Your Time for Asset Protection and Estate Planning is Almost Over - Part Four
So, for folks with estates of over $1 million, consider gifting much or all of your wealth to an international asset protection trust. Such a transfer will not affect your future income tax, BUT it will affect your future estate tax immensely. Your assets will stay intact for your children and grandchildren rather than being destroyed under a crushing 55 percent estate tax.
Reducing the Tax
For folks looking for ways to reduce their income tax, the code still has incentives for people who live or work full time outside the US. IRC Section 911 exempts roughly $90,000 in foreign earned income from US taxation and allows a tax free housing allowance of up to $13,000.
Many folks who work over the Internet, for foreign employers, or sell goods and services to foreign customers could qualify for the exemption if they become bona fide non residents. That doesn't mean expatriation or even getting a second citizenship. It just means living and working outside the US. For people who qualify and desire to live abroad, this may be the "middle class" version of sitting out the new Obama tax increases. With the popularity of residency programs in such places as Belize, Panama and Costa Rica as well as a variety of second citizenship programs, I believe the Laffer Curve is alive and well.
The Effects of 2013
As the Government works harder and harder to collect more revenues, the average person (of any income tax paying and/or wealth status) will work harder and harder to avoid the effects of these new and burdensome taxes. In the end, those who actively "sit out" these taxes (one way or the other) will pay less, while those of us who do nothing are destined to pay significantly more. In the case of the gift and estate tax planning, this next month may be the last opportunity in a generation to protect your wealth and pass it onto future generations free of the looming estate tax increases scheduled to take effect January 1, 2013.
Joel M. Nagel is an international lawyer and entrepreneur focusing his practice in the area of asset protection, cross-border transactions, and global investment. He speaks all over the world on the topics of asset protection, global banking and investment, and international legal compliance.
Joel has written articles and has been quoted by Forbes, Fortune, Live and Invest Overseas, Hemispheres Publishing, Sovereign Society, Sovereign Man, Stansberry Research, Oxford Club, Pirate Investor, True Wealth, Islands magazine, Business Times, Physician’s Money Digest, and the Simon Letter. He also hosts a weekly radio program called the “Global Legal Advisor” broadcast over the Web on the Overseas Radio Network. Joel can be reached via email or 001-412-749-0500.