Foreign Wealth Sees Trump Presidency as Opportunity

There has been a global revolution in financial transparency thanks largely to a U.S.-led war on tax dodgers. Financial institutions abroad are soon going to be required to report the details on their American clients’ accounts due to The Foreign Account Tax Compliance Act (FATCA). In order to comply with FATCA, countries all over the world came up with the “Common Reporting Standards” (CRS), which is an agreement among countries to share information on residents’ assets and incomes automatically.

The ironic thing is that the U.S. has not signed onto the new CRS standards, making it a sudden haven for the nearly 50 countries, including Switzerland, that will soon start using the CRS. Because these standards will be fully implemented by the beginning of 2018, foreign persons are suddenly swarming to U.S. financial institutions.

It’s not always about people trying to avoid taxation from their home country, but many times these foreign persons are domesticating their wealth for legitimate concerns of privacy — for example, wealthy individuals in many countries fear extortion or kidnapping if their wealth is known.

Many foreign persons want to domesticate some portion of their wealth to benefit their children or grandchildren who many have immigrated to the U.S. and have family members here. The U.S. has always been viewed as a safe haven for foreigners seeking a stable currency, legal system, and the best universities in the world. CRS has only accelerated this trend, and it has been a recent boon to U.S. financial institutions, including insurers, banks, and trust companies.

One of the strongest financial products that foreigners are buying is life insurance. Insurers that can underwrite these wealthy foreign individuals will often find them looking to purchase large policies to benefit their American children and families.

Therefore, foreigners are buying life insurance policies to bring wealth to the U.S. for their families in addition to the unique tax and estate planning environment created by the CRS. This is relevant to President Trump in that considering his "America First" position, he is unlikely to have the U.S. sign on to CRS because he wouldn’t want to cede the advantage U.S. institutions have now under CRS.

If you are a foreigner with U.S. ties, it would be wise to meet with your advisors as these opportunities may be gone by the end of the year.

Richard S. Bernstein, CEO of Richard S. Bernstein & Associates, Inc., West Palm Beach, is an insurance advisor for high net worth business leaders, families, businesses, municipalities, and charitable organizations. An insurance advisor to many of America’s wealthiest families, he is a writer, trusted local and national media resource and expert speaker on estate planning and health insurance. Visit his website at www.rbernstein.com. To read more of his reports — Click Here Now.