OIW Trust Associates LLC

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Saturday, April 18, 2015

Chatter that Matters- A Tax-Deferred Strategy to Escape Instability and Volatility.

A Tax-Deferred Strategy to Escape Instability and Volatility.

By now you probably agree that it would be potentially lucrative to invest overseas, but to do so as a U.S. citizen is particularly difficult because you cannot do so without an offshore structure and all that comes with it…Huge penalty risk and costs for compliance with FATCA and added scrutiny and targeting for audit for starters.

The Deferred Variable Annuity "DVA" is the solution that avoids 90% of the penalty risk and compliance costs associated with FATCA, and provide access to global investment opportunities WITH…

•    Privacy Protection
•    Asset Protection
•    Investor Protection
•    Tax Planning
•    Integration with Existing Asset Protection Structures
•    Flexibility

While the U.S. markets have rebounded, we are not out of the woods. Until the Fed finally makes its first rate hike, instability and volatility.

If you have a traditional investment account-and you're searching for something better-ask yourself if what you are considering is giving you tax-deferred growth? Does it give you easy access to global markets and multiple currencies?

A foreign deferred variable annuity, or DVA, is an insurance policy that allows you to invest and grow your money, tax-deferred, until you elect to receive payments. But unlike its American relative, a foreign DVA allows you to invest and protect your money abroad with no negative tax consequences during the term of your policy.

With all the current tax reporting requirements for foreign accounts, the foreign DVA is convenient because it gives you a way to participate in the international equities market and benefit from U.S. tax-deferral on the growth of these investments.

A foreign DVA allows your money to invest in literally anything from currencies, bonds, mutual funds, and commodities...to alternative investments like hedge funds and managed futures.

You can't get all that in an American DVA.

Plus, you can get a nice bump in income when you reinvest the tax-deferred growth and the savings to compound over the course of, say, 5 or 10 years.

Of course, you'll have to pay taxes once you take a distribution, but it will be less than if you paid them over the long term.

And while it’s hard to guess what the future U.S. income tax rates will be, the strategy here is that when we are older, we may be in a lower tax bracket because our active income is at a much lower level.

An Extra Layer of Wealth Protection

Plus, there is another benefit. Unlike your traditional investment account, which would be an easy target if you become the victim of a lawsuit, the DVA offers a great shield.

In the United Sates, where 16 million lawsuits are filed every year - or one new lawsuit every two seconds-anyone one with wealth is a target.  With some customization, it is possible for your policy to be "judgment proof." Creditors will not be able to attack the contract and you cannot be forced to assign the future benefits of your policy to a creditor...especially when it is combined with your Wyoming Trust Strategy.

So, What is an Annuity?

Simply stated, an annuity is a financial product sold by insurance companies that allows you to put aside money, have it increase each year without paying taxes, and then trigger a stream of future payments on a timetable you may control. Those payments are taxed as ordinary income. Unlike IRAs, there is no income limitation on how much you can place in an annuity.

Variable annuities are designed to let investors participate in the stock market and still enjoy the tax-deferred, insurance, and lifetime income benefits of an annuity.

Please don't get confused by the terminology "insurance contract". From a tax point of view it is a variable annuity. Over here all contracts (annuities and insurance) are contracts with an insurance company and therefore referred to as insurance contact.

You the Trust Settlor can be the policy holder with the Trust as beneficiary OR the Trust can be the Policy Holder with a 2nd trust as beneficiary.

Is it safe in Switzerland?
Not a single insurer has ever failed during the entire history of the insurance sector…more than 160 years.

Asset protection….

The investments are owned by the insurer and cannot be seized by your creditors and cannot not be included in a bankruptcy proceeding AND

If the policy holder is not your Wyoming trust but you and YOU declare BK, the spouse (if not in BK) and the beneficiaries automatically replace the policy holder/YOU


The insurer operates under insurance secrecy laws and can only release information under court order for a criminal investigation.

Annual ROI…


Estimated Fees?

5% to establish and 1% annually OVER $30 million 0.25% to establish and 0.25% annually

Tax Reporting…

Form 8938 with tax return (Form 8938, Statement of Specified Foreign Financial Assets)

Report of Foreign Bank and Financial Accounts (FBAR) FinCEN form 114 on or before June 30th

"The Deferred Variable Annuity is currently the only "Offshore" investment vehicle that we recommend for our clients" and our Switzerland-based partner is one the leading financial service companies specializing in DVA’s.

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