In today's frantically mobile society, global citizens must plan for immigration, tax and investment torpedoes from anywhere that have the potential to evolve into unanticipated frequently unpleasant events. According to the New York Times, on May 14, 2008, "Italian's Detention Illustrates Dangers Foreign Visitors Face" (by Nina Bernstein), Mr Salerno, an Italian lawyer, found that his too frequent jaunts to the United States to see his American girlfriend landed him in a regional US jail for more than 10 days.

Why would such a situation occur? US immigration officials suspected he intended working in the United States. We don't know if he could not have had the appropriate visas, or overstayed his 120-day per year welcome, but this is probably a classic example of a highly intelligent individual who failed to plan for a contingency event!

There is more: STEP (Society of Trust & Estate Practitioners) reports the following in their STEP International News Digest 15 May 2008.

EUROPE - "Commissioner says Savings Directive is widely flouted" (Financial Times, AFP). An interim report presented to EU member state finance ministers by European Commission taxation chief Laszlo Kovacs claims that many Europeans are using trusts and foundations to avoid tax on interest. Kovacs says several ministers have agreed that the EU Savings Directive should be extended to cover foundations as well as dividend income and capital gains.

USA - "Ex-UBS banker charged with offshore tax fraud" (AP, Financial times, Bloomberg, The Times). A former employee of the giant Swiss bank UBS has been charged in Florida with helping a client evade income taxes by hiding $200 million of assets in Swiss and Liechtenstein bank accounts. The US authorities have also indicted a Liechtenstein banker who is not in custody. The Wall Street Journal reports that US prosecutors now plan to subpoena UBS for the names of its other wealthy American clients. Another problem UBS doesn't need after writing off $37 billion of sub-prime exposure.

ISLE OF MAN - New cash declaration laws - Isle of Man Government. From June 1, travellers must disclose to the Isle of Man authorities whether they are carrying more than 10,000 euros (£7,800) in cash or cashable securities. Recent anecdotal evidence here is that domestic banks are also limiting US travel dollars cash to $3,000 only and on proof of a plane ticket.

USA - "Obama targets tax avoidance" (Associated Press). Democrat hopeful Barack Obama says his $80 billion tax cuts programme would be paid for by "closing loopholes and offshore tax havens".

Coming right after the salacious details of multi-country tax evaders discoveries in Lichtenstein, these reports are nasty precursors of future initiatives from many countries very, very serious about monitoring their borders and levying tax on all those using their resources to live, work, play, and invest. Cross-border travelling, whether physical or electronic, will continue to become more complicated and stressful.

This is not good news for those who do not have clear-cut definitions of who they are, where their country allegiances lie, how they are managing their finances, and what contingency plans are in place. Over the last eight years, I've commented on many financial, tax, and emotionally related subjects, but have trod lightly around a major issue that can encompass Bermuda resident families, that of acknowledged, but poorly understood or unacknowledged (and ignorant of) multi-national allegiances.

Regrettably, the term financial planning has become a generic commodity for everything financial, so much so that the perception of what planning can actually accomplish is blurred.

Clients who have specific life issues or financial problems compounded by the above cannot solve them alone by buying an investment product or by putting a piecemeal approach in place. And, unless you are a recluse who never plans to leave Bermuda, never uses another currency, has no relatives or investments elsewhere, the fact of merely residing in this complex offshore environment will necessitate sooner or later, putting together a financial plan that integrates your entire financial profile.

Are you prepared? Any of these significant life events may trigger unexpected results.

• Lump sum or annuity pension distribution from an ancient onshore job.

• Multi-national offshore citizen death with onshore citizen beneficiaries.

• Retirement to elsewhere with assets in multi-jurisdictions.

•Significant changes in global lifestyle necessitating complete overhaul of current portfolio.

l Owning several passports and renewal processes.

• Divorce and relocation.

• Credit cards issued by various jurisdictions.

• Operating an onshore tax regime business, but living offshore.

l Tax regime citizen living offshore, owning offshore businesses.

l Serious disability, or illness.

l Widowed in a multi-national relationship.

l Beneficiary of an international inheritance.

l Proceeds from sale of investments, rental income, or overseas real estate.

l Settlement of a personal injury lawsuit.

l Redundancy.

l Immigration to another domicile.

l Constant travel to your 'vacation' cottage in another jurisdiction.

l Bermuda trust beneficiaries residing in tax regime countries.

l Special needs child.

l Onshore citizen wants to return home after many years offshore.

l Expatriated citizen decides to repatriate as all relatives relocate.

l Asset draining Eldercare, and accompanying long-term maintenance of real property.

l And others.

Some readers may put this article down thinking that this is a blatant case of self-promotion. Dismiss it as such if you will, but I leave you with this durable thought. Bermuda has hundreds, more likely thousands of local residents with multiple nationalities, multi-national family relationships, multi-national beneficiaries in foreign trusts/domestic trusts/investment portfolios, and have US/UK/Canadian/German/Italian/Australian/Irish/family (on and on) relationships, both retired and still working, and many other combinations of the same.

Compliance has increased. The FATF and the IMF have considerably ramped up processes for strict identifications of assets, clients, settlers, trustees, beneficiaries, companies and underlying directors, shareholders and so on required of all professional managers and financial institutions.

If your family financial affairs have a tendency to resemble Man O'War jellyfish, tentacles reaching everywhere and with the potential to sting everything they touch, you have a problem.

Today, it is not enough for your trustee, financial representative, attorney, banker, etc. to tell you to take tax advice. Their position may be that it is not their ultimate responsibility, but your responsibility. If you do not plan adequately for all aspects of your financial future (and it is far more than just filing a few tax returns) but includes investments, tax, estate, retirement, and risk management planning, the elephant in your living room will be looking for a lot of "splainin" from you.

The old comments that "I'm (we're) not doing anything about this, because who will find out" or "if I (we) ignore it, it will go away" has no validity.

"Ignorance Of The Law Is No Excuse," direct quotes - US Internal Revenue Service, UK Her Majesty's Revenue & Customs, Canada Customs and Revenue Agency (CCRA)

Resources:

Bermuda cross-border comprehensive financial planning specialist, Jennifer Patterson, CFP, CIMA, Patterson Partners Ltd. www.crossborderliving.com, www.patterson-partners.com

Hamilton Global trust/tax specialist, Denise Belton, CPA, KPMG, Hamilton

Martha Harris Myron CPA-NH#1929 CFP®#67184 TEP#203510 is a Senior Wealth Manager at Argus Financial Limited specialising in investment advisory services focused on capital preservation and comprehensive financial solutions for clients considering lifestyle transitions and rewarding retirements. Confidential email can be directed to marthamyron@northrock.bm or 294-5709 CFP®, CERTIFIED FINANCIAL PLANNER®, and are certification marks owned in the U.S. by Certified Financial Planner Board of Standards Inc. (CFP Board) and outside the United States by Financial Planning Standards Board Ltd. (FPSB). CFP Board and FPSB permit qualified individuals to use these marks to indicate that they have met CFP Board's and/or FPSB's initial and ongoing certification requirements.

The article expresses the opinion of the author alone. Under no circumstances is the content of this article to be taken as specific investment, legal, tax or financial planning advice, nor as a recommendation to buy/ sell any investment product. The Editor of the Royal Gazette has final right of approval over headlines, content, and length/brevity of article.