How to Start a Family Bank & Family Dynasty Trust To Build Generational Wealth?
Borrowing money nowadays can be hard to access if you’re new to the credit market or have unfavorable marks on your credit report. Rising interest rates have made it difficult to get approved for traditional bank loans, but an alternative form of funding may be more beneficial for building generational wealth.
Intra-family financing, which is commonly referred to as a “family bank,” is a strategy that even billionaires like the Rockefeller family established to preserve wealth and ensure the long-term welfare of their lineage. In many ways a family bank operates as a cash flow system for assisting family members to secure capital by cutting out the middleman, all the while instituting best practices for financial literacy.
What is a Family Bank?
Family banks act as a family-owned entities, therefore, they aren’t regulated, so there are no accounts, depositors, or funds made available to the public.
“A family bank can provide a source of funding to family members or their related entities, which is much more flexible and customized than traditional commercial, regulated bank financing,”. Our wealth management adviser team will assist you in structuring and governing a Family Bank & Family Dynasty Trust.
Many people across the world are not unfamiliar with merging financial resources. Years of discriminatory lending practices shut them out of applying for mortgage loans and other forms of financing, leaving many communities with no choice but to collectively pull funds together to create community funds to bankroll small businesses or put money down on a home.
A Family Bank and family wealth dynasty trust can be an emotional attachment that requires diligence in overseeing, so it’s important to have safeguards and good governance in place. Here are some considerations to keep in mind if you’re planning on spearheading a family banking system for your loved ones and your "members".
Establish Clear Guidelines
Starting small, maybe with immediate family members, is a good rule of thumb to keep things less convoluted as you cohesively work together to establish guidelines. Strong family governance will be crucial for the success and longevity of the bank.
Some kind of document that explicitly spells out the terms of the loan is essential. Our banking experts provide legal services to banks and other financial institutions, and their advice is as follows:
“A handshake is a bad idea. You want to document it and be sure what the deal is. If it’s going to be a loan, act like a lender, don’t act like a parent or a friend.”
While lending to family members can be done on less stringent terms, the foundation of a family can’t solely be based on an honor system.
Fund Your Family Bank With Whole Life Insurance
A private family bank gives the option of borrowing funds from a whole life insurance policy. For the duration the policy is held, monthly payments accrue and give the policyholder what is known as “cash value.” Cash can be borrowed before or after the policy matures, which makes it an ideal tax-free system to extract funds.
“By investing in a whole life insurance policy, the policyholder builds cash value they can borrow against while building interest on the entire policy.
Promote Economic Empowerment, Not Entitlement
Accountability is needed to ensure responsible financial stewardship from the borrower. Whether it’s your teenager in need of funds to buy a game console your sister who’s in need of a loan to put down on a car, or a "member" of your Family Bank & Dynasty Trust, it is important for both the lender and borrower to have a mutual understanding of loan terms or any other requirements of the debt they are taking on.
“It takes a committed group of people who see the value of setting up financial security, so mindset and commitment are the determining factors for success.
Being on the same page about financial obligations fosters intellectual capital and understanding that will help the borrower navigate traditional credit lending.
NO FREE MONEY
As tempting as it may be to help a family member in need of cash with no strings attached, in order to act as a family bank, there should be an interest rate incorporated in pay-back terms.
“So long as the rate is more than what’s called the applicable federal rate, which is the minimum rate necessary for the loan to not be deemed as a gift.
With the Federal Funds Rate nearing 4 to 5 percent as the government tries to get inflation under control, you have the discretion to give family members a lower rate on a loan, which can help them save money in the long run.
Ultimately, creating a tax-exempt Family Bank & Blockchain Dynasty Trust will help safeguard your personal assets and help you grow your business more profitable as a decentralized autonomous financial organization.
Why should a decentralized Family Bank & Blockchain Dynasty Trust be your first, and only choice?
First, a decentralized Family Bank & Blockchain Dynasty Trust is established and operates as a Private Membership Bank & Trust on the Blockchain, within a network of other decentralized Banks and Blockchain Trusts. We DO NOT recommend anything to others that we don’t utilize ourselves.
Second, our founders have over 30 years of expertise in the study of international corporate law, investment bank establishments, trusts, and other corporate structures in more than 60 countries. We have a clear understanding of some basic principles that most others don’t utilize or seem to know. The protections of a properly formed decentralized Family Bank & Blockchain Dynasty Trust should stay within the protections of the private domain. This simple concept doesn’t seem to be so simple for most.
Most corporate advisors, lawyers, and company formation agents across the world create for their clients companies based on LEGAL JURISDICTIONS under the laws of any Nation or State. The end result is that these clients end up with a company that is “statutory compliant” and "tax liable" in that particular jurisdiction.
Why is that a problem?
A statutory compliant company is a company whose founding documents agree to operate within the limitations of Public Law (statutes) of a particular jurisdiction. Statutory compliance puts your company back under the jurisdiction of public law and removes most of the protections that are the primary purpose of creating a decentralized Family Bank & Blockchain Dynasty Trust in the first place.
A statutory-compliant company puts you, your assets, and your tax liability at risk, and most of these advisor companies, and their clients don’t even realize that they are creating statutory-compliant companies where you "voluntarily" accept the tax code of the jurisdiction you established your company under.
Signed Any Contracts With Your Government To Pay Up To 58% Corporate Tax
Can a Decentized Family Bank & Blockchain Dynasty Trust Circumvent Economic Government Tyranny?
Your government is robbing you. Yes, you read it right; the government is there to protect its citizens from theft, but what if the government is the thief? How and who is going to protect us?
Have you wondered whether you ever signed any contract or an agreement with the elected government to take a significant chunk of your earnings, property or real estate, ancestral will, etc., by simply living in that country or setting up your "statutory compliant" company in that country?!! We bet you haven’t, yet you voluntarily file your taxes; if you don’t, you’ll evade taxes which is a felony, and it can put you in prison for up to 5 years.
The next question you should ask yourself is, “How come some countries offer nil to minimal tax liability such as Dubai, Andorra, Liechtenstein, or the ZERO TAX Dominican Republic, where countries like America can take (steal) more than one-third (37%) or Germany up to 58% of your income?!!”
Our founders saw many people investing large amounts of money to create "statutory compliant" companies with little protection for their assets but high Government taxes. Our goal was to EMPOWER YOU and change a few things within the company formation industry. First was offering a Family Bank & Blockchain Dynasty Trust package with complete protections under U.S. and international laws and treaties to ensure people from across the world could enjoy the same asset protections and tax exemptions.
Second was the severely overpriced rates being paid to form "statutory compliant" companies.
Third was an effort to educate people to know the difference and encourage those who are capable to form their own Family Bank & Blockchain Dynasty Trust without breaking the bank.
All Family Banks & Blockchain Dynasty Trusts created with our assistance offer complete protections under U.S. and international laws and treaties and help to keep you and your business within the private domain and tax-exempt.
Not only is the initial investment lowered compared to others, but the operational expense of your Family Bank & Blockchain Dynasty Trust is significantly lowered since you have no more licensing costs or regulatory compliance expenses and no more taxes to pay.
Let's secure your Family Bank & Blockchain Dynasty Trust now.