The reality of using tax havens is that they involve a risk. They are lightly regulated at best. Their capital is limited. Their financial services sectors are vastly over-extended. Their ability to withstand shock is very low. And so you end up with Cyprus.
Wealthy U.S. families that have or are considering offshore accounts are watching Cyprus closely.
"I think families are suddenly looking under the hood of these countries more closely," said Stephen Martiros, a Boston-based, independent consultant to individual investors and family offices. "People want to do a real scrub down in all these jurisdictions to make sure they understand the risks."
There's a simple answer: don't do it. The risk's not worth it.