Is offshore banking illegal?
Although offshore banking may have gained a bad reputation from the entertainment industry and because of stories in the news media, there is nothing illegal per se with the concept of offshore banking.
As the name implies, offshore banking just means that a person has invested money in a financial institution that operates outside of the United States. People do this for many reasons.
While sometimes it is legally to take advantage of favorable tax treatment or other laws, in other cases, offshore banking is just a matter of convenience. For example, someone might travel frequently to another country — Mexico for example — and want to maintain a bank account there.
That said, people have used offshore accounts improperly. Undisclosed accounts in particular are problematic since they often serve as a vehicle for tax evasion or money laundering, both of which are serious offenses.
It is also not permissible to use an offshore account to hide assets during a divorce.
Offshore banking can be an effective financial and estate planning tool
Medical professionals and other business executives in the Arlington and McAllen areas who have money to invest may want to consider offshore banking as an effective financial and estate planning tool.
So long as one follows the applicable laws, an offshore account can save a person on tax liability. Likewise, the account may be a convenient means for passing wealth on to a loved one without having to worry about probate or including the account in a trust fund.
The offshore account could also possibly be a legal means of protecting money from would-be creditors.
There are a number of creative estate and financial planning tools which are available to Texas residents. They should be sure to understand these legal options and, specifically, how these options may help people accomplish their financial goals.