QUESTIONS ABOUT USING ASSET EXCHANGE TO OBTAIN AN ANNUITY

What sort of assets can I transfer into my annuity?

You can transfer practically any asset into your annuity, including cash, stocks, bonds, precious metals, a business, vehicles, notes, or other receivables. Once these assets are deferred on the income or capital increase of the assets as long as they remain in the annuity.

Will I have to pay the 35% excise tax imposed on the transfer of assets to an offshore entity?

It is possible to structure a transfer of assets into the annuity so that the excise tax is legal. This is a tax-free exchange of the assets for the annuity.

What about capital gains tax on the appreciated asset? 

Properly structured there is no capital gains tax on the exchange of appreciated assets for the annuity. Once in the annuity, the asset can, if so desire, be immediately sold through the annuity, again incurring no capital gains tax.

What about estate taxation? 

If the annuity is owned by an offshore insurance trust, upon your death the annuity is extinguished and the proceeds become the property of the trust. These proceeds are then distributed by the Trustee to the beneficiary(s) of the trust according to your instructions as set out in the trust deed, thereby avoiding probate and estate taxation.

Who controls the assets in my annuity? 

Ultimately, you do. You do so by: (1) ensuring that the independent investment advisor you choose to manage your account is someone who shares your investment philosophy, and/or (2) investing in funds that you yourself choose.

Can I borrow funds from the annuity? 

Within certain constraints established by U.S. law, loans may be made to you, your nominee or your trust from the investment portion of your annuity on very favorable terms.

How does having my assets in an annuity protect them? 

It is extremely difficult for creditors or other claimants to attach the assets of an offshore annuity. It is, for all practical purposes, impossible for them to do so if the annuity is held by a trust in an asset protection jurisdiction such as Belize.