The USA
Patriot Act
How
Does It Affect Our Estate Planning Strategies?
Not
long after being drawn into the War Against Terrorism, on September 11, 2001,
Congress passed, and the President signed the USA Patriot Act (USAPA), a far
reaching plan to free the hands of law enforcement to seek out and bring to
justice, those that would destroy the American way of life.
There
is no question that the Act takes us further down the road to serfdom, See The Road to Serfdom. Indeed, one could very well
argue that the Act goes too far, and that there are plenty of laws already on
the books to deal with terrorism. However, in my view, even with the current
Administration, I feel comfortable erring on the side of giving law
enforcement every tool it needs to thwart those who are willing to die, in
order to destroy the very rights that we would otherwise so fervently seek to
protect.
Some
of you might remember, James Madison, one of the founding fathers, saying
"Those who would trade their liberty for security, deserve neither, and
will lose both." However, Madison
was talking about economic security; not homeland security. If we lose our
homeland security, we will certainly lose both our economic security and our
liberty.
Having
said all that, the purpose of this article is to respond to the many
questions from clients and potential clients, as to the effect of The Patriot
Act on what we do with respect to foreign strategies. In short, the answer is
“Very Little!”
The
most important principle to grasp is that PRIVACY IS NOT ASSET PROTECTION.
Privacy
is only the first line of defense. I have worked very hard to create a
strategy that even if audited, or called on the carpet by a creditor, I could
sit across the table with my client, lay out my whole program, and say
“Here it is; try and break it.”
For
decades, if you have depended solely on privacy to protect your assets, you
were on very shaky ground indeed, and most likely breaking the law. If you have had a foreign bank
account, or even a domestic bank account for that matter, and failed to
report it, never mind failing to pay taxes on it, you have been an outlaw.
For
decades, it has been true that if a creditor obtains a judgment against you,
he can bring you into court and ask you about your personal assets. If you
stand on privacy alone and lie, and tell him you don’t have any; or if,
as a matter of principle, you refuse to disclose the whereabouts of your
assets, you will be in contempt of court.
The
purpose of asset protection is to give you the peace of mind that comes from
knowing that your loved ones will not lose what you have worked so hard to
achieve. If you have to lie awake nights worrying that somehow, some smart
detective will find where your gold is buried, you haven’t accomplished
very much.
The
key is to arrange your affairs so that even if your privacy is compromised,
nothing is changed. The Patriot Act may compromise your privacy; it may
someday even compromise your freedom. But unless and until that day comes, it
will not compromise your asset protection plan.
Copyright © 2002
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Ken Sisco
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