DALLAS, TX--(Marketwired - Apr 16, 2013) - Prominent Dallas Attorney Joe B. Garza offers a forewarning to investors in the wake of the chaos that has ensued from the Cyprus banking system failure, and the considerable financial fallout that it has fomented: preplanning properly is vital in keeping the heartbeat of your finances drumming to a healthy rhythm.
"The Cyprus bailout touches on two important themes in tax and business planning," Garza explained. "Firstly, it shows the potential danger of holding foreign bank accounts and trusts. And secondarily, the Cyprus bailout reinforces the importance of a proper asset protection plan. In an asset protection context, the Cyprus situation is highly unusual because the threat to assets is coming from banks and the government, as opposed to creditors."
The Cypriot baking system suffered large losses as a result of turmoil in the global financial system and the economic problems of Greece. In recent months, the problem grew into a full blown crisis, with Cyprus being forced to seek a bailout from the European Commission, the European Central Bank, and the International Monetary Fund.
People in the United States often hear about wealthy persons reducing tax liability by holding accounts in countries such as Switzerland. Foreign account holders do not always fare well in a crisis. In Cyprus, account holders with deposits totaling more than 100,000 Euro will suffer steep losses in the bailout. Cypriot parliament was more concerned with the average Cypriot voter than with protecting wealthy foreign investors.
Texas is a noteworthy example of domestic havens, known for its laws which are friendly to asset protection. "Texas has really become known for its generous asset protection rules, which range from annuities to charging order protection for businesses," explained Garza.
Fortunately, the United States and its banking system are on a vastly sounder footing that Cyprus and its banks.
"High-earners in the United States can still face threats to their assets from other sources, such as lawsuits and business-related litigation," Garza warned. "To craft appropriate asset protection plans, lawyers and other advisers must consider the relevant laws, which can vary greatly from state to state."
Learn more about Garza & Harris, Ltd. by visiting: http://www.garzaharris.com.