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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