Hiding Money: The Why and How
November 2012
This information is not meant to help criminals evade detection
and arrest. But there are times when honest people might need
to hide their valuables, accounts, and money. In fact hiding
a little bit of currency around the house is a good practice
in case we some day have widespread bank failures. You might
also have an emergency come up over the weekend, when you do
not have access to your bank accounts, and when cash is needed.
We have a page with a video
on how to hide cash.
For larger amounts of money, you may have considered opening
a foreign bank account. This is still possible, but it's getting
harder to do all the time thanks to new laws. In fact, in many
European countries banks are closing the accounts of Americans
now, in order to avoid the regulations that U.S. lawmakers are
trying to impose on them. Also, at the moment you can hold only
up to $10,000 in a foreign account without reporting it, unless
you want to risk jail time.
Note: The laws will change, and possibly
do so by the time you read this. I am not advocating breaking
the law here, and do not promise that the information here is
accurate at the time you read it. You will have to check these
matters out yourself before using any of the techniques explained
here.
Foreign Property
If you use your money to buy land or a condo or house in a
foreign country, this can protect you from creditors. They may
know you have that real estate, but it is usually too much trouble
to try to collect by forcing a sale. In fact, if you choose to
someday live there, and you are not engaged in any criminal activity,
you don't have to worry about extradition for not paying debts.
I am not advocating that anyone refuse to pay honest obligations,
but there are times when a debt may not be just. Keep the property
a low-priced one to make yourself less of a target.
Hiding Money in Other Countries
This suggestion is straight from the book, The Survival
Guide for Interesting Times (part of the Secrets Package)
Although you cannot carry more than $10,000 out of the United
States without reporting it, you can carry less than that each
time you travel to another country (perhaps one where you bought
a second home). Then you are free to keep the cash in a safe
deposit box there. If asked about your assets by a judge here
you will have to report this, but until that point you have some
privacy and protection. The "Survival Guide" also looks
at hiding money by converting it into diamonds or precious metals
that you carry overseas.
Hidden Bank Accounts
Even in the states you can have bank accounts that are more
private. To start with you can open accounts in other cities,
making it harder for investigators to find them. And if you open
only non-interest-bearing accounts and do not deposit large amounts
of cash at one time in them, the banks will generally not report
the accounts to the IRS. Even if you pay all of the taxes you
owe and do not have any illegal or unreported sources of income
it could be nice to have that privacy.
Friends and Family
If there are people in your life whom you can truly trust,
you might hide money with them. Make it a gift and keep the amount
under the limits that would trigger a tax, with the understanding
that you will be given the money back when you need it. You might
allow your friend to keep the interest made on the money while
he has it, as compensation.
Corporations and LLCs
Various legal business structures have been used for a long
time to protect assets and hide money. LLCs (Limited Liability
Companies) have been the legal vehicle of choice in recent years.
They are usually simple to set up and inexpensive to maintain.
In Colorado, for example, it costs just $10 and five minutes
per year to meet the annual filing requirements online. The initial
filing charge to start an LLC is as little as $50 in some states,
and you can use forms available for free online or from a local
library.
In theory there are ways for creditors or others who sue you
to get at the assets in your company, even if it is not a case
that involves the business operations of the LLC. In practice
hiding your money in a bank account or other asset owned by your
LLC makes it more difficult to get at your money, and so can
prevent the attempt in many cases. Also, if you want greater
privacy, your money can be held by a company that is then owned
by your LLC. Ask an attorney for advice before trying this.
Staying Out of Trouble
If you are simply hiding small amounts of money for privacy
and general preparedness for the unexpected, you aren't likely
to be breaking any laws. But keep in mind that most of the methods
discussed here become illegal if use them while going through
a bankruptcy or as a way to hide assets during lawsuit proceedings.
If you are not sure whether your attempts to hide assets might
be construed as fraudulent or in violation of court orders or
the law, ask an attorney for advice.
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