Privacy is important. Your financial affairs are your business. And you are leaving more footprints than you realize. This came up in a phone conversation with another lawyer today. We’re doing some remedial privacy work–putting the toothpaste back in the tube. It is possible, but expensive.
When you consider your own asset privacy (“Who knows about this account?”) consider the people who touch it. From high to low: Senior Vice Presidents to file clerks. Then consider that people change jobs. Frequently. And in their heads they carry knowledge of your situation. Over 10 or 20 years and there will be dozens of people, completely unknown to you, who will know about your assets.
I’m not talking about secrecy here — the “how will they ever find out?” theory of tax planning. That’s for morons, frankly. As unpleasant as taxation can become, it is cheaper to pay the taxes. Don’t make a money problem into a jail problem. I’m talking about the simple prudence of asset protection at the extreme end, and “Don’t bother me with sales pitches” at the mundane end. And for some of my clients, asset protection means “I remain alive.”
People don’t need to know about you and your money. The more people that know stuff and the longer that a particular asset holding structure has been in place, the more likely you are to experience privacy failure.
Memo to all personnel: confidentiality is good. Only a few people should know. You should trust those people. And you should change your structures periodically and carefully.
Philip D. W. Hodgen is the principal attorney of HodgenLaw PC, an international tax law firm based in Pasadena, California. He earned his undergraduate degree from Claremont McKenna College and his law degree from the School of Law at the University of California, Los Angeles. He then went on to earn a Master of Laws degree with a specialty in taxation from the University of San Diego School of Law. Admitted to the California bar in 1982, Phil spent nine years in law firms and with a large U.S. bank before starting his own firm in 1991.
Phil is a past chair of the International Tax Committee of the State Bar of California's Tax Section and was a member of the Executive Committee of the State Bar of California's Tax Section for 2004-2007. Phil frequently speaks on a variety of international tax, trust and estate topics to attorneys, accountants, and real estate professionals.
Greg Swann has added me to the list of contributors to Bloodhoundblog.com, THE most interesting website I’ve found about the business of being in the real estate business. Here’s Greg’s introductory post about me. He has my first post in the pipeline and it will be coming online whenever it comes online. Thanks, Greg.
Ninety percent of what we do has “international tax” in it. That’s who we are. Via Vinnie Mirchandani and Dennis Howlett, I learned today about John Hagel’s analysis of supplier networks in Chinese manufacturing. This is a great 4 minute video. Thanks, guys. This largely explains a great deal to me why it is that…
Note: this is another answer for the accountants who took my all-day courses in Pleasanton in January. The “Net Election” is an election by a nonresident of the United States who owns U.S. real estate. This is an almost mandatory election for a nonresident investor. The default U.S. income tax paid by a nonresident on…
I’m adding a new category of posts to the site. This category will contain brief descriptions of recent interesting projects we’ve worked on. Interesting to all of us, at least. And usually interesting to our clients–by definition when we’re solving problems we’re minimizing the tax man’s bite.
I like Hacker News. Let’s just say that I spend too much time there. Shout-out to Ronnie Roller and his iHackernews site, because mostly I look at HN on my iPhone. I lurk mostly, and comment infrequently. It’s recreational for me. I am username = philiphodgen there, FWIW. I got an email overnight from a…
This is another in my periodic posts for young tax lawyers. These are things that I was taught or learned by trial and error. I hope they are useful to young tax practitioners. If you want to be a tax lawyer, you need to think in logic chains. If A, then B. B, therefore C….
Tax laws change over time, and the information in this post above may be less accurate today than it was at the time of the last revision. This post is not tax advice for your specific situation. Please contact an international tax professional to get personalized advice for your situation.