The problem is that when you have this kind of money, you really can't protect it in the way that modest sums can be. There is significantly higher risks with these massive sums of money and when they are trying to evade taxes, it gets even more risky. Typically, they have accounting firms that manage the money and do all the sleight of hand stuff to mitigate tax liability, but obviously they did not see this coming, which makes it even more unusual. The theory that this was an asset forfeiture seems more plausible, unless the bank was involved in a massive ponzi scheme and the books were cooked until it was too late. Either scenario is possible, but I like to think on the brighter side and believe that she got stung by the good guys!
Cash management accounts exist to automatically sweep money between multiple banks to maximize FDIC coverage. These programs (https://www.moneycrashers.com/best-cash-management-accounts) can do $1-2M in FDIC coverage with debit cards, ATM, and check writing access. That should be enough for wealthy folks to manage their day-to-day spending. Anything beyond that should go into federal bonds which are protected by the 14th amendment to the US Constitution. Large purchases, like houses, boats, aircraft, etc. can be planned for in advance.
It's kind of a standard plan for high net worth individuals. I'd be very surprised if Oprah was keeping $500M in a regular bank.
Unless these funds were irregular. To see this kind of cash stockpiled is very unusual. Most amounts of this size would be safely invested in high yield, relatively secure investments and highly diversified to mitigate risk across multiple investment firms and platforms.
I'm sure everyone with big money has a rainy day fund. Most of them have to have a "Flee the country to a non-extradition country" fund. At least the dirty ones do. The legit ones probably have a 10-20% security fund for bad financial decisions or catastrophic market failures. At least I would. Plus some actual physical liquid assets on hand in a secure location. It is hard to say how some of these folks manage to bankrupt themselves. It may be several factors, but ultimately there has to be some serious personality disorders to squander huge sums of wealth.
The problem is that when you have this kind of money, you really can't protect it in the way that modest sums can be. There is significantly higher risks with these massive sums of money and when they are trying to evade taxes, it gets even more risky. Typically, they have accounting firms that manage the money and do all the sleight of hand stuff to mitigate tax liability, but obviously they did not see this coming, which makes it even more unusual. The theory that this was an asset forfeiture seems more plausible, unless the bank was involved in a massive ponzi scheme and the books were cooked until it was too late. Either scenario is possible, but I like to think on the brighter side and believe that she got stung by the good guys!
Cash management accounts exist to automatically sweep money between multiple banks to maximize FDIC coverage. These programs (https://www.moneycrashers.com/best-cash-management-accounts) can do $1-2M in FDIC coverage with debit cards, ATM, and check writing access. That should be enough for wealthy folks to manage their day-to-day spending. Anything beyond that should go into federal bonds which are protected by the 14th amendment to the US Constitution. Large purchases, like houses, boats, aircraft, etc. can be planned for in advance.
It's kind of a standard plan for high net worth individuals. I'd be very surprised if Oprah was keeping $500M in a regular bank.
Unless these funds were irregular. To see this kind of cash stockpiled is very unusual. Most amounts of this size would be safely invested in high yield, relatively secure investments and highly diversified to mitigate risk across multiple investment firms and platforms.
Agreed.
If this story is actually true, it does seem suspicious that so much cash was just left in a bank.
I'm sure everyone with big money has a rainy day fund. Most of them have to have a "Flee the country to a non-extradition country" fund. At least the dirty ones do. The legit ones probably have a 10-20% security fund for bad financial decisions or catastrophic market failures. At least I would. Plus some actual physical liquid assets on hand in a secure location. It is hard to say how some of these folks manage to bankrupt themselves. It may be several factors, but ultimately there has to be some serious personality disorders to squander huge sums of wealth.