How to Keep Your Wealth out of Uncle Sam’s Hands

A Publication of The Sovereign Society
How to Keep Your Wealth out of
Uncle Sam’s Hands
By Jeff D. Opdyke, Executive Editor
and Bob Bauman JD, Legal Counsel
The Sovereign Society
55 N.E. 5th Avenue, Suite 200
Delray Beach, FL 33483 USA
USA Toll Free Tel: (888) 272-0413
How to Keep Your Wealth out of Uncle Sam’s Hands
When I first read the October 2013 Fiscal Monitor report from the International Monetary Fund (IMF), I got scared …
And if you, too, care about preserving your personal wealth, then you should see the 100-plus-page report dryly titled
Fiscal Monitor: Taxing Times. It will leave you desperate to find measures to counteract the attack that will soon take
aim at your pocketbook.
The IMF has essentially given lawmakers from deeply indebted countries a paint-by-numbers kit on how to extract
larger tax revenues from anyone with any level of wealth. The underlying message is shockingly clear: Many developed
nations, especially the United States, should consider direct confiscation of personal wealth to raise additional revenue.
But it’s best that I let the report speak for itself and let you come to your own conclusions …
The sharp deterioration of the public finances in many countries has revived interest in a capital levy — a
one-off tax on private wealth — as an exceptional measure to restore debt sustainability. The appeal is that
such a tax, if it’s implemented before avoidance is possible and there is a belief that it will never be repeated,
does not distort behavior (and may be seen by some as fair). … The conditions for success are strong, but
also need to be weighed against the risks of the alternatives, which include repudiating public debt or inflating it away.
Those sentiments, from page 49 of the IMF report, should scare the hell out of anyone with even a modicum of wealth
… for that wealth could soon be under assault.
Consider what that paragraph above is really saying. Its sentiment is clear: You, the developed countries of the world,
have three options. You can default on your debt down to a level that is manageable … you can inflate the hell out of
your economy and in that process destroy your currency and probably spark a bout of hyperinflation … or you can
claim eminent domain over a portion of your citizens’ personal wealth and simply take it for the needs of the state.
Please understand that the IMF is not some wacky band of fringe-dwelling lunatics peddling daft ideas to no one of
importance. It’s the central banker to the world, and it’s funded by the so-called G20 nations, the world’s 20 largest
economies. Members of congresses and parliaments throughout the developed world take what the IMF suggests very
seriously. This report could easily serve as the backbone for future financial policies.
The organization doesn’t publish random musings. It deliberately sends messages to those with the greatest influence in
shaping the world’s monetary and taxation policies. The message it’s sending with this new report is that the developed
world is in a seriously bad way, and that the radical steps required to keep the cart on the rails mean that anyone with
any wealth will have to part with what they’ve worked so hard to accumulate … for the good of the state.
Scariest of all in the IMF’s assessment is the phrase: “If it is implemented before avoidance is possible.” The IMF recognizes that the medicine it prescribes will not go down without force, and that those of us who can will rapidly seek
ways to keep the government’s greedy paws away from our personal wealth.
To counter that, the IMF implicitly advocates a blitzkrieg approach to governmental thievery. Imagine waking up
some random Monday to find that the federal government has imposed a week-long “bank holiday” that limits access
to your own money to maybe $200 a day through an ATM. Or that the government is imposing a new “wealth tax”
that requires every American with a positive net worth to give 10% of that wealth to the government.
Can’t happen here in America?
Never underestimate the deviousness of desperate lawmakers — and America’s actions over the last decade speak to
nothing if not desperation. Washington has a history of surprise moves.
It has imposed bank holidays. Presidents have devalued U.S. currency overnight. Lawmakers have imposed “tempo2
rary” measures that are now permanent fixtures in our financial lives, including the income tax and the fact that silver
no longer backs any of our currency.
Do not think that this won’t hit you. The IMF is not calling on governments to soak the hated 1%. The IMF recognizes that not even the developed world’s richest citizens have enough cash to refloat the sunken system.
So … everyone with a positive net worth will have to relinquish a portion of their wealth.
The IMF is telling you what is coming. And I’m telling you that wealth confiscation is nothing to brush aside as impossible in America. We are a deeply, deeply troubled country. And deeply troubled countries always resort to unexpected
The threat of the state theft of your retirement savings has never been greater. But you don’t have to be a victim. You
just have to take a few steps in advance to gain some “confiscation insurance” that will protect your hard-earned savings.
That’s why I contacted Bob Bauman, our legal counsel and wealth-protection expert, to help me write this report. In
the following pages, Bob will lay out four crucial wealth-protection strategies to keep Uncle Sam from picking your
pension pocket.
Jeff D. Opdyke
Four Asset-Protection Secrets Every Investor Must Know
By Bob Bauman JD, Offshore and Asset Protection Editor
Strategy 1: Take Your IRA out of Harm’s Way
As Jeff mentioned, the government is hungrily circling your wealth and retirement savings. Make no mistake … when the government runs out of money, it will come for the $19.4 trillion that Americans hold in
retirement accounts.
The good news is that there are ways for you to escape any upcoming pension attacks. The first step is to
move your individual retirement account (IRA) offshore.
U.S. law requires that you use a U.S.-based custodian for an IRA. Right now, a custodian like Fidelity, American Express or T. Rowe Price is probably holding your IRA . But you may not be aware that your choice of
a custodian affects your investment selection … and the future of your retirement.
Your custodian makes the decision of which funds, bonds and equities you can trade within your IRA. Many
limit investments to publicly traded stocks, bonds, mutual funds and bank CDs. And it’s safe to say that
many limit you — and your money — to U.S.-based solutions.
But you can take control of your retirement savings.
You will need to move your IRA to one of a small group of custodians offering IRAs that allow you to invest in less regulated investments. Of course, this greater freedom comes with greater risk. To find out more
information about prohibited transactions, read IRS Publication 590. It describes what you can and cannot
purchase in your IRA and with whom the IRA can deal. I suggest you become familiar with what the IRS outlines
as it explains the penalties for premature withdrawal of funds and loans.
Now, let’s talk about moving your IRA assets offshore.
A few custodians permit alternative assets like gold, foreign real estate and offshore investments. There are a
few that also allow you to use alternative managers, like international money managers located in places like
Switzerland, Denmark or Asia. By moving your current IRA to the right custodian, you have the freedom
to work with a variety of investment advisors. You can find better and more profitable ways to achieve your
retirement goals.
Before I go much further, I want to point out that when you decide to switch custodians, some retirementplan providers will tell you that it is illegal to move the assets of your IRA offshore. This is blatantly untrue.
I can’t tell you how many times concerned conference attendees have approached me over moving their
money outside of the United States. Over the years, subscribers have faxed me the letters sent to them from
well-known firms telling them that their IRAs can’t move offshore. Yet, when they pushed the issue, the firms
always transferred their accounts. But this only happened after a senior member of the firm was forced to
get involved.
These institutions simply want to keep your money in-house. It is my belief that some firms resort to halftruths and outright lies to scare you out of liberating your wealth. You are perfectly within your legal rights
to move the assets of your retirement funds offshore. You just need to be persistent. It’s your money. The
hassle is worth it.
Pick an International Manager to Grow Your Retirement
When transferring your IRA, known as a “rollover,” it’s critical to work with an experienced professional. A
lot can go wrong with a do-it-yourself rollover. If you make a mistake, the IRS can view it as an early distribution. If this should happen, it will trigger penalties and the loss of your tax deferral. The safest way to do
a rollover is to have the money rolled directly from one institution to another.
Transferring your IRA to a new, more liberal custodian open to alternative investments will take two to six
weeks. A couple of custodians I suggest are Entrust Group or Texas-based Goldstar Trust. Your current IRA
custodian may take 30 days to release your funds. The fees for such a transfer range, but the average cost is
approximately $250 to $400 for a basic account.
Once you successfully transfer your funds to the new custodian, you have multiple options. You can selfdirect and open a brokerage account in the name of your IRA. Some custodians will allow you to purchase
foreign real estate with the cash in your IRA … or you can purchase physical gold.
However, many of you may choose to send your money overseas for a professional money manager to oversee. Putting your money in the hands of a manager with a non-U.S. vantage point can give a big boost to
your portfolio.
Foreign managers have insights into markets and companies that U.S. advisors overlook. They have experience
with foreign-currency diversification and stronger currencies, such as the Swiss franc, the Norwegian krone or the
Singapore dollar.
Offshore IRAs can also purchase and hold Swiss annuities and life insurance. Neither option is subject to
attack or repatriation under Swiss law. Or you can invest in precious metals. (I will discuss precious metals,
and foreign annuities and life insurance later on.)
Moving IRA assets outside of the U.S. and opening a bank or investment account in the IRA name makes it
very difficult for the U.S. government to attack those assets or repatriate them. That is especially true if you
invest in real estate or land.
And, last but certainly not least, moving your IRA assets abroad means that your retirement cash is outside
the U.S. banking system. In the event of a catastrophic banking meltdown here at home, your nest egg will
be safe, miles away.
I recommend a number of offshore advisors and money managers:
ENR Asset Management is an SEC-registered and privately owned firm headed by Eric N. Roseman.
Long-time Sovereign Investor members will remember Eric as our former investment editor and the
editor of Commodity Trend Alert.
ENR took over JGAM, the asset-management arm for American clients at Jyske Bank (Denmark’s
second-largest bank), when Jyske decided to discontinue providing investment advisory services to
Americans due to FATCA pressures.
Portfolio managers at ENR will invest your IRA funds based on your investment goals. Depending
on the size of your account, they can also roll your retirement cash into a self-directed IRA. This will
allow you to manage your own money, using brokerage firms overseas with which you might already
have a relationship.
ENR is lowering the minimum to open an offshore IRA by 50% to just $100,000 — practically the
lowest asset-management minimum being offered now. ENR is also lowering the annual management
fee by 25%, to just 1.5%.
Contact Information:
Toll Free: 1-877-989-8027
Email: [email protected]
Weber Hartmann Vrijhof & Partners Ltd. (WHVP) is an option if you prefer a traditional Swiss base
for your offshore IRA. Robert Vrijhof is the head of this private wealth-management and works with
IRA accounts. For a $500,000 minimum deposit, Rob will manage the account on your behalf, also
using Goldstar as the U.S. custodian. WHVP invests in stocks, bonds and currencies. It is a fee-based
Contact Information:
Tel.: +41-44-315-7777
Email: [email protected]
Alpine Atlantic Asset Management Managing Partner Daniel Zurbrügg and the staff at his firm are
also able to accept IRA accounts. And, like WHVP, the minimum deposit is $500,000.
Contact Information:
Tel.: +41-44-200-2300
Email: [email protected]
The firms I have mentioned can assist you with your IRA transfer since they all work with at least one, if not
both, of the custodians listed.
Strategy 2: Going Offshore With Annuities and Insurance Policies
One of the only remaining ways to defer paying taxes under the U.S. Internal Revenue Code is to purchase
an offshore annuity or life insurance policy that serves as a wrapper for investments.
Offshore variable annuities are one of the easiest ways to diversify your portfolio and invest your funds offshore. This type of annuity gives flexibility, protection and an assortment of tax advantages.
Annuities are tax-deferred, allowing your savings to grow. So, an annuity works well in your retirement plan.
After making an investment within it, the annuity makes payments to you on a succession of set dates —
providing a steady flow of cash after retiring. Now, a variable annuity is essentially the same thing but gives
you the option of selecting from an assortment of investments.
The payments you receive are based on the performance of those investments. As with all opportunities to
gain bigger profits, there is more risk involved. You can read more information about the taxation rules, etc.
on annuities in IRS Publication 575.
Specifically, a top asset-protection strategy is moving your deferred variable annuity (DVA) offshore. The
DVA delays payments, tax-free, until a date chosen by the owner. Many contracts give age 85 or 90 as the
maximum for the deferral period. They are perfect for long-term investors pursuing a stream of income for their retirement. And the offshore
version stands out from the domestic DVA because it allows access to a wide variety of international investment options: foreign currencies, foreign investment funds, and stocks and bonds.
With these policies, you can denominate your wealth into foreign currencies easily, opening the option to
receive payments in a higher-yielding currency. This gives you the ability to avoid the potential risks of inflation in a time of extraordinary U.S.-deficit levels.
Another option you can take is to make someone else the beneficiary in an annuity contract with a foreign
insurance company. Planning will maximize the value here. The products of a variable life insurance policy,
a form of private placement life insurance (PPLI), are institutionally priced with no surrender charges. You
can invest in real estate, hedge funds, private equity and traditional mutual funds.
You, as the insured, can transfer ownership of the policy to your children or grandchildren. And it is possible to pass on the income to your beneficiaries without bothersome estate and generation-skipping transfer
taxes. Making someone other than you the beneficiary is a secure asset-protection strategy because insurance
is rarely something that is subject to confiscation.
The death benefit is one of the advantages here. If you pass away before receiving the payments, the beneficiary will collect a specified amount (the greater of all the money in your account or an assured minimum).
But the main advantage is that foreign laws govern the contract. In fact, depending on the location — Liechtenstein, Nevis, Switzerland — you can have the type of asset protection that’s similar to an offshore trust.
Remember that you will need to report to the IRS each year once establishing the policy, as you would do
with any offshore financial account. When a policy is purchased, an IRS Form 720 must be filed and a 1%
U.S. excise tax paid.
For more information on how to set up annuities and life-insurance plans, I suggest you contact NMG:
NMG International Financial Services Ltd. of Switzerland, a subsidiary of the worldwide NMG
Group, specializes in insurance and financial consulting, pension administration and in tailoring investment solutions for private clients.
Active in more than 16 countries, with clients among the world’s leading financial service providers,
NMG helps create sophisticated financial structures in an international environment designed to guarantee privacy, protect assets and provide diversification.
Contact Information:
Address: Hottingerstrasse 21, 8032 Zürich, Switzerland
Tel.: +41-44-266-2141
Email: [email protected]
*Ask to talk to Managing Partners Marc-André Sola or Dr. Josef A. Haid.
Strategy 3: A Hard-Asset Safe Haven
Buying physical gold or silver is also a great asset-protection strategy. It’s always a good idea to have some
assets — foreign currency, stocks, gold — outside of the U.S. so that you constantly have access to money.
And there is a great way to achieve this essential financial freedom.
Rather than trying to meet the high minimums of international banks and dealing with tiresome U.S. reporting requirements, the best way to establish another nest egg is by buying gold bars in the largest size you
can afford and storing them in your name overseas.
This is a smart play for a simple reason: Overseas gold storage is not reportable as long as it is not tied to a
foreign bank account. This is just one of the offshore financial moves you can make that do not require U.S.
tax reporting.
And buying gold in the largest size you can afford is more financially sound than buying it in smaller bars
or buying fractional gold. Kilo bars are priced close to the spot market price — but the smaller you go, the
more margin is built into the price. Buying the largest size you can afford will provide the best value.
In the event that you need to sell your gold to access cash, large banks and precious-metal dealers are more likely
to purchase large gold portions than several smaller ones. This provides superior liquidity in times of need.
Keep in mind, the most significant part of this plan is location, location, location. For years, Zurich, Geneva and perhaps a few other places of less renown were the only options for overseas gold storage. That’s
no longer true. There is now a range of storage options to choose from — including Australia, Hong Kong
and Singapore.
Although all of those locations are perfectly fine safe havens, I believe Singapore is a cut above the rest.
Transparency International’s 2012 Corruption Perceptions Index ranked Singapore as the fifth least-corrupt
country out of 176. It is swiftly becoming a major financial center and a favorite among investors.
Some things to take into consideration:
1. Singapore is a multicultural society with English as one of the four official languages.
2. It’s safe, with a very strong rule of law … and it’s still flying below the radar as an offshore safe haven.
3. It comes with all of the advantages of easy air travel and a developed financial sector. This will make selling your gold fast and simple, should the need arise.
I recommend storing your gold with Hard Assets Alliance. It’s one of the best options I’ve found out there.
By using their vault storage, you can sell your precious metals whenever you like. They also allow immediate
access to your profits in case you want to make additional purchases or transfer to another account.
To learn more, you can visit their site at You can also contact them by email at
[email protected] or by phone at their toll-free number, 1-877-727-7387.
Strategy 4: An Enchanting Tax Haven
While Singapore is a great offshore haven for hard assets, some of you might be looking for an overseas haven
for yourself — away from the suffocating grip of U.S. taxes. In the past, death and renouncing your U.S.
citizenship were the only surefire, legal ways of escape. But a third possibility has revealed itself, thanks to
the Caribbean island of Puerto Rico …
Right now, U.S. tax policies are stifling. The U.S. taxes its citizens by virtue of their citizenship, regardless of
where they live and earn their money. Even leaving the U.S. permanently does not absolve you from paying
U.S. income taxes.
It’s no wonder that many Americans are turning to Puerto Rico.
Puerto Rico is an unincorporated territory (a commonwealth) of the U.S. in the northeastern Caribbean. It
is known in Spanish as the “La Isla del Encanto,” which means “the island of enchantment” — and that’s not
just for its mesmerizing beauty. The island is particularly enchanting because most residents, except federal
employees, pay no U.S. taxes on island income. (However, they are still required to file a federal tax return.)
And residents are considered U.S. citizens, so there is no need for a second passport.
Keep in mind that in order to qualify as a legal resident in Puerto Rico, you need to live on the island for at
least 183 days a year. And while U.S. citizens who become residents do not have to pay U.S. federal income
taxes on earnings made on the island, they must still pay the local Puerto Rican taxes.
This is only about 4% in certain cases — a small amount compared to the 39.6% in U.S. federal income
taxes (plus state taxes of up to 13.3%). But this low 4% rate only applies if the services are performed in
Puerto Rico for clients outside of the island. Otherwise, a local income tax of as much as 33% is applicable.
You should consult a tax expert to discuss individual cases and circumstances. I recommend Josh N. Bennett:
Josh N. Bennett has over 23 years of experience in law with extensive, in-depth involvement in all
aspects of international tax, estate and gift-tax planning for U.S. citizens, resident aliens and nonresident aliens.
Contact Information:
Address: 440 North Andrews Avenue, Ft. Lauderdale, Florida 33301
Tel.: 954-779-1661
Email: [email protected]
In addition, Puerto Rico recently slashed its taxes on dividends and interest to zero, and capital gains taxes
to as low as zero (with a maximum of 10%). And residents can avoid a 15% capital gains tax on assets held
before moving there if they sell the assets after 10 years of residence on the island.
The tax slashes are part of a recent program over the past year or so in which Puerto Rico has been promoting
itself as a tax-friendly jurisdiction open to Americans. The island’s government started this program in order
to compete with its better-known Caribbean neighbors, like the Cayman Islands.
Former Governor Luis Fortuno is responsible for the attractive tax incentives on the island. He not only
slashed property taxes to zero for new homeowners for the first five years, but he also included a 100% tax
exemption on all supplemental, passive income.
Trouble in Paradise
However, I should note that things might be changing in paradise. New Governor Alejandro Garcia Padilla
recently submitted his 2014 budget, and he has hinted at plans to reduce the government’s $2.2 billion
deficit to $775 million — partly through taxation. He plans to tax those who are “self-employed earning
$200,000 or more in revenue and those who purchase homes worth $1 million or more.” He has yet to pro8
vide the details of these proposed taxes.
Nonetheless, Michael Pfeifer, an international tax lawyer at the Washington, D.C., law firm of Caplin &
Drysdale, predicts that Puerto Rico’s tax incentives will continue to be used by some wealthy taxpayers as “a
new opportunity for income-shifting and tax-deferral.”
If the situation changes, our subscribers will be the first to know.
I hope you found this information helpful.
Faithfully yours,
Bob Bauman JD
Chairman, Freedom Alliance
We Call It Theft
I want to leave you with a quote that I find rings true, particularly with this report and Bob’s advice.
Economist Walter E. Williams wrote: “Three-fifths to two-thirds of the federal budget consists of taking property from
one American and giving it to another. Were a private person to do the same thing, we’d call it theft.”
The short and long of it is that it’s still theft, even when the government is the man in the ski mask telling you to hand
over your wallet. But by following these simple asset-protection strategies, you’ll be well on your way to safeguarding
your wealth from the government and gaining financial privacy and freedom. However, keep in mind that when “going offshore,” it’s always important to obtain proper legal advice.
Please contact The Sovereign Society if we can assist you in any way, or if you’d like to leave a comment or suggestion.
Until next time, stay Sovereign.
Jeff D. Opdyke
Editor, The Sovereign Investor
The Sovereign Society
55 NE 5th Avenue, Suite 200, Delray Beach, FL 33483 USA
USA Toll Free Tel: (888) 272-0413
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