What Private Wealth Attorneys Need to Know About Money Laundering
Private Wealth Services Partners Andrew Weinstein and Kevin Packman co-authored a WG&L Estate Planning Journal article titled, "What Private Wealth Attorneys Need to Know About Money Laundering."
Estate planning attorneys are increasingly encountering situations in which clients have assets abroad and family abroad. Many attorneys may also represent foreign clients with either U.S. family or U.S. assets. Whichever the circumstance, U.S. counsel are often engaged to assist clients with international issues. The issues can be as simple as forming a foreign holding company for a nonresident alien through which to own U.S. real estate, or an international estate plan that can involve a complex series of international and domestic trusts, underlying investment companies, and both passive and nonpassive investment assets located in multiple jurisdictions. The very act of engaging in the planning and implementation of the international estate plan raises the possibility of counsel and the client being exposed to asset forfeiture.
It is all too possible to encounter a circumstance in which a client's plan may violate a local law, not to mention the circumstance where a client's subsequent actions, once the plan is in place, might lead to evasion of tax, whether U.S. or foreign. There is little guidance in the context of international estate planning as to what can happen when there are violations of foreign law or how easily a plan can violate U.S. wire fraud laws, money laundering laws, or mail fraud laws.
This article will begin with specific circumstances under which an estate plan can result in violations of money laundering laws and result in forfeiture of the assets involved. It will then discuss the specific forfeiture laws, both related to money laundering and income tax deficiencies, before concluding with an explanation as to how this can result in exposure of counsel with respect to malpractice and violations of Codes of Professional Responsibility and IRS Circular 230. Nevertheless, this article should not be relied on as a thorough analysis of these issues.