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  • Scott Schamber

Sometimes It’s Not Only the Gold You Own, But How You Own It

I find myself taking it for granted sometimes that our prospective and existing clients know that they can hold metals in storage with us in the name of a trust or a legal entity. However, I recently found out from a long-time client that they would have preferred to have their holdings held in their trust and didn’t realize they could. Let’s set the record straight!


 

“Sometimes It’s Not Only the Gold You Own, But How You Own It” appeared in the Golden Nuggets section of the 2022 Q2 Digger, a quarterly newsletter created by BFI Bullion AG. You can read the entire Digger by visiting the following website: www.bfibullion.ch/digger. We invite you to have a look in any case as they recently redid the landing page for their Quarterly Newsletters. You can subscribe to receive them every quarter, and you can learn more about BFI Bullion in general by visiting the website.

 

I was in a video call with a long-time client and close friend of ours recently when the subject of the ownership of his metals with us came up. When he had applied to and originally purchased with BFI Bullion several years back, he was under the impression that he could not have a storage account with us in the name of his trust. Since I joined BFI Bullion after he had already been a client for a few years, I couldn’t speak for what had happened at the time, but even now, it would be possible for him to change ownership to a storage account he could open with us.


In a Trust…with Gold


For us at BFI Bullion, the fact remains that as long as we can conduct our proper due diligence on a legal entity and on the origin of the funds, we can accept trusts, LLCs, companies, etc. as counterparties.


Why would you apply for gold purchase and storage with a trust or a legal entity?


For the purpose of keeping this easy to read, lets keep the focus on a trust, understanding that some of the points will be the same and some different when using different legal structures.


First, one of the great reasons to use a trust is just the fact that things don’t necessarily need to change if the grantor and/or trustee of the trust passes away. In other words, using a trust simply means that the investment in gold can perpetuate even after the death of a key person. Having a trust own the gold means it doesn’t need to be affected by the death of the grantor and/or trustee.


Secondly, another reason is continuity. For example, a trust might already help during an illness or disability. If the grantor or the trustee of a trust is suddenly not able to manage their gold, the trust would have provisions to activate the designated successor trustee who would step in and be able to manage assets for the trust and, for example, generate liquidity from the gold if and when is needed. These provisions could be godsends, averting assets from getting tied up because of a sudden disability.


Succession planning is another crucial advantage. Since the trust would include provisions as to what happens to the gold it owns, the trust beneficiaries can avoid a lengthy and costly probation process and access to gold in a more efficient manner. Also, there can be situations where an investor finds themselves with dependents or beneficiaries that have limited financial skills, or to be frank, might not trust their next of kin to take care of assets as well as they hope. Using a trust could help to dictate the distributions of benefits, ensuring that family is taken care of properly even in the event they are not investment savvy.


Finally, using a trust or other entity to hold gold can help protect those assets from unlawful creditors, predatory lawsuits, or the likes. This can be a game-changer, especially for Americans, where lawsuits are quite prevalent, and wealth literally can be taken away in a blink of an eye.


Are there any caveats?


My main goal here is to let you know that you CAN own and store gold with us in the name of a trust or a legal entity. There are obviously different types of entities that exist, and each one can offer different benefits.


It might not be for everyone and having any type of legal entity will always mean additional costs in upkeep of that entity. But yes, those costs might be worth the insurance of protecting your gold longer, even after you are gone. The point is that there is no “one size fits all” and some real homework needs to be done before settling on the legal entity that might be right for your investment purposes.

 

It might not be for everyone and having any type of legal entity will always mean additional costs in upkeep of that entity. But yes, those costs might be worth the insurance of protecting your gold longer, even after you are gone. The point is that there is no one size fits all” and some real homework needs to be done before settling on the legal entity that might be right for your investment purposes.

 

It is important to note that if you store metals with us as an individual, you could change the ownership of the metals to a trust or a legal entity. However, it would be likewise important to see if making that change could result in a taxable event for you in any way. And don’t forget, it is even possible to apply online with an entity using our new online onboarding option.


At BFI Bullion, our goal is always to try and help our clients get everything they can out of the metals they store with us. And we would be remiss not to mention that using a trust or a legal entity for ownership of stored metals is completely possible and could prove beneficial for some. While we can’t advise you on the entities themselves, thanks to our BFI Capital Group’s network and being in the business of protecting and growing wealth for nearly 30 years, we can always do our best to connect you with partners that can help answer these questions for you.


We believe you should own gold in any case. But sometimes it’s not only about owning gold, but how you own it!


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