Never Judge a Book by Its Cover

“He has offshore bank accounts.”

When you hear this phrase, what is your gut reaction?

For those of us who consume the news, read John Grisham novels or watch TV, when we hear “offshore bank accounts,” our guts scream “tax evader!” or worse. We think a bad guy is hiding assets. We think mafia, drug running, embezzlement, assassins, Ponzi schemes, white collar criminals, lengthy trials, and jail time. The media tells us that if someone has an offshore bank account, they have to be guilty, guilty, guilty!

Ok, that’s our gut reaction, which is often based on assumption, instinct and innuendo borne of rumor and half-truth. Continue reading

No Good Deed Goes Unpunished

Larry and Harold, best friends and business partners for the past 20 years, operate their successful company as an S corporation. They started with nothing and built their business from the ground up, working hard to increase profits through the economy’s ups and downs. Their partnership is truly an American Success Story.


Four years ago, Larry’s younger brother announced he was getting married. Larry was ecstatic with his brother’s new wife and asked what he could give the happy couple for their wedding gift. When his brother asked if Larry would be willing to co-sign a loan for a house, Larry didn’t hesitate. That’s what a good big brother does, right?

Unfortunately, four years of recession left Larry’s little brother unemployed and struggling to pay his bills. Larry had no idea how dire his brother’s situation had become until he received a notice in the mail that the bank was foreclosing on his brother’s house, which was now only worth half its mortgage. Continue reading

Tony Soprano’s Estate Gets “Whacked”

The cost of being penny wise and pound foolish…

Actor James Gandolfini, who made the mobster Tony Soprano a household name, suddenly died in June of a heart attack at the age of 51. News quickly morphed from sadness over his untimely death to shock over his seemingly ill-conceived estate plan, namely, his will, which was so poorly drafted that up to 80% of his assets are rumored to be subject to a 43% estate tax.

Here’s irony for you: While Gandolfini’s iconic Soprano’s character spent his life running from the government, the actor who played him on TV made the government his primary beneficiary.

I don’t think he did it on purpose.

According to news reports, Gandolfini had an estate worth an estimated $70 million at the time of his death. Looking at the way he bequeathed his assets, Gandolfini’s estate will pay about $30 million in taxes, most of which will come from the shares he left his wife and newborn child, due in cash within nine months of Gandolfini’s death. Continue reading

Bad Things Happen to Good People

I know, I know. Such a cliché.

We go through life hearing terrible stories about horrific things that happen to other people. Many think, “Well, that’s awful, but it could never happen to me.” After all, you could never do anything bad enough to get sued for so much money that you could lose personal assets like your car or your house.

Could you?

This is a true story about two really smart, very nice people who thought the same thing… and were wrong. Continue reading

The Use of Small Captive Insurance Companies for Efficient Risk Management, Tax Benefits, and Asset Protection

Ever since the 1930s, large companies in the United States have been forming their own property and casualty insurance companies in order to reduce the premium costs charged by commercial companies and insure risks otherwise not covered by commercial companies. During the past 20 years, the costs of establishing one’s own small captive business liability insurance company have come down so that middle market companies have been able to afford to use captive insurance companies to reduce their premium costs and insure risks not otherwise obtainable in the commercial markets. For example, owners of real estate use captive insurance companies to insure gaps in their existing coverage. Real estate owners have insured their deductibles, casualties that are too expensive in the commercial markets, risks where no commercial coverage is available, such as toxic mold, and non-traditional risks such as a change in zoning. Continue reading