The Panama Papers

What are they?

The Panama Papers are the 2.6 Terabytes of information which an International Consortium of Investigative Journalists released which showed the true ownership of thousands of offshore companies.  This included connections to as many as 150 global politicians which have been implicated and connected to those supposedly secret offshore companies.  This includes the Prime Minister of Iceland, the leaders of Brazil and China and even Russian President, Vladimir Putin.

So What’s the Big Deal?

The big deal is that world leaders and politicians are secreting away money, presumably ill-gotten in many cases, or as in the case of The Icelandic Prime Minister, at least self-dealing.  These leaders are saying one thing and doing another (big surprise there).  They are using their power and influence to do deals and funnel public money to their own offshore companies, lining their own pockets at the expense of the countries they were elected to serve.  Indeed this is a very big deal!

But for our purposes, the real question is: “What does this mean for legitimate uses of offshore companies, jurisdictions and banking, such as Asset Protection?”

Surprisingly, the answer is very clear, and pretty simple.  It doesn’t really mean anything.

Why Asset Protection is Different?

Using an international company, creating a trust or opening a bank account anywhere in the world is legal in the United States, and in most countries for that matter. What is problematic is HIDING assets with those same things.  As long as you disclose your use of an offshore company and any offshore banks, then having them is completely legal.

The Panama Papers were about HIDDEN assets, not about offshore assets.  The offshore only came in because that is how most people attempt to HIDE the assets. And this is yet one more example of how attempting to use secrecy is just a bad idea all the way around.

The Takeaway

Don’t attempt to use secrecy, international companies, or private numbered accounts (not that you could get one of those anyway) to avoid taxes or hide assets.  It doesn’t work, and worse is likely to get you into much more trouble than you started off with.  A legitimate asset protection plan may use an offshore company, an international trust and a foreign private bank; however, all of them will be completely disclosed, reported and accounted for.

Or better yet, utilize the The Bridge Trust® which combines the protections of an international trust with the simplicity of a domestic trust.  This provides you with the ability to keep your money where it is today, but builds a path to safety if you ever need to use it.