Unclaimed Bank Assets
It is a known fact that during the Second World War and the period thereafter, it was common practice for High Net-worth Individuals (HNI) to use numbered accounts and other type of confidentiality practices to protect their assets.
As many of these numbered accounts have been kept in utmost secrecy, it is estimated that over USD 636 million still lies dormant and unclaimed in Swiss banks alone.
After years of discussion, recently the Swiss authorities reached an agreement on the time frame which must elapse before unclaimed bank deposits ownership title will automatically be converted to property of the Swiss Federal government. The Swiss House of Representatives followed the Senate, giving heirs a total of 62 years to recover dormant assets. This comprises a 50-year limit before banks can liquidate such accounts and grating an additional (ultimate) 12-year legal deadline.
This event captured international attention, as the Swiss Banks are the first to come to mind when addressing the issue of bank-secrecy. However, make no mistake; Swiss Banks are not the only ones with a stack of unclaimed funds. This is a common occurrence at countless offshore banks today.
While is it is no longer possible to open numbered-only bank accounts, or to use fake-driver’s licenses to open bank accounts, nowadays, the need for privacy and confidentiality is greater than ever. Although not for the same reasons as during the Second World War, the need for privacy for Privacy and Confidentiality is still very well alive.
As mentioned in our newsletter on the paradox of transparency, care must be taken that your private information does not land in the wrong hands and be used to your disadvantage. Luckily there are solutions available, which one can apply to arrange your affairs in a private and confidential way. This, without recurring to the old “concealing technique”, which, as motioned above, could lead to your patrimony ending up in the hands of your banker and local authorities, instead of going to your loved ones (or favored charity).
A legal tool which is steadily gaining popularity to address these issues is the Private Foundation. A properly structured and managed private foundation is an ideal legal tool, which can be used to hold properties, bank accounts and other assets and keep the identity of the owner, confidential. The Private Foundation is also used as an estate planning tool. In the case of decease of the founder, the Foundation Council will manage the foundation assets, taking into consideration the wishes of the founder. This, in fact resolves the issue of unclaimed assets previously described. Apart from confidentiality and estate planning, a Private Foundation offers a number of additional advantages, such as asset protection, to avoid probate and retain control of your assets.