You can get both private and strategic banking – so what’s the difference?
Private banking is a term often used by commercial banks that feature special services for customers who maintain high balance accounts. For our purposes private banking is about using an unlisted business trust as the account owner.
Strategic banking is where you have multiple accounts with various legal owners in multiple jurisdictions. We do this for three reasons – operations, muggers, and safety.
Various legal owners include individuals with SSN or a business organization with an EIN. The business could be a corporation, LLC, or Business Trust. Multiple jurisdictions mean various individual states.
Corporations and LLCs are more familiar to bankers. Your workload includes Secretary of State registration and foreign naturalizations. However, a business trust rarely needs government permission.
Executing a strategic banking plan does takes effort and time. But once setup and used properly, you have formidable safety.
Three parts – operational funds, mugger’s money, and slow money.
- Operational Funds is your basic personal or business account for paying monthly bills.
- Mugger’s Money is a saving account you highly value and want protected. But it’s a decoy for your big money in the event of a lawsuit.
- Slow Money is where you keep large balances. It’s your stealth fund for special situations and opportunities.
Operational and Mugger’s can be personal or business accounts using an LLC or Corporation. These are ok to have in your home state.
Slow Money is best when using a private trust because it’s unlisted. And this account is most obscure when setup in another state at a non-nationwide bank or regional credit union. Brokerage firms are outside the ‘commercial banking’ system.
If you anonymize all your accounts and become lawsuit target, it’s simple to ask how do you pay for groceries? You’re safer showing an account for operational transactions. Otherwise, the plaintiff’s attorney will suspect you have money hidden somewhere. Would you rather have them attack your $100 account or the $20 account? The chase begins.
Summary
Strategic banking involves multiple accounts, various legal owners in different states, and graduated balances. Your Business Trust is a key piece.