such a way that they cannot easily lose them. To this effect, they use special legal instruments such as the a properly drafted, funded and managed family trust, which provides true asset protection.
How to Hide Money – In a Legal Manner
Prior to the 9/11 terrorist attacks, many wealthy individuals swore by offshore trusts located in the Caribbean and other jurisdictions where the laws related to corporate finance offered a certain level of secrecy and obfuscation that was considered to be nearly reprehensible by taxation and law enforcement officials in the United States. Public opinion about these offshore trusts was generally negative since it seemed as if the rich who used these instruments were up to no good.
Protecting Your Assets: How Most Wealthy People Go About It
There is a major difference between hiding money and protecting your assets. An eccentric rich man may choose to bury his cash deep underground and then choose to live the life of a pauper for the purpose of not giving way to any suspicions as to his true net worth. While this hypothetical situation may seem reasonable to a certain extent, what would happen if this wealthy, yet eccentric, man is subject to a civil liability lawsuit?
In the hypothetical case above, a plaintiff filing a civil lawsuit against an affluent man who likes to bury his riches could persuade an order from the court to investigate the respondent’s finances. If the investigation determines that the respondent is indeed the owner of significant cash buried underground, the next step might be a court order directing the rich man to comply with the terms of the ruling in the case or potentially be subject to being thrown in jail for ignoring the judges order. If the ruling compels the respondent to pay the plaintiff a million dollars, the wealthy man cannot dodge legal responsibility since the court found him to be the owner of the hidden cash. What if he was not the owner of the money?
Affluent people also know how to hide money in divorce cases; contrary to popular opinion, this does not involve the use of prenuptial agreements. In fact, prenups tend to do more harm than good from a legal point of view under many circumstances. In general, the rich know that hiding money is not a good idea in a post-9/11 of extraordinary fiscal transparency and suspicion. The rich do not hide their fortunes; they protect them by getting rid of the burden of ownership through instruments like a family trust fund such as the UltraTrust®, which is an irrevocable trust structured in such a way to take responsibility away from rich people while still allowing them to control their property and finances.
In essence, wealthy persons who use a family trust like the UltraTrust® for asset protection cannot lose their fortunes because they do not legally own them; however, this cannot stop them from being able to enjoy their mansions and luxury sports cars because they still have use over how their finances should be invested and used. This is an instrument that is not only efficient for asset protection; it can also be used instead of prenups and for estate planning purposes. We have all leased a car or rented an apartment. In these cases we get to utilize the assets and the benefits from the assets utility, but at no point do we own them – that is the big difference.
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