You’ve Prepared Your Assets for Your Heirs… Have You Prepared Your Heirs for Your Assets?

Dear Clients, Colleagues, and Friends,

The Loaded Question

“Dad, are we rich?”

Ethan’s father drops his fork mid-bite. “That’s an unusual question,” Roger carefully responds.

Ethan, who just turned 16 and still fears his father’s disapproval, hesitates before continuing. He knows there is an unspoken rule in his family to never speak about money. Despite his nerves, he plows on, determined to get to the bottom of the wild claims his classmates made.

“So, the guys said I didn’t need to get a summer job, and I was like, ‘yeah, right,’ and then they asked if I had ever Googled you – I mean us – as a family…which I hadn’t…so I did.”

“Ah,” responds Roger, “You want to know if it’s true.”

Ethan shrugs, embarrassed. “I guess,” he mumbles, eyes locked onto his plate.

Roger sets down his fork, gently folds his large hands and looks Ethan in the eyes. “Yes, it’s true, son. But that changes nothing. You are to work, you are to study hard and you are to go to college. You are to find a career – any career – and you are to live a productive life. An inheritance changes nothing. I know from experience, understand?”

Ethan nods.

“Now that this nonsense is cleared up, we will never speak of it again,” and true to Roger’s word, he didn’t.

Continue reading

“Puerto Rico’s Tax Benefits Are Too Good To Be True” – Want to Bet?

Dear Clients, Colleagues, and Friends: It has been a bit over 2 years since my esteemed colleague, Fernando Goyco, and I wrote an article about the Puerto Rico tax law Act 20 & 22 for Steve Leimberg’s Income Tax Planning Letter —

(Steve Leimberg’s Income Tax Planning Email Newsletter – Archive Message #44
Date: 23-Apr-13 From: Steve Leimberg’s Income Tax Planning Newsletter
Subject: Jeffrey M. Verdon & Fernando Goyco-Covas: Consider Moving to Puerto Rico to Eliminate Tax on Passive Income Exposure)

— extolling the virtues of the amazing new opportunities presented in Puerto Rico for both personal and business income tax planning. To refresh readers of the Client Alert, Act 20 eliminates capital gains tax on all Puerto Rico sourced income until the year 2034 provided you meet certain residency requirements, and Act 20 effectively reduces the tax on corporate profits to 4% (or 3% in certain special instances).

Since this article was published, we have received numerous telephone calls from U.S. taxpayers interested in determining if the new Puerto Rico tax laws will work for them. Answering their questions and sending them off to speak to their CPA’s, I would often get a message from the taxpayer that their CPA would discourage them from moving forward. The primary reason given by the CPA is that “Puerto Rico’s tax benefits are a ‘hype’ or too good to be true.”

Continue reading