EWP At Its Best-1


EWP at its best 1

International Tax Planning (EWP) At Its Best

White Paper-Part 1

The authority of Expanded Worldwide Planning (EWP) has been firmly established. Wikipedia has recognized our knowledge-based solutions for wealthy families by including the concept of EWP in their article on International Tax Planning. On this Wikipedia page, the six principles of EWP are explained.

EWP is defined as:

“An element of international taxation created to implement directives from several tax authorities following the 2008 worldwide recession.”

The six principles of EWP are: privacy, asset protection, tax shield, succession planning, compliance simplifier, and trust substitute.

The Wikipedia article goes on to say,

“EWP allows a tax paying entity to simplify its existing structures and minimize reporting obligations under the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS). These international assets can also comply with tax authorities worldwide.”

We are taking a cue from Wikipedia. Our white paper features the six principles of EWP. EWP has the six principles that matter most to wealthy families throughout the world today—no matter where they are located. They are the building blocks of any successful asset structure.


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

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.

Electronic Privacy?

Andrew Grove, co-founder and former CEO of Intel Corporation, expressed this thought:

“Privacy is one of the biggest problems in this new electronic age. At the heart of the Internet culture is a force that wants to find out everything about you. And once it has found out everything about you and two hundred million others, that’s a very valuable asset, and people will be tempted to trade and do commerce with that asset. This wasn’t the information that people were thinking of when they called this the information age.”

EWP has the six principles that matter most to wealthy families throughout the world today–no matter where they are located. They are the building blocks of any successful asset structure.

The ancient Greeks called man, “a political animal.” In today’s world almost all so-called facts are politicized. It is no different with privacy. Certain groups consider the journalistic authors of the Panama Papers and the Paradise Papers heroes of a free press. Others say that these same journalists were thieves, who unlawfully stole private financial data. Whatever your opinion, these events did happen, and the targets were most decidedly wealthy families throughout the world.

How does the privacy afforded by an EWP Structure protect the families whose financial information was published for the entire world to see?

The privacy principle of EWP accomplishes its objective in several key ways:

  • Upon transfer into an EWP Structure, the asset is retitled into the name of the beneficial owner of the asset, similar to retitling property in a Limited Liability Company (LLC) structure.
  • If there is reporting to a tax authority for the EWP Structure, only one number is reported. This is the value of all the assets in the EWP Structure. The individual assets are not reported.
  • The bank account that is usually opened in connection with an EWP Structure is opened in the name of the new beneficial owner of the assets and not the policyowner. The policyowner has full access to the funds in the bank account in accordance with the assets inside the policy.

Asset Protection

Our asset protection model is called The EWP Da Vinci Code. Our model is highly effective, yet conservative, and offers more asset protection than the recently invented options available to wealthy families. In today’s world of financial transparency, there is no hiding of financial assets. The EWP Da Vinci Code brings you peace of mind through a long-established and secure financial structure.

Why bring Leonardo da Vince into this discussion? Because Leonardo said,

“Simplicity is ultimate sophistication.”

We have taken this as our model in implementing EWP Structures. We invite you to do the same.

When you purchase an automobile, you do not ask if it has turn signals. Of course, this is a standard part of the vehicle. Today you may pay extra for an enhanced audio package, but you might be able to do without it. Asset protection does not come as an extra feature with EWP Structures, it is part of the package, just like turn signals on a new vehicle.

The EWP Da Vinci Code Realized

Most asset protection trusts established by U.S. settlors are considered grantor trusts under U.S. income tax law, meaning that all income of the trust is reportable on the grantor’s (the settlor’s) individual income tax return. Asset protection trusts do not, in and of themselves, offer any tax advantages under U.S. income tax law.

So why not create a structure that not only gives you asset protection, but the whole formidable array of benefits that EWP provides? For wealthy families, in particular those families with a connection to the U.S., an EWP Structure is arguably the most efficient structure for the integration of tax-free investment growth and asset protection.

Tax Shield

Savvy, wealthy families today are employing EWP Structures in greater and greater numbers. A hallmark of the popularity of this asset structure is its conservative and straightforward nature. This ironically allows it to achieve spectacular tax savings.

Why strain to invent a structure that will very likely draw the attention of tax authorities, because of its convoluted and aggressive design? We counsel you to stop trying to be overly clever in the design of your asset structures. Why not use a financial structure that has been used successfully to structure hundreds of billions of dollars in assets for wealthy families throughout the world. This will give you the best tax shield available today bar none.

Who Pays the Most Tax Today in the U.S.?

The most recent IRS data, from 2016, shows that the top 10 percent of income earners pay almost 70 percent of federal income taxes.

Looking at all federal taxes, the Congressional Budget Office shows that the top 1 percent pay an average federal tax rate of 33.3 percent. The data show tax rates decline with income, and the poorest 20 percent of the population pays an average tax rate of just 1.7 percent.

EWP Structure Benefits with Real Estate Investing

The benefits of using an EWP Structure for U.S. persons investing in real estate in the U.S. are substantial. For the Non-U.S. person it is even more important to employ an EWP Structure, as there are formidable obstacles faced by non-U.S. persons investing in U.S. real estate.

The primary tax impediments to foreign investment in U.S. real estate in general and in real estate funds specifically are U.S. income, capital gains and withholding taxes (30%), and even U.S. estate taxes. An EWP Structure is a well-established tax and estate planning tool that many qualified investors utilize to mitigate and manage these exposures.

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. An EWP Structure executed outside the home country of the owner or policyholder is a method to mitigate these forced heirship rules.

Since an EWP Structure 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 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 an EWP Structure, as well as all the other elements of a wealth owner’s financial and legal planning.

International families can eliminate the vagaries of court decisions which hinge on details of the law like inter vivos transfers versus testamentary transfers by using an EWP Structure. This will secure their own estate planning wishes using a legally binding contract with no need of court decisions in any jurisdiction.

The laws governing these contracts are written specifically to accommodate international wealthy families. These laws enhance not only succession planning, but provide excellent asset protection, privacy, and tax efficiency.

by Michael Malloy, CLU TEP RFC, @ Advanced Financial Solutions, Inc

Michael Malloy-CLU-TEP