Without exaggeration, since the data are hard to find, there has been a consistent use of offshore entities to isolate and hide assets from family members on behalf of people of means. Wealthy, and not yet wealthy individuals (mostly male) watched, back in the 20th century, divorce after divorce decimate the financial empire they had assembled. Then they observed occasional litigation between and among family members, including children or business partners, designed to attempt to seize their wealth with or without cause.
Again without exaggeration, a potential successful defensive
investment tactic is to simply not let family members know what has been
accumulated -- put it in an offshore
unreported entity with its own legal jurisdiction and control. Snide and cynical secrecy in perpetuity, but
a product sold by advisors – and often.
Legality can be debated, but if it gives the client a good night’s
sleep, it is worth the effort (and the fees).
Now, with all the revelation in the press, the benefactors
of the ‘secret squirrel it away’ tactic have another problem. If they have not created these entities or
vehicles for illegal purposes, they can proudly reveal what is there and claim
(legal) innocence. However, in displaying
their honesty they simultaneously reveal their assets to their potential
litigants. I predict silence as long as
possible. They still will have to cover their assets.
