Tag: Trusts

PPLI Will Take You Home

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Private Placement Life Insurance (PPLI) is a refuge in today’s stormy sea of compliance and tax regulations. When we are distraught and confused our home becomes a safe haven. This is exactly what PPLI does for the assets of wealthy international families.

The rarity of an item tends to give it value. When this item becomes the subject of theft, it can produce more interest, and, even, greater interest if the item is later recovered. This was the case recently with the ruby slippers in the American musical, fantasy film The Wizard of Oz. In the film the ruby slippers have the magically property of taking you Home.

Let us first explore how PPLI creates a safe haven for the assets of wealthy international families. This is best done by diving into the stormy sea of compliance and tax regulations. One understands a subject by the way it is framed. In this case we are speaking about intellectually framing. Let me explain further.

When we wish to go into more depth about a subject, we must first choose a source. How this source of our new knowledge presents the topic becomes part of our new understanding of the topic. This is what I mean by intellectual framing.

Politics gives us a clear example. When we read about a political event from one news source, and, then, read about the event from another news source that has a very different political perspective the two stories can sound very different indeed.

Filippo Noseda of the Mischon de Reya law firm in London is an attorney who is active in privacy issues for wealthy international families. In Trusts & Trustees, “CRS and beneficial ownership registers—what serious newspapers and tabloids have in common,” we think his framing of the privacy vs. transparent issue is excellent. We will express his viewpoint in excerpts from the article.

“The European Data Protection Supervisor (EDPS) published a damning opinion in which he decried the unclear objectives pursued by the AMLDs and, more generally, the invasive nature and lack of proportionality of the proposed registers.”

“As if they were living on planet Europa rather than in Europe, the European Parliament, the Organisation for Economic Co-operation and Development (OECD) and politicians show complete disregard for the warnings raised by their own data protection bodies and instead appear hell-bent on introducing a system of total transparency.”

“Data protection has moved to the forefront of people’s minds, prompting the EU to overhaul the existing data protection rules and has also led to a number of ground-breaking decisions by the European Court of Justice which confirms that the pendulum has started to swing back towards greater protection of privacy and data protection.”

“It is somewhat curious that serious newspapers who have been covering both the private banking scandals and the erosion of privacy seem unable to make the connection between data protection on the one hand, and the CRS and beneficial ownership registers on the other.”

In structuring assets for wealthy international families, the insurance company of the PPLI policy becomes the beneficial owner of the policy’s assets. This structure gives compliance simplification, as what is reported to tax authorities is the total of the assets inside the PPLI, and not the individual assets inside the policy.  At the death of the insured life in the PPLI policy, the assets pass as a tax-free death benefit to the beneficiaries.

Let us return to The Wizard of Oz and the ruby slippers. These magic, ruby, slippers had the property to take you Home once you clicked your heals together three times.  The slippers were stolen thirteen years ago from the Judy Garland Museum in Grand Rapids, Minnesota.  They were recently recovered by the FBI and returned to the Museum.  Of course, this publicity gave the slippers added value, and increased their rarity as something unique.

With PPLI you don’t need the ruby slippers to take you Home. You gain protection from the stormy seas of tax compliance by having your assets inside a PPLI policy, so you are Home from the beginning. You also won’t have your assets taxed, since they are inside a tax-free environment.

We invite your participation in our quest to take you Home to a truly unique structuring tool that has rarity and value. Please write your thoughts and questions at the bottom of the page. If you want to communicate privately with me don’t hesitate to drop me a line: michael@michaelmalloy.solutions

Thank you.

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

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