A front page article that appeared on the Wednesday, April 6, 2016 New York Times provides yet another example of the dangers of hiding assets. Successful asset protection makes use of laws that allow you to protect your assets — while keeping them in full view. Hiding assets frequently involves illegal activity; and even when legal it is a risky approach. The article by Steven Erlanger, Step
hen Castle and Rick Gladstone, titled “Airing of Hidden Wealth Stirs Inquiries and Rage” — illustrates some of the disasters that strike when “hidden” assets are suddenly not hidden anymore.
Millions of documents leaked from a single Panamanian law firm disclosed how many very wealthy people were hiding money in secretive shell companies and off-shore tax shelters. The Prime Minister of Iceland has already resigned following the disclosures. The British Prime Minister has asked for a government inquiry; and officials in France, Germany, Austria and South Korea are beginning investigations into possible money laundering and tax evasion.
There is certainly nothing wrong with trying to keep your financial affairs private. But keeping things private does not mean failing to pay applicable taxes or violating U.S. banking laws. The most effective asset protection plans are centered on taking advantage of laws that allow you to protect your assets–not hiding those assets. Privacy is of course a consideration but the key is protection.
The New York Times article provides a good reminder of how hiding assets can frequently backfire.