The EWP Stories Video Series – Part 1 – Episode 3

Expanded Worldwide Planning: Insures: PRIVACY – 3

Introduction

Welcome. Privacy is a key element. Wealthy families are looking for ways to keep their affairs private, and still be compliant with tax authorities worldwide.

Today what was once private and personal becomes public and accessible to all. Computers and other electronic devices are part of our lives, whatever our opinion of them. These devices can add convenience and efficiency to our lives, but at a cost.

At EWP Financial we embrace the Privacy Principle. The Privacy Principle is unique as it legally shields wealthy families from unwanted intrusions into their financial affairs. At the same time, the Privacy Principle is fully transparent and gives wealthy families a bespoke, compliant asset structure for all their holdings, wherever they might be throughout the world.

We continue our story on the plight of Carlos Gutierrez. The scene is Mexico City where we discover how the same drug cartel that kidnapped Carlos’s daughter, Lucinda, is planning to publicly destroy Carlos by using bribery to bring a falsified lawsuit against Carlos.


Diego wondered how he was to receive his bribe. He was told by his contact to buy a burner phone on Wednesday, and throw it away that evening after he received a text. His contact had booked him a table for 7pm at the Bellini Restaurant, atop the World Trade Center on the 45th floor in Mexico City.

“Good evening, sir,” said the handsome young man in his well-tailored valet parking uniform.

His car door was politely closed, and Diego pulled away, feeling somewhat sheepish and out of place with his old Prius at this expensive restaurant in Mexico City. The Bellini was an uncomfortable experience for Diego. This showed in the perspiration draining down his shirt from below his armpits. In his highly excited state, he had forgotten to put on deodorant this morning.

He had barely noticed the dazzling lights that lay below him. He ate but did not taste the exquisite meal that was paid for by his contact. The restaurant magically revolved 360 degrees, but he might as well have been facing a blank wall. Diego only thought of one thing, and one thing only: “Will I get paid, or will they kill me instead.”

As he was traveling toward his small apartment, he received a text, Look in the glove box, then destroy your phone. I mean destroy it completely.

Diego opened the glove box to find a bulging manilla envelope, which filled his entire glove box. He tore it open to find cash. Plenty of cash. 400,000 pesos, about $20,000U.S. dollars. The equivalent of his annual salary.

Why were 400,000 pesos put in his glove box? The reason was simple. Diego worked at the Servicio de Administración Tributaria, the SAT. The SAT is the revenue service of the Mexican federal government. Diego had access to information that the cartel wanted to destroy Carlos Guittierez.

A new law had come into effect January 1, 2020. The law stipulated that tax evasion will turn into a charge of organized crime if three or more people are aware of an illegal tax scheme. This could result in companies being held criminally liable for tax offenses. Diego had access to salient information in Mexico’s Register of Beneficial Ownership. The cartel was going to use this information to falsely charge Carlos under this new law.

How ironic that a successful businessman like Carlos could be discredited by an organized crime cartel when he went to great lengths to comply with all of Mexico’s laws. In a sinister way, the designs of Carlos’s intricate electronic components mirrored the devious, deceptive, and criminal practices of the cartel. One was used for good, and the other to destroy an innocent man.

—————————————————————————————————-

Conclusion

In our introduction, we mentioned the Privacy Principle. The Privacy Principle of EWP accomplishes its objective in several key ways:

  • Upon transfer into the PPLI policy, the insurance company becomes the beneficial owner of all the assets in the policy;
  • If there is reporting to a tax authority for the asset structure, only one number is reported. This is the total cash value of all the assets in the PPLI policy. The individual assets are not reported;
  • The bank account that is usually opened in connection with a PPLI policy is opened in the name of the insurance company, not the policyowner. The policyowner has full access to the funds in the bank account in accordance with the assets inside the policy.

In our next video, Episode Four, we conclude our story. The scene shifts back to California. Carlos realizes that he must reconstruct his financial affairs using an EWP asset structure. He also realizes that if he had employed an EWP asset structure the kidnapping of his daughter and the falsified lawsuit would most probably not have occurred.

If you enjoyed this video, please give us a like below, and click on the subscribe button. We look forward to connecting with you in Episode Four.

To learn how the wealthiest families in the world conduct their financial affairs, please call +1 530 692 1007, or email us at info@expandedworldwideplanning.com.

At your convenience, we can arrange a call to discuss how our unique blueprint can vastly enhance your asset structure.

Disclaimer

The opinions expressed in this video are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual on any financial structure, investment, or insurance product.

by Michael Malloy, CLU TEP RFC.

CEO, Founder @EWP Financial

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

 

The EWP Stories Video Series – Part 1 – Episode 2

Expanded Worldwide Planning: Insures: PRIVACY – 2

Welcome. The topic of our story is Privacy. You gain an immediate understanding of Privacy when you are deprived of it. What better example of this than the personal violation that you experience when someone you dearly love is kidnapped? In Part 2 of our story, we learn more of the emotional trauma that Carlos Gutierrez experiences when his daughter Lucinda is kidnapped by a Mexican drug cartel.

Privacy is one of the six principles of Expanded Worldwide Planning, or EWP for short. When assets are placed into a properly constructed Private Placement Life Insurance policy they are re-titled in the name of the insurance company. This is similar to the re-titling of real estate when it is transferred to another entity like an LLC. This has the effect of removing these assets from the prying eyes of those who seek to harm you, like the drug cartel in our story.

————————————————————————————————————-

Carlos weaved to the door of the warehouse, followed closely by his pilot. Carlos fumbled with the key and finally opened the door to the office warehouse. His long-time pilot also functioned as confidant and body guard, so he told him in Spanish what just occurred.

Carlos was educated mostly in the United States, having received a masters degree in electrical engineering from Columbia University in New York. But English was his second language. Like all of us in times of emotional turmoil, he sought some comfort. Presently the only solace available was to speak his native language.

The plight of his daughter was beyond devastating, but the next step he knew was only a phone call away. He would call his insurance broker. Carlos had purchased Kidnap and Ransom insurance for his family, since the Mexican drug cartels had recently moved into his native Michoacan state, seeking to legitimize their sources of income by terrorizing the local avocado growers. By means of intimidation and violence, they sought access to this lucrative agricultural industry. His family were third generation avocado growers.

What put Carlos into a state of emotional delirium was hearing the voice of Juan, his best friend at Columbia University. Juan had been a model student, an honor student like Carlos, and a kind and generous person. His involvement in his daughter’s kidnapping seemed preposterous. He would not have believed it, if it weren’t for hearing his voice.

Carlos was meticulous in his financial affairs. His company had the ability to assemble the most advanced and sophisticated electronic components. He had become a billionaire in his early 40s through his design of innovative electronics for medical devices. He abided by the aw, both in Mexico and the U.S. Carlos was proud to be a citizen of both the U.S. and Mexico, even though it cost him financially to do so.

The last time Carlos had been with Juan was after college at his family farm outside the city of Uruapan. They had climbed onto one of the old avocado trees, to drink beer together and eat avocados. They were looking forward to launching their careers after college. He remembered the solid branches supporting them, the ripe avocados at their fingertips, with the dappled sunlight making the tree a private world of their own. He remembered the light being soft and multicolored like the light coming through stained glass in a church. They exuberantly discussed their prospects. Joining a drug cartel was definitely not on their list of future possibilities.

—————————————————————————————————-

Conclusion

In our next episode, the scene shifts location to Mexico City where we learn how the same drug cartel that has kidnapped Carlos’s daughter, Lucinda, has bribed an official of the Mexican tax authority in order to publicly destroy the reputation of Carlos.

We will learn how this could have been avoided, had Carlos used a properly structured PPLI policy. The information that was obtained by bribing an official of the tax authority, would not have been available had Carlos used an EWP structure. All his assets would have been put in the name of an insurance company, thus, shielded from the illegal activities of the drug cartel.

If you enjoyed this video, please give us a like below, and click on the subscribe button. We look forward to connecting with you in our next video.

To learn how the wealthiest families in the world conduct their financial affairs, please call +1 530 692 1007, or email us at info@expandedworldwideplanning.com.

At your convenience, we can arrange a call to discuss how our unique blueprint can vastly enhance your asset structure.

Disclaimer

The opinions expressed in this video are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual on any financial structure, investment, or insurance product.

 

by Michael Malloy, CLU TEP RFC.

CEO, Founder @EWP Financial

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

 

 

The EWP Stories Video Series – Part 1 – Episode 1

Expanded Worldwide Planning: Insures: PRIVACY – 1

Welcome! Here we begin a new series of stories to dramatize the six principles of Expanded Worldwide Planning, or EWP for short. This story will teach you how an EWP asset structure could have prevented the kidnapping of the journalist daughter of a billionaire Mexican-American businessman.

For many wealthy Mexicans, Central Americans, and South Americans privacy protection is a life and death issue. This story dramatizes the struggle between wealthy families and organized crime cartels. What unfolds in our dramatic story is a testimony to why you need to protect your own assets with an EWP Asset Structure.

—————————————————————————————-

The hot, dry night air seemed to smother the sleek, six passenger Cessna Citation XLS jet. The plane had just touched down on the tarmac of this isolated runway. Next to the gleaming white jet was a gigantic windowless warehouse. The eerie, yellow lights that protruded from the warehouse turned the body of the private jet the color of an overripe mango fruit.

As he emerged from the plane, Carlos Gutierrez felt the skin on his face tighten from the baking heat of the desert. He walked briskly to the newly completed warehouse and his cell phone rang.

He usually did not answer calls from unrecognized numbers, but he was expecting a call from his daughter, Lucinda.

“Hello,” he said. The voice on the other end was strangely familiar.

“Juan, is that you?”

“Yes.” said the now unmistakable voice of his best university friend. The voice was indeed Juan’s, but it had none of the joy and conviviality that he associated with it from university days.

“Carlos, we have your daughter, Lucinda.”

“What? I don’t understand. What do you mean?”

“Carlos, I now do the finances for one of the cartels that Lucinda wrote about in her article. We want ten million dollars for her release. We will not compromise. We want the money now. We will give you 48 hours to deliver it, and, if we don’t receive it, we will be forced to do other things to your beautiful daughter. I will call you in three hours.”

The line went dead.

————————————————————————-

Conclusion

Our story continues in Part Two, where we will learn more about the university friendship of Carlos Guitterez and Juan, and how Carlos went on to become a billionaire with his sophisticated electronic components for medical devices. Most importantly, you will discover the tremendous value of having an EWP Asset Structure protect your own privacy.

If you enjoyed this video, please give us a like below, and click on the subscribe button. We look forward to connecting with you in our next video.

To learn how the wealthiest families in the world conduct their financial affairs, please call +1 530 692 1007, or email us at info@expandedworldwideplanning.com.

At your convenience, we can arrange a call to discuss how our unique blueprint can vastly enhance your asset structure.

Disclaimer

The opinions expressed in this video are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual on any financial structure, investment, or insurance product.

 

by Michael Malloy, CLU TEP RFC.

CEO, Founder @EWP Financial

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

 

Video Series – 4 Essential Minutes on PPLI – 3

Four Essential Minutes on PPLI

Video 3: Q&A

Our most sophisticated clients ask penetrating and very relevant questions. The three best questions that we have been asked over the years about EWP Structures are:

Is it legal?

Can they steel my money?

Will I be audited?

Here are the answers to the first two questions.

Is it legal?

This is not the entry to an EWP asset structure.

Is it legal? It seems every few months that there is another revelation of a tax dodger using offshore accounts to avoid U.S. taxes. Here is a recent newspaper headline: “The IRS Reals in a Whale of an Offshore Tax Cheat—and Goes for Another.”

Is an EWP Structure just another one of these schemes? Our EWP Structures have existed since the early 1990s with no issues of any kind either from the IRS or the families who have employed these asset structures.

Can they steal my money?

These menacing robbers won’t steal your money.

Can they steal my money? The answer is, “No.” Why is this so? Because all your assets are held in separate accounts by a trustee. This is a similar arrangement to having a trust account at a bank. The bank becomes the trustee of the asset, but ownership does not change hands—you retain ownership of all the assets held in an EWP Structure.

Wikipedia’s article on International Tax Planning features the six principles of Expanded Worldwide Planning, or EWP for short. EWP Financial embraces these six principles in designing its asset structures.

Privacy

Asset Protection

Tax Shield

Succession Planning

Compliance Simplifier

Trust Substitute.

The United Nations Global Compact embraces another six principles that are pertinent to EWP Financial. They are the six Principles for Responsible Management Education.

Next we have some short segments that enact these six principles in a poetical form.

Values

Research

Dialogue

Method

Purpose

Partnership

Next Video

In our next video we will give you insightful knowledge on the six principles of EWP as Wikipedia presents them in their International Tax Planning article. This knowledge is absolutely essential for the asset structures of any wealthy family. We will also answer the question: Will I be audited?

If you found this video useful please give us a like and click the subscribe button. We look forward to connecting with you on future videos.

To learn how the wealthiest families in the world conduct their financial affairs, please call +1 530 692 1007, or email us at info@expandedworldwideplanning.com.

At your convenience, we can arrange a call to discuss how our unique blueprint can vastly enhance your asset structure.

Disclaimer

The opinions expressed in this video are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual on any financial structure, investment, or insurance product.

by Michael Malloy, CLU TEP RFC.

CEO, Founder @EWP Financial

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

 

Private Placement Life Insurance and the Tax Code

 Webber Revealed: The Real Opinion

What is commonly considered an aggressive tax strategy is when you take a section of the tax code and bend it in favor of a tax benefit. Our approach with Private Placement Life Insurance (PPLI) is to use the tax code sections that are pertinent to our structure as a guide to make the asset structure fully compliant with the code. No element of the tax code is bent or stretched to obtain a favorable result.

We use the tax code as a road map to be followed, and not something to be diverted or obfuscated in any way. Is it not preferable to rely on the tax code rather than an opinion letter from a law firm? This opinion letter is just their interpretation of the tax code. Why rely on opinion when you can base your asset structure on the language of the tax code itself?

Those who call our firm’s PPLI structures aggressive do not fully understand the tax code, although they present themselves as experts who do. What you find in their articles is the same misunderstandings regurgitated time and time again, until, in the end, they are believed to be truths.

These misunderstandings are also repeated time and time again at the usual PPLI conferences that are held throughout each year, which entrenches these misconceptions and half truths about the true nature of the tax advantages of PPLI. In our next few articles, we will discuss the topic in detail, and give you the tax code sections, so you can prove our points for yourself.

Read Full Article

Download PDF

 

by Michael Malloy, CLU TEP RFC.

CEO, Founder @EWP Financial

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

 

 

 

EWP PODCAST with Michael Malloy CLU TEP RFC

Expanded Worldwide Planning Interview with Michael Malloy

Joe Robert Podcast

Download PDF

Summary

Michael Malloy CLU TEP RFC  –What is Expanded Worldwide Planning (EWP)?

–Expanded Worldwide Planning or EWP for short was born out of a desire for the world’s wealthiest families to have a more secure and tax efficient way to structure their assets.

–Frankly, in the early part of this century the planning for ultra high net worth families had just become too complicated, and was not accomplishing its goals.

–Families wished something simpler and more straightforward, so firms like ours asked this question: what are the main principles of planning for ultra high net worth families? We came up with six:

–We asked ourselves: what financial product already has most of these in place by its very nature, and is recognized worldwide as a viable financial vehicle? The answer is—life insurance.

–But not your garden variety of life insurance. A specialized form of life insurance that dates from the 1970s–Private Placement Life Insurance.

–This form of life insurance is available to those who the SEC calls Qualified Purchasers, those who have investable assets of $5M or more.

EWP is unique in that it brings together disciples that most people take separately, but when put together in one package are much more powerful; they are:

  • financial planning
  • asset protection
  • estate planning
  • and life insurance planning.

Here’s what Bloomberg said in a recent article on PPLI:

“Athletes, celebrities, and family offices are embracing private placement life insurance, or PPLI, as a way to preserve wealth for their heirs. It’s a strategy that’s perfectly legal and has existed for decades.”

Bloomberg is so excited about PPLI because it delivers these benefits:

  • all cash value in the policy grows tax-deferred, and is paid out as a tax-free death benefit;
  • there are no income taxes for assets held in the policy, and this includes capital gains tax;
  • one can access the cash value through tax-free distributions from the policy;
  • one receives asset protection and enhanced privacy;
  • there is limited reporting to tax authorities;
  • the ability to avoid estate taxes;
  • and there are no surrender charges.

An outstanding feature that catapults PPLI above any other life insurance policy is that all asset classes can be placed in a policy:

  • real estate
  • physical assets like timber, oil, and mining
  • private equity
  • intellectual property
  • art and collectibles
  • yachts and private jets
  • and alternative currency denominations like bitcoin.

Let’s hear what Wikipedia has to say on the six principles of EWP in their International Tax Planning article. We will follow these Wikipedia descriptions of the six principles of EWP with our own Commentary.

Privacy

EWP gives privacy, and compliance with tax laws. It also enhances protection from data breaches and strengthens family security. EWP allows for a tax compliant system that still respects basic rights of privacy. EWP addresses the concerns of law firms and international planners about some aspects of CRS related to their clients’ privacy. EWP assists with the privacy and welfare of families by protecting their financial records and keeping them in compliance with tax regulations.

Our commentary—

In today’s world, there is no more hiding of assets in complicated structures offshore; it just doesn’t work. So how do you achieve both compliance with tax laws and privacy at the same time? This is what EWP does so well, and we will explain in greater detail as we go on.

Major data breaches are almost a commonplace event today. Besides data breaches, wealthy families are also threatened by aggressive journalistic groups, whose mission is to expose the financial dealings of wealthy families. EWP structures are a way that families can have both full compliance and privacy.

Asset protection

EWP protects assets with segregated account legislation by using the benefits of life insurance. This structure uses asset protection laws in the jurisdictions of residence to shield these assets from creditors’ claims. A trust with its own asset protection provisions can still receive additional protection with the policy.

Our commentary—

Throughout the world, life insurance is recognized as an asset that has great societal value. Death benefits alleviate governments from the burden of protecting families from financial ruin, when an unexpected death occurs in the family. Segregated accounts are mentioned here. These are specialized accounts set up by custodians that protect assets. In segregated accounts the assets are set aside for the families that own them. This makes them independent from both the custodian, a life insurance company, and most importantly from unwarranted attempts by creditors to seize them.

The insurance companies that we use at EWP Financial are headquartered in jurisdictions that have excellent asset protection laws, like Bermuda and Barbados. These laws are specifically written, so that these policies give families maximum protection from creditors’ claims.

Succession planning

EWP includes transfers of assets without forced heirship rules directly to beneficiaries using a controlled and orderly plan. This element of EWP provides a wealth holder a method to enact an estate plan according to his/her wishes without complying with forced heirship rules in the home country. This plan must be coordinated with all the aspects of a properly structured PPLI policy together with other elements of a wealth owner’s financial and legal planning.

Our commentary—

In many parts of the world, one simply can’t dictate how one’s assets will pass to the next generation; these are the forced heirship rules. Many European countries have these laws. In the U.S., Louisiana has forced heirship laws. These laws came about to protect certain close families members like children and spouses, but they can severely limit how a wealth owner distributes their estate.

An EWP structure is enacted outside the home country of the wealth owner, so if done properly the laws of the home country do not apply, and he or she is free to distribute their estate in a manner of their own choosing.

Tax shield

EWP adds tax deferral, income and estate tax benefits and dynasty tax planning opportunities. Assets held in a life insurance contract are considered tax-deferred in most jurisdictions throughout the world. Likewise, PPLI policies that are properly constructed shield the assets from all taxes. In most cases, upon the death of the insured, benefits are paid as a tax free death benefit.

Our commentary—

This is what occurs in a regular IRA or 401(k) plan, while money is kept in these accounts there are no taxes until the money is withdrawn. In an EWP Structure there is never a tax, because it either passes to the next generation as a tax free death benefit, or one makes distributions from the life insurance policy which also are not taxable.

Compliance Simplifier

EWP adds ease of reporting to tax authorities, administration of assets, and commercial substance to structures. In addition, the insurance company is considered the beneficial owner of the assets. This approach greatly simplifies reporting obligations to tax authorities, because assets in the policy are held in segregated accounts and can be spread over multiple jurisdictions worldwide.

Our commentary—

For most people a spider web is not a positive image. For this reason we use a spider web as a symbol of an overly complicated asset structure with multiple entities and a confusing array of boxes and arrows. In its complexity, what we call a Spider Web Structure might look impressive to some, but the end result is summarized in three words: overcomplication, confusion, and uncertainty.

We propose an alternative asset structure that we call an EWP Structure. At the heart of an EWP Structure is a PPLI policy which was born out of the necessity to achieve greater tax efficiency, privacy, and asset protection in one low cost structure with institutional pricing. A PPLI structure is made possible through the laws and regulations of life insurance. A much more stable and straightforward body of law than the more politicized tax laws and regulations worldwide.

Trust Substitute

EWP creates a viable structure under specific insurance regulations for civil law jurisdictions. In most civil law jurisdictions, trusts are poorly acknowledged and trust law is not well developed. As a result, companies with foreign trusts in these civil law jurisdictions, face obstacles.

Our commentary—

Some civil law jurisdictions do not recognize trusts in the same light as in most common law jurisdictions. In some asset structuring situations, an EWP Structure can be a viable substitute for a trust. Upon death of the insured person, the value of the assets in a PPLI policy, plus any death benefit is paid directly to the beneficiaries listed in the policy. This can facilitate the transfer of wealth and eliminate the need for a trust.

Interview Highlights – Part 1

 

Interview Highlights – Part 2

 

FULL INTERVIEW

 

by Michael Malloy, CLU TEP RFC.

CEO, Founder @EWP Financial

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

Expanded Worldwide Planning Stories-4

EWP STORIES-Succession Planning

EWP
International Tax Planning

Stories
Part 4: Succession Planning

Many countries, primarily in civil-law jurisdictions, require forced distribution of assets at death according to strict laws and regulations. This usually takes the form of percentage shares of assets that will be distributed to spouses, children, and other close relations of the deceased. A PPLI policy purchased outside the home country of the owner or policyholder is a method to mitigate these forced heirship rules.

The PPLI policy is a contract between the owner of the policy and the insurance company to pay the beneficiary of the policy the death benefit upon the death of the insured under the contract. A typical beneficiary provision of a life insurance policy states: “unless an alternate payment plan, acceptable to us, is chosen, the proceeds payable at the insured’s death will be paid in a lump sum to the primary Beneficiary. If the primary Beneficiary dies before the insured, the proceeds will be paid to the contingent Beneficiary. If no Beneficiary survives the insured, the proceeds will be paid to your estate.”

Since a typical PPLI policy is executed outside the home country of the policy owner, the forced heirship laws do not apply, as the policy will be governed by the laws where the insurance company is domiciled.

This element of EWP, (Expanded Worldwide Planning), provides a wealth holder an excellent method to enact an estate plan that conforms to his/her own wishes, and not be dictated by the forced heirship rules of his/her home country. To be successful this needs to be well-coordinated with all the aspects of a properly structured PPLI policy, as well as all the other elements of a wealth owner’s financial and legal planning.

Read Full Article in our Partner Site

Download PDF

by Michael Malloy, CLU TEP RFC.

CEO, Founder @EWP Financial

Michael Malloy-CLU-TEP