Taxes, Crypto and PPLI

Taxes, Cryptocurrency and Private Placement Life Insurance

Taxes, Crypto and PPLI

Cryptocurrency is a trending topic and many wealthy individuals find it as a solution for investment gains. We will discuss in this article if Cryptocurrency can be used in conjunction with PPLI for tax savings and to obtain other financial benefits.

We, at EWP Financial, customize solutions using mainly Expanded Worldwide Planning, (EWP) and Private Placement Life Insurance (“PPLI”) to meet the complex needs of our clients. 

PPLI is a versatile type of insurance policy used by super wealthy individuals, sometimes termed a unit-linked policy. The premium can be paid in cash or with a portfolio of bankable assets, but it is also possible to pay with non-traditional asset classes such as art, precious metals or cryptocurrency.

It’s worth noting that even where cryptocurrencies are considered bankable assets, the acceptance and valuation may be subject to certain conditions and requirements. Banks and lenders may have specific criteria, such as the type of cryptocurrency accepted, the liquidity and stability of the market, and the value of the cryptocurrency relative to the loan amount. EWP Financial can advise if you can use cryptocurrency as a bankable asset depending on your particular situation.

What is the role of PPLI?

It’s called Private Placement because each contract is issued under its own private placement memorandum – the policyholder’s assets are segregated from other policyholder’s assets under the same insurance carrier.

Whilst the legal ownership of the assets passes to the insurance carrier, the policyholder retains at all time full rights to request a partial or full surrender of the policy, and change the beneficiaries.  

Why is it difficult to place crypto assets into custody? And why is structuring these assets into a PPLI an effective solution for this?

Cryptocurrencies are not financial assets but an asset class on its own. They also lack physical substance. Therefore, they meet the definition of an intangible asset and would be recorded at acquisition cost (i.e. price paid or consideration given).

Cryptocurrencies are designed to work as a decentralized medium of exchange, independent of a financial institution or any other central authority, so the custody is not with a traditional arrangement of a banking institution but held by a token or key with the key holder having secure access via private passwords or biometric authentication systems.

The difficulty for a cryptocurrency (and other digital assets) is that after the keyholder’s lifetime, if the assets have not been the subject of an inventory with regular updates, then it is very difficult for the executor to identify the deceased’s entire exposure to these digital assets.

Digital assets can be entrusted to professional trustees inter vivos, so that the problem linked to the devolution of the keyholder’s credential is solved. However, many trustees have difficulty custodising such assets due to the associated risks, directly or indirectly that they represent.

By using a PPLI policy to structure the digital assets and appoint the trustee as policyholder, these risks can be mitigated. In addition, the trust can also be the beneficiary of the policy to ensure estate planning over many generations.

What are the tax benefits of holding crypto within a PPLI?

Once the assets are placed within the PPLI, such assets enjoy growth free from income and capital gains tax (as long as there is no partial or full surrender), thus the policy benefits from the gross roll-up effect.

This is especially relevant for cryptocurrencies which are subject to high returns (and lows!). Unstructured cryptocurrencies could be subject to tax on an arising basis in countries like Australia, France, India, Singapore and USA.

“Once your assets are placed into a properly designed EWP Asset Structure, they are shielded from taxation, while simultaneously achieving maximum privacy and asset protection.”  – Michael Malloy CLU TEP RFC

 

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP
Michael Malloy CLU TEP RFC

 

 

 

 

 

 

 

 

EWP Financial and Partner Companies

About EWP Financial and Its Team

EWP Financial and its partner sites

In this blog post, we will talk about Michael Malloy, EWP Financial, its predecessor companies, its main team, Private Placement Life Insurance (PPLI), and Expanded Worldwide Planning (EWP). Let’s get started.

About Michael Malloy:

Michael Malloy, the founding partner of EWP Financial, began his career over 40 years ago as a risk management consultant. He has published the Life Insurance Law Newsletter and written two books on Private Placement Life Insurance (PPLI): “The PPLI Papers” and “The Wit and Wisdom of Professor PPLI.” He manages several companies and websites, including Malloy Insurance Services, Advanced Financial Solutions Inc., Michael Malloy Solutions, and EWP Financial.

“We take intentional care of wealthy families all over the world.” – Michael Malloy

Michael Malloy is a Charter Life Underwriter (CLU), Trust and Estate Practitioner (TEP), and Registered Financial Consultant (RFC).

About EWP Financial and its Predecessor Companies Working Together

Some of these names will be familiar to you: Malloy Insurance Services, Advanced Financial Solutions Inc., Expanded Worldwide Planning, Michael Malloy Solutions, and EWP Financial.

EWP Financial (ewp-financial.com), Michael Malloy Solutions (michaelmalloy.solutions), and Expanded Worldwide Planning (expandedworldwideplanning.com) have been on the internet for several years.

These companies serve as parent companies to oversee various operations under the supervision of Michael Malloy.

Malloy Insurance Services (MIS) was founded in 1985 and provides commercial and personal insurance. MIS specializes in the placement of difficult and complex insurance risks.

For example, MIS has had a liability policy in place for over 30 years for a non-profit corporation. This organization has established over 100 branches in 64 sovereign nations throughout the world.

The roots of Advanced Financial Solutions Inc., based in New York, reach back over 30 years. Its mission addresses the current paradox of striving to achieve full compliance in tax transparency while also providing clients with both privacy and tax savings.

AFS is the original corporate entity that promotes Private Placement Life Insurance (PPLI), which provides wealthy families with the maximum amount of privacy, asset protection, and tax efficiency.

Michael Malloy Solutions provides a clear, unified voice for all our entities to educate wealthy families and professional advisors on how to enhance privacy and gain the maximum amount of asset protection and tax efficiency while staying compliant with tax authorities worldwide.

EWP Financial is our latest development, a specialized company that offers services in Private Placement Life Insurance (PPLI) and Expanded Worldwide Planning (EWP). PPLI is a type of life insurance designed for high net worth individuals, providing customized investment solutions and tax-efficient planning. EWP is a unique approach to financial planning that takes into account the complexities of cross-border investment and taxation, helping clients achieve their global wealth management goals. With a team of experienced professionals and a commitment to personalized service, EWP Financial is dedicated to helping clients achieve their financial objectives with confidence and peace of mind. There are offices in New York, the British Virgin Islands, and California, ready to answer your questions.

About Our Team

Our Regional Representatives are highly experienced and knowledgeable in the financial industry, and they have a deep understanding of the local market and cultural nuances of their respective regions. They are committed to providing our clients with tailored financial solutions that meet their unique needs and requirements.

Here, you can get a glimpse of the main team members who work together to provide you with the best financial solutions to help you achieve your goals.

Please Contac Us for any questions you may have.

Thank you.

 

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP
Michael Malloy CLU TEP RFC

 

PPLI & EWP Basics – EWP and PPLI: A Unity of Assets and Life Insurance – Video 4

Did You Know This About PPLI & EWP? – Episode 4 – Life Insurance: The Magic Ingredient

Private Placement Life Insurance (PPLI) In Action

#EWP and #PPLI: A Unity of Assets and Life Insurance

A PPLI asset structure is arguably the most efficient structure available today for wealthy families who wish a conservative and efficient structure to integrate tax-free investment growth, wealth transfer, and asset protection.

READ FULL BLOG POST WITH DETAILS

 

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP
Michael Malloy CLU TEP RFC

 

 

 

 

 

 

 

 

 

 

The Metaverse – EWP and PPLI – Video 3

The Metaverse Video Series

The Metaverse Video 3

Transform Your Assets Inside an EWP Metaverse

PPLI Is Your Partner in Creating Financial Strength and Stability

 

The metaverse is a concept that has been thrust into our lives. Is it something new and or just a fad that will die out in a few years? At EWP Financial we are creating our own metaverse that has at its foundation the rock-solid Six Principles of EWP. In this video, through compelling images and concise dialogue, we explain how these Six Principles can create for you a financial future that beneficially transforms your own assets for tax efficiency, privacy, and asset protection.

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

 

 

 

The Expanded Worldwide Planning Stories Video Series – Part 3 – Episode 3 – Tax Shield 3

Tax Shield 3 – Episode 3 – Part 3 – The EWP Stories Video Series

International Tax Planning

Intro

Welcome. For real estate investors, there are very substantial benefits to using an asset structure that embodies the principles of Expanded Worldwide Planning, or EWP for short. This is true for U.S. persons and non-U.S. persons alike. A properly designed EWP structure both eliminates tax on rental income and tax on the sale of real estate. This is a very powerful result.

Our video details the disreputable methods used by Conservation for Nature’s appraiser, Jay Edwards. Jay’s inflated appraisals give investors unwarranted tax deductions, while the pressure to achieve these inflated appraisals exact an unhealthy influence on Jay’s life in the form of his increased consumption of alcohol and cigarettes. Jay also finds himself in trouble with the Department of Justice and the Tennessee state real estate appraiser board.

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

 

 

 

 

 

 

 

 

 

 

An EWP Asset Structure – PPLI and Crypto – Video 3

Cryptocurrency, Private Placement Life Insurance and Expanded Worldwide Planning

Episode 3

Over the years the most sophisticated clients of EWP Financial have asked three important questions:

Is it legal?

Can they steal my money?

Will I be audited?

This video answers these three important questions. It is our hope that the answers to these questions will give you the assurance you need to place your own holdings into this simple, straightforward, and very powerful asset structure, an EWP Asset Structure.

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

The Expanded Worldwide Planning Stories Video Series – Part 3 – Episode 2 – Tax Shield 2

Video 2-Tax Shield

Go to Episode 1

Introduction

Welcome. Oddly enough many of the tax benefits used in the sophisticated designs of Expanded Worldwide Planning, or EWP for short, are common to most life insurance policies. These tax benefits are:

  • Tax-deferred growth of the cash value
  • No capital gains tax
  • No income tax
  • The ability to access the cash value through tax-free loans, and
  • A tax-free death benefit

In this video we meet Jack Newcastle, an attorney at the IRS. Jack is in the midst of auditing the very company that George Allbright is considering for his conservation easement. Jack’s nickname is ‘Jack the Shark.’ We learn how he earned this nickname, and why he has his current position at the IRS.

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Our Conclusion

Our next video, reveals how Conservation for Nature achieves their inflated tax deductions. You will find out the very person who is most responsible for these inflated deductions, Jay Edwards. Jay is being pushed for larger and larger tax deductions at the cost of both his career and his health.

If you found this video useful, please give us a Like, and click on the Subscribe button below. We look forward to connecting with you in Part Three of our Tax Shield story.

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 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.

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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.

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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.

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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

 

 

 

 

 

 

 

 

 

 

Expanded Worldwide Planning Stories-3

EWP Stories-Part 3-Tax Shield

Expanded Worldwide Planning
International Tax Planning

Stories
Part 3: Tax Shield

EWP adds tax deferral, income, 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.

The best comment made about the tax benefits of PPLI is from the October 1994 article in Offshore Investment by Professor Craig Hampton:

“I was visiting a gentleman at his home in the Piccadilly district of London. It was explained to me that his net worth exceeded $100 millionU.S. by a substantial margin. I noticed the presence of a computer terminal on a large desk in his den. It was surrounded by reams of paper dealing with offshore investing.

It soon became apparent that his affluence was due to his own efforts when he said to me:

“You’re a bright young man who obviously knows his craft. But what can you tell me that I don’t already know about finances?”

I leaned forward and made this simple statement:

“Through the creative use of international life insurance, your financial affairs can be arranged so that you will never have to pay income taxes for the rest of your life!” The gentleman took serious notice, and thus was born the Hampton Freeze.”

The Hampton Freeze is the name coined for the various PPLI designs developed by Professor Craig Hampton in the early 1990s. These designs were utilized in cases where the premium was over $100M, but can also be employed for PPLI policies with lesser amounts of premium.

Oddly enough many of the tax benefits used for the sophisticated designs like the Hampton Freeze utilize the same tax benefits common to all life insurance policies.

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by Michael Malloy, CLU TEP RFC.

CEO, Founder @EWP Financial

Michael Malloy-CLU-TEP