"Ooh wow, I better understand how the system is specifically structured to grant inherit privileges to those with wealth, now I feel... ???"
Navigating these systems takes an education you can get for free, and a few hundred $ a year. Obviously there are lots of people who are not wealthy, for whom there is no risk and hence no need to reduce risk.
Getting educated about asset protection is not bad to do before you acquire assets. Just like the legal structures and implications for marriage are best learned before, not after, getting married.
You don't need to be wealthy to be educated on the topic. Those that plan to get wealthy might find it beneficial to learn about this before they "lose it all". Lots of people learn how the world works "the hard way". I'd prefer you didn't.
Naturally those with unprotected assets are also the juiciest prey for those who thrive on the misfortune of others.
I have (by my stnadards) a high NW, much of which is non-retirement accounts, but some of that is due to my having virtually zero non-monetary assets to my name. I guess I'm curious what I should be looking out for, if and when I pick a place to settle and purchase something.
I guess at the very least, this is something of a reminder that I should be purchasing decent traveler's insurance, especially in lieu of an American rent.
BTW, I appreciate you engaging me kindly, when I had somewhat glib replies earlier.
Or maybe a better question, where's the "oops I have a pile of money, now what" literature I should read?
For me, the goal is to separate assets from liabilities. I own a business and that business has creditors, some of whom require me to be personally liable.
So any asset I own is "at risk". I'm not expecting a problem, but life happens sometimes.
If I have a house a creditor can force the business into bankruptcy, and my house can be lost. If the house is not in my name (say its in a trust, or perhaps my spouses name) then it's not "mine to give". In simple terms if I hold liabilities and my wife holds assets, (and we have a suitable marriage contract) then creditors can't take those assets.
Obviously making creditors whole is the goal, but that can be done well, or badly, depending on your juciness.
Everyone's situation is different. The legal framework is different in different places. Which us why you need an advisor in your country / state to assess your risks, and possible mitigations. Don't just take advice from the Internet, or even your buddies. You need to understand your goals and needs.
Trusts can be an important part of the equation, so that's sometimes a good starting point to evaluate advisors. Even if you don't need a trust you want to feel like the advisor understands them etc.
However why would I give such a company credit unless it’s assets outstrip its liabilities?
Banks (and other financial institutions) make loans all the time that are not necessarily backed with collateral. This is reflected in the interest rate that you pay.
YOU decide whether to risk your house or not. If you do do it, then at least you're doing it intentionally and not by accident.
Of course bank loans are the tip of the iceberg. Lots of creditors want personal sureties, not just on your loans but others too. Most of those sureties contain language like "all present AND FUTURE" debts. You got divorced 30 years ago? They don't care.
(complex, basically impenetrable systems that also can effectively shelter large sums of money and eliminate huge swaths of tax liability usually cost around 5-10k a year or so to maintain),
These systems of ownership/control protects these assets from risks such as personal or business liability, divorce court, bankruptcy, etc and at the more sophisticated levels can create cash sinks to eliminate vast swaths of tax exposure while tucking cash and other fungibles away in effectively untouchable zero-tax jurisdictions.
This is a system quietly utilised by virtually every international corporation as well as the vast majority of people with significant wealth. It is gravely underutilised by people of modest wealth. A trust provides very strong protection for multiple assets for less than 30 euros a month in many cases.
It’s worth noting the obvious, that one entity can hold many assets so that the cost is spread over your entire risk position.
You should speak to a financial advisor and also look into ways to charge off surplus cash reserves offshore if possible, though it’s possibly too late to do this in an ideal way to reduce your tax exposure.
The goal for fungibles is to move your profit centres offshore to better tax jurisdictions, and although this sounds complex, it’s not really that difficult.
An offshore can hold your IP, and your local can lease that IP from the offshore, absorbing the majority of your revenue, for example. Or you can set up a private insurance company so that all insurance costs go offshore. Offshore private retirement funds are a thing.
Offshore companies can hold assets that you then lease from them, such as real estate, vehicles, boats, planes, etc. They can be very profitable, tucking those profits away in tax-favourable jurisdictions while absorbing large chunks of discretionary revenue from your operations in less tax-favorable situations.
All of these can have tax advantages for avoiding taxes you don’t need to owe, and most of them create very very deep legal moats around the assets that you seek to benefit from.
The mechanisms for relinquishing legal ownership and direct control (therefore liability and vulnerability) while retaining the use and benefit from your assets are sophisticated and well established.
There are a lot of things that people do in society which I've declined to do as well because I feel that they're wrong but I've come to realize the way to make people stop doing those things is to just do them in a really oafish way so that the public sees how bad they are and hopefully they'll fix it.
However it should be noted that the use of on-shore trusts to separate assets from risks and liabilities does not intrinsically have either a tax-saving goal, or a tax-saving effect (depending on your jurisdiction.)
Personally I make use of asset-protection structures, but in an on-shore context. I live here, I enjoy benefits here, and I'm happy to pay my share of taxes here.
My point is that offshore trust structures, and onshore trust structures (among other options) have very different use cases, tax implications, and costs. Use of one does not imply use of the other.
(Also as I said elsewhere in some states - Texas - they can't seize your home anyway, excepting stuff like mortgages)
There are a variety of potential benefits (tax, inheritance, legal liability, etc) but one that shouldn't be underestimated is how much it can simplify the paperwork, process and delay at death vs just having a will. If you are elderly and have kids, creating a proper trust in sync with your will is one of the nicest things you can do for your kids. Having recently been through the death of a couple of parents, one who left a well-organized trust and the other who just had a standard will, the difference in work required and stress involved was night and day.