Isolating Financial Accounts

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Lets discuss isolation of financial accounts. This topic could potentially span several individual subtopics and several of these ideas fall under Asset Protection
Several concepts may potentially fall under the category of FRAUD if misused. Some ideas are presented for academic purposes only. Some ideas may be fully lawful but be unethical.

EDIT: I didnt mean to steal SIS ideas - just compiling ideas I have read over the last year and too lazy to find actual sources. I editted the ideas with some links that SIS provided to his posts on the subject. Enjoy!

Reasons for Isolating Financial Accounts
1) Hide assets from potential frivelous lawsuits - if you have no money its less likely a potential lawsuit will even begin against you
2) Hide assets from potential gold-digging relationship = if you appear to have no money its less likely someone will lie to get you to marry them for your money
3) Hide assets from potential divorce - if you are able to hide assets during the marriage, its less likely your partner will divorce you for half
4) Qualify for better assistance programs - FAFSA, Foodstamps, subsidized graduate school loans, etc
5) Minimize losses in potential identity theft
6) Minimize damage from aggressive institutions - i.e. paypal doing a chargeback and bouncing your mortgage

Techniques for Isolating Financial Accounts

1) Do not Link all your accounts. Keep paypal attached to one checking account that you only use for paypal. You dont want someone doing a reversal on you 3 months after you sell something to them on eBay and bouncing your mortgage check. Preferably attach a checking account with "free" overdraft protection such as Penfed or USAA where you wont get hit with a $39 overdraft fee for one day of interest.

2) Do not keep credit and savings accounts at the same institution. If you have Chase credit cards that you use, dont keep your savings there.

3) Keep some assets under trusts/LLCs/Corps. Pay your taxes! But keep them separate. This is a separate thread of its own.

4) Do not keep a large portion of assets in one institution. It would be terrible if Bank of America went under and 90% of your savings accounts were there. Sure the FDIC should kick in a few days but what if it takes a week or more? And you have AOR/BT money due that was sitting in the account that went under. Personally I dont want more than 30% of my overall assets at any single institution.

5) Isolate through FOREX/Precious Metals. It would be unreasonable and paranoid to go 90% gold coins but it would be reasonable to keep 5% to 10% of assets in gold coins as both an inflation hedge isolating you from the USD as well as counterparty risk isolation by physically controlling the coins. Not that you are going to be buying groceries with 1 ounce krugerrands but you would still have money set aside. If your plans include going to Europe or Mexico during a local crisis, it would be reasonable to keep 5 to 10% of your savings in a FOREX like Euros.

6) Isolate through overseas accounts. PAY YOUR TAXES! Any accounts over $10k that are overseas need to be reported even if theres no income. However if a massive US banking financial system occured, it would be reasonable to keep 5% to 10% of your money in a Swiss/Panama/Other bank. You need greater than $200k in assets to reasonable keep 5% overseas. Interest rates overseas are lower than the US and do not have FDIC protection so keeping more than 10% overseas might be unwise.

7) Isolate through different addresses. Keep one checking account/savings account/debit card under an address that isnt on your credit report. A PO Box - after you open the account you can change it to this - or a mail rental box, or a relatives house. The idea is that if your main address gets compromised, they wont get everything. This might occur if you go on vacation and someone steals 2 weeks worth of your mail. An offshoot of this is to add a different email address that you dont normally use. Create a new free gmail or yahoo account that you dont keep saved on your computer in case that is compromised. Keep one month worth of expenses at this isolated account.

8) Isolate locations of your banks used. This is likely overly paranoid but I once read a suggestion to ensure that if you carry 2 credit cards, try to have one based in a bank on the east coast and another based on the west coast. There was several hours where the internet infrastructure in the midwest went down and certain banks were unable to process CC transactions. Its theoretically possible that this might be helpful, perhaps if theres a natural disaster or maybe the hamsters running one banks servers die unexpectantly.

Member Summary
Most Recent Posts
You can easily accumulate well over $10K over a period of time, just like you're accumulating any other form of savings.... (more)

ilikebtmoney (Feb. 12, 2009 @ 10:39a) |

But how are you going to store or move it? Are you keeping records of where the money came from and that you paid taxes... (more)

tripleB (Feb. 12, 2009 @ 10:52a) |

I'd prefer not to go into details of how *I* store or move it, but again.. just think about it for a few minutes and you... (more)

ilikebtmoney (Feb. 12, 2009 @ 11:04a) |

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Excellent thread. Thanks

From what site did you plagiarize this?

donotdrinkPBR said: From what site did you plagiarize this?

Its my own original idea for a thread based on info I have gathered from various posts on FWF, Bogleheads, Credit Boards and my own creative thoughts. If you find it hard to believe then realize that I generate so many useless threads that statistically speaking 1 in 1000 will strike gold.


tripleB said: 2) Do not keep credit and savings accounts at the same institution. If you have Chase credit cards that you use, dont keep your savings there. Why? I have so many financial accounts (mainly because of A.O.R.'s) that I usually have both at each bank. The two departments, credit and deposit, seem to be pretty separate usually. I've never had any problems.

RisingSun96815 said: tripleB said: 2) Do not keep credit and savings accounts at the same institution. If you have Chase credit cards that you use, dont keep your savings there. Why? I have so many financial accounts (mainly because of A.O.R.'s) that I usually have both at each bank. The two departments, credit and deposit, seem to be pretty separate usually. I've never had any problems.

1) If any problem occurs where you default or CC gets fraudulently used and you arent paying attention - theres a chance the company might take your savings to pay off the credit you owe them.

2) If someone wants to see how much money you have to sue you, its very easy to run a credit report and see what banks you have a relationship with. If your savings are at the same banks now they know where to look. If your money is in places that are no where on your credit report, its going to be much more difficult for someone to find them.

tripleB said: ... I generate so many useless threads that statistically speaking 1 in 1000 will strike gold.

QFT!!!

*That's 1... lol! Can you skip the next 990 or so, and do something useful?

most of this is pretty low probability stuff. Like the nutjobs in Idaho who stock up with canned food and guns waiting for the black helicopters to come. Just put as much money as possible into retirement accounts which are generally protected from lawsuits.

RisingSun96815 said: tripleB said: 2) Do not keep credit and savings accounts at the same institution. If you have Chase credit cards that you use, dont keep your savings there. Why? I have so many financial accounts (mainly because of A.O.R.'s) that I usually have both at each bank. The two departments, credit and deposit, seem to be pretty separate usually. I've never had any problems.

This is why

How can you keep money from showing up on your credit reports? I am in an ongoing mess with CapitalOne Bank. They removed money (they say) via ACH from someone else's account and put it into another bank account in my name. They have since frozen my CapitalOne accounts and without my permission OTP called other banks to find out balances etc.. Would love to know. Thanks.

tripleB said: 1) If any problem occurs where you default or CC gets fraudulently used and you arent paying attention - theres a chance the company might take your savings to pay off the credit you owe them.Could they actually make a withdraw from my deposit account without my authorization (other than fees)? That sounds illegal.

The list in the OP sounds like a "best of SIS" thread complilation....
1) Hide assets from potential frivelous lawsuits -
http://www.fatwallet.com/forums/arcmessageview.php?catid=52&thre...

3) Hide assets from potential divorce -
http://www.fatwallet.com/forums/arcmessageview.php?catid=52&thre...

5) Minimize losses in potential identity theft
http://www.fatwallet.com/forums/arcmessageview.php?catid=52&thre...

2) Do not keep credit and savings accounts at the same institution.
http://www.fatwallet.com/forums/arcmessageview.php?catid=52&thre...


4) Do not keep a large portion of assets in one institution. http://www.fatwallet.com/forums/arcmessageview.php?catid=52&thre...


6) Isolate through overseas accounts.
http://www.fatwallet.com/forums/arcmessageview.php?catid=52&thre...

SUCKISSTAPLES said: 6) Isolate through overseas accounts.
http://www.fatwallet.com/forums/arcmessageview.php?catid=52&thre...
From what I've read in the WSJ lately, the IRS is really pursuing U.S. citizens for back taxes who have had large deposits at UBS--and UBS is handing over long lists of customer names. Maybe we should start a new thread on the topic.

RisingSun96815 said: tripleB said: 1) If any problem occurs where you default or CC gets fraudulently used and you arent paying attention - theres a chance the company might take your savings to pay off the credit you owe them.Could they actually make a withdraw from my deposit account without my authorization (other than fees)? That sounds illegal.

They can do this, in limited cases. The Right of Offset allows them to take money from deposit accounts to pay loans, but not consumer credit cards.

SUCKISSTAPLES said: The list in the OP sounds like a "best of SIS" thread complilation....
1) Hide assets from potential frivelous lawsuits -
http://www.fatwallet.com/forums/arcmessageview.php?catid=52&thre...

3) Hide assets from potential divorce -
http://www.fatwallet.com/forums/arcmessageview.php?catid=52&thre...

5) Minimize losses in potential identity theft
http://www.fatwallet.com/forums/arcmessageview.php?catid=52&thre...

2) Do not keep credit and savings accounts at the same institution.
http://www.fatwallet.com/forums/arcmessageview.php?catid=52&thre...


4) Do not keep a large portion of assets in one institution. http://www.fatwallet.com/forums/arcmessageview.php?catid=52&thre...


6) Isolate through overseas accounts.
http://www.fatwallet.com/forums/arcmessageview.php?catid=52&thre...
Precisely what I inferred above . . . sigh. He should at least cite his source!

tripleB said: Sure the FDIC should kick in a few days but what if it takes a week or more?
...
However if a massive US banking financial system occured, it would be reasonable to keep 5% to 10% of your money in a Swiss/Panama/Other bank.


FDIC swings in immediately. They close the bank on a Friday night, and everybody's deposits are there on Monday morning. Checks, ACH, and debit card transactions are routed normally. If you're above the insured limits, sometimes you have instant access to some of that uninsured money and sometimes you don't.

If a massive failure of the US banking system occurs, I don't see how having money in an offshore account helps if you're in the USA. How do you get access to it if our banking system isn't working, and how could you convert offshore money into something valuable?

I think it's a good idea to have at least two places one could draw money from for reasons you mentioned (it is not unheard of for banks to have failures in their core systems) but some of these suggestions are perhaps too end of worldish to be worth thinking about.

Nice thread - thanks OP!

zmre2b9 said: Just put as much money as possible into retirement accounts which are generally protected from lawsuits.How generally ?

xoneinax said: zmre2b9 said: Just put as much money as possible into retirement accounts which are generally protected from lawsuits.How generally ?

Well he means that depending on the state and type of creditor going after your assets, retirement accounts usually protect you but not in all states and not against all creditors. YMMV.

Is there another thread that covers this one:

"3) Keep some assets under trusts/LLCs/Corps."

tripleB I never thought this day would come, but you get green from me.

pthor1231 said: RisingSun96815 said: Could they actually make a withdraw from my deposit account without my authorization (other than fees)? That sounds illegal.They can do this, in limited cases. The Right of Offset allows them to take money from deposit accounts to pay loans, but not consumer credit cards.Wow, thanks for letting me know. I'm surprised. Luckily, all I have right now are credit cards, although a few of them are biz cards; it sounds like the right of offset doesn't apply to them.

pthor1231 said: RisingSun96815 said: tripleB said: 1) If any problem occurs where you default or CC gets fraudulently used and you arent paying attention - theres a chance the company might take your savings to pay off the credit you owe them.Could they actually make a withdraw from my deposit account without my authorization (other than fees)? That sounds illegal.

They can do this, in limited cases. The Right of Offset allows them to take money from deposit accounts to pay loans, but not consumer credit cards.

I seem to recall seeing something about this in one of my recent T&C updates for a CC. I expect you may well have agreed to letting a bank use any funds you have with them to pay off/down a delinquent account when you agreed to the terms of the card.

slightly offtopic but someone involved in this thread may know

How do you find all banking and investment accounts for a given individual?
Scenario one - yourself
Scenario two - A spouse, is it legal for a spouse to find joint accounts and accounts those that belong to the other spouse?
Scenario Three - accounts for recently deceased and you are the estate executor

thanks All
sorry if this belongs somewhere else, i'll quickly delete or remove it)

jmackdaddy said: Is there another thread that covers this one:

"3) Keep some assets under trusts/LLCs/Corps."


I'd like to know this too...I remember reading a brief thing about this in the propery thread, but I don't think it went into any kind of discussion, Q&A, or advice from those who know the pitfalls, or direction. Although, I am not all through with that thread, yet. Since I'm unknowledgeable on this topic, this would be very good to know.

I've been considering this for my sole-proprietor biz, as well as in a short while handling some foreclosure purchases, if that works out. TIA

Utilize a second passport to hold assets in another country, better a second passport with a different name.

open bank account in another country with your second passport, they don't see you as a US citizen, if it is a US bank, they won't make you to fill out a W-9, if it is not a US bank, they don't care. Of course, you should report your assets to IRS...

I read on FW and in a couple of magazines recently that credit unions can easily do this - take money from your savings with them to pay anything you owe them on other accounts you have with them. The advice was to think twice before having a credit union credit card account if you also have a savings or checking account there.

--

This also happened to me with a bank in the UK. I had a PO box in the UK, and my bank statements were mailed to that address. The Royal Mail can close your PO box if you don't pick up mail after a 30-day period goes by (I had NOT known this). I was in the US for a couple of months and couldn't get my mail in the UK but I thought it was safe in the box as long as I had pre-paid the rent for the PO box (they are rented for 6 months or a year at a time). However, when I didn't show up for 2 months, the post office sent back all the mail that was in my box to the senders of the mail, with an official label on the envelope saying something to the effect that the PO box address was not valid and that there was no forwarding address given for this person, which was an alert to my UK bank to get nervous about my whereabouts. So, without emailing me (and they did have my email address), without calling me (and they did have my phone number), and without putting a message in the message inbox of my online banking account (which I checked online monthly from the US to keep track of it), they got nervous that I wouldn't pay my credit card and so they took all the money I had in checking and applied it to the credit card, without my permission. I didn't find this out until I needed to pay a bill in pounds from the checking account and it was empty - I didn't know what had gone on (I thought I'd been the victim of debit card fraud or something). I was amazed to discover that all this could be done by the bank without any proper attempt to contact me besides sending a second letter to my PO Box (which they already knew had been shut by the Royal Mail, so that was a pointless exercise) and without any permission from me.

By the way, that was the world's "local" (ha ha) bank, HSBC, not a backwater cooperative bank or something.

Perhaps let that story be a warning to those who are thinking of taking the advice in the OP to set up foreign bank accounts in case the US system has some kind of crisis - even when you are relatively good about reading small print and understanding the rules of things, you can't assume that foreign institutions will follow the typical practices of US institutions, and it can be risky not to reside in the country where you have an account--especially if there they have an old-fashioned insistence on using non-airmail postal mail to transact most of the important business (even though they have your email address, cell phone number, and have an online message inbox for each customer--they may not use those methods to contact you).



cclyde said: pthor1231 said: RisingSun96815 said: tripleB said: 1) If any problem occurs where you default or CC gets fraudulently used and you arent paying attention - theres a chance the company might take your savings to pay off the credit you owe them.Could they actually make a withdraw from my deposit account without my authorization (other than fees)? That sounds illegal.

They can do this, in limited cases. The Right of Offset allows them to take money from deposit accounts to pay loans, but not consumer credit cards.

I seem to recall seeing something about this in one of my recent T&C updates for a CC. I expect you may well have agreed to letting a bank use any funds you have with them to pay off/down a delinquent account when you agreed to the terms of the card.

NantucketSunrise said:
This also happened to me with a bank in the UK. I had a PO box in the UK, and my bank statements were mailed to that address. The Royal Mail can close your PO box if you don't pick up mail after a 30-day period goes by (I had NOT known this).


This is why its much better to use PRIVATE MAIL SERVICES (PMBs) rather than "official' PO Boxes

Well, the mail system is not the same in the United Kingdom as the US.

Private Mail Boxes are not such a common thing in the UK. You can't assume other countries' infrastructure will be the same as the US'.

These non-PO box mailboxes at private facilities also cost $900 a year in England. I know, because I researched into it and got one 5 months ago after this debacle. That is a LOT of money.

Besides, they are only available in about 30 places in England. Fortunately London has several.

dawhim said: Of course, you should report your assets to IRS...Yes, you should; just ask all the Americans who didn't, and whose names are currently being furnished to the IRS by what they thought was a trustworthy Swiss bank, UBS.

dawhim said: Utilize a second passport to hold assets in another country, better a second passport with a different name.


Can this legally be done? Lets say I qualify for Irish citizenship or something and then go to Ireland court and change my name there legally. My legal name in America is still BrianBrianBrian but in Ireland could it be MickMickMick?

tripleB said: dawhim said: Utilize a second passport to hold assets in another country, better a second passport with a different name.


Can this legally be done? Lets say I qualify for Irish citizenship or something and then go to Ireland court and change my name there legally. My legal name in America is still BrianBrianBrian but in Ireland could it be MickMickMick?


I can certainly think of examples where this is legal -- passport to Taiwan and passport to US..

tripleB said: dawhim said: Utilize a second passport to hold assets in another country, better a second passport with a different name.


Can this legally be done? Lets say I qualify for Irish citizenship or something and then go to Ireland court and change my name there legally. My legal name in America is still BrianBrianBrian but in Ireland could it be MickMickMick?


Oh no, god help FW Ireland, MickMickMick is going to wreck havoc there now. On the bright side we could all use a breather here stateside.

tripleB said:
EDIT: I didnt mean to steal SIS ideas - just compiling ideas I have read over the last year and too lazy to find actual sources. I editted the ideas with some links that SIS provided to his posts on the subject. Enjoy!


I am shocked! is the bad economy knocking some sense into tripleB??

good thread though.

I have to admit.. it's funny that no one has mentioned this yet.

CASH!!!

You can move it easy, it's as secure as you want it to be, it costs you nothing, it's hidden from everything, and it's quick and easy access if you need it with no strings attached.

ilikebtmoney said: I have to admit.. it's funny that no one has mentioned this yet.
CASH!!!
Ok
You can move it easy,
In less than $10k increments or have it seized by the police and YOU have to prove its NOT drug money.
it's as secure as you want it to be
I'd want it to be secure from fire and theft but its not.
it costs you nothing
except for inflation
it's hidden from everything
Making it difficult to buy anything high $$ like a house.

You can easily accumulate well over $10K over a period of time, just like you're accumulating any other form of savings.

You discuss offshore? You don't earn much of anything past the fees, there is no FDIC, and you still report it.

Securing it from theft and fire is not hard.

Inflation? sure.. but nothing less than some other methods already discussed here.

Why would you need this money to buy a house? We're talking about HIDING money, that's the point of the thread.. you can't have it both ways. I have cash assets because I don't *need* that money at all.

ilikebtmoney said: You can easily accumulate well over $10K over a period of time, just like you're accumulating any other form of savings.


But how are you going to store or move it? Are you keeping records of where the money came from and that you paid taxes on it in case the police seize it?

Skipping 1 Messages...
tripleB said: ilikebtmoney said: You can easily accumulate well over $10K over a period of time, just like you're accumulating any other form of savings.


But how are you going to store or move it? Are you keeping records of where the money came from and that you paid taxes on it in case the police seize it?


I'd prefer not to go into details of how *I* store or move it, but again.. just think about it for a few minutes and you can do so without much trouble.

Records? Sure. I have all my bank records ever since I turned 18. I take cash out each and every month, it's been accumulating for years to a nice stash. I have no criminal record, a perfect history of paying taxes, etc. I am not afraid of an audit, that's why I pay my CPA every quarter. I do nothing shady or illegal.

Despite popular belief, it's not all that uncommon for high net worth families to store cash assets, especially those with "old school" mentalities. I don't transport it all at once, so the storing is again nothing I'm worried about.

I seriously don't get the big deal about this? Why is everyone so afraid of the gov't "taking" their money?? Even if they do, you'll get it back. And if it takes months.. I couldn't care less, I don't need any of that money.



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