You Want To Be Private...But Not Too Private
A banker friend in Belize who speaks at many of the conferences my wife Kathleen Peddicord’s publishing group sponsors likes to ask the following question as part of his presentations:
“What happens to your bank account (in Belize) if you and your banker, and only you and your banker, know about its existence…and you die?”
If you’re an American, that shouldn’t be a possibility. If you’re an American with a bank account in Belize, you are obliged by U.S. law to report the existence of that account to the IRS if it contains US$10,000 or more during any tax year. (You do this by listing the account on your annual FBAR form.)
But let’s put that aside.
Managing Legacy In Belize
What if you have this account in Belize, and no one but you and your banker at the bank in Belize know that it exists? And you die.
In that case, the account would remain active until someone came along to claim it. That’s the law in Belize. The government can’t confiscate the account, not ever. Not after a year or 10 years or even 100 years. So, 100 years later, if someone somehow finds out about the account and shows up at the bank in Belize able to prove that he is your descendent, the account and the money you had in it are his.
While the fact that the government can never confiscate the contents of a bank account, no matter how long it lays dormant, is one benefit of banking in Belize, the question highlights a bigger issue. As you structure your offshore life with the intent to protect your assets, you need to build in an exit strategy. That is, you need a contingency plan that can be put into effect should something happen to you. And, eventually, something is going to happen to all of us.
Most people have their attorneys keep copies of their wills and other documents. Seems simple and straightforward, but what if no one else knows the name of your attorney or how to contact him. Or maybe you have several attorneys in different countries managing different aspects of your life, but your heirs know about only one of them. It’s akin to having a bank account in Belize that no one but your banker knows about. It’s the only way to guarantee complete privacy, but it’s also a risk.
The solution could be as simple as telling your parents and/or your children the name and contact details of a central attorney and then making sure that attorney has knowledge of and access to all documents and information related to the location of all your assets. Or you could keep a list of bank accounts and assets in a safe somewhere and tell your kids how to get to it if they need to.
Even with just a few assets offshore, organization is the key. Assuming you care that your heirs are able to access their inheritance, you’ll need to keep track of everything in a way they can access.
An apartment in Buenos Aires, a bank account in Belize, and an investment account in Europe is a straightforward plan, the kind of plan you should aspire to. But your heirs won’t have a clue how to reap the benefits of any of it when you’re not around…unless you inform and educate them in advance.
“Lief, I just opened an account at Banistmo Bank in Boquete. They accepted my bank’s reference letter that was addressed to me. I didn’t think they would, but they did. They required my passport and a second photo ID. They asked for a local reference asking for a name and a telephone number but no reference letter required. After that, they asked for my monthly income (no receipts required) and where I last worked (I’m retired and no longer work).
“To open an account, a minimum US$300 deposit for a checking account and US$60 deposit for a savings account is required. That’s it.
“This is a snap compared to other banks I have talked to.”
C.W., Panama Circle Member