Take Control of Your Legacy, Get Your Trust in Order

the core Foundation of it is your revocable living trust you all need to have one because we will all die someday that Legacy piece is making sure that it's not wasted it's not lost to taxes or lawyers or disputes or fights welcome everyone to the Main Street business podcast this is Matt Sorensen joined by my amazing co-host Mark J Kohler on location beautiful Hawaii Maui to be more specific here at the Brandon Turner a better life event original host of Bigger Pockets and a lot of his crowd tribe Community has put together a big real estate event so I came here for work uh it was it's it's miserable but you know you got to do what you got to do yeah we had to send somebody and so yeah Mark drew the Short Straw he needs he's out there you know of course Mark rocks the stage we all know that so um we sent our Superstar out there but uh hey we are excited for this month of podcasts we're gonna be talking about building a legacy uh a lot of things that go into that and one of the core pieces that we don't give a lot of attention to of the trifecta too this is a big piece many of you know the trifecta we're going to give a lot of attention to that this month um I don't know how much mystery I want to put into this but that's we're going over building a legacy no it's it's and uh yeah I think it's really a month that I want all of you if you're a regular listener if you want to share this podcast with others or if you're catching this on YouTube please share it with your friends family business partners that uh it's not just about uh making money and this Legacy piece is what's creating wealth and it's creating freedom and passing on what you've learned and your experiences it's not just a will or a trust but those are the parts of it so this next month we're gonna call we're calling a legacy month I mean you've got Shark Week back right here this little section you're looking at is a straight between Maui and Molokai the most prolific shark attacks in Hawaii are in this stretch because it's it's kind of protected the shark's life is a little calmer so I'm going to be surfing over here earlier uh later and uh make sure is your estate plan done uh before you do that yes sir okay because no swimming in shark infested waters bungee jumping any of that you know until your staplan's done okay folks okay yeah we'll do that all right so last night Matt and I were thinking okay what are the topics we need to cover during this Legacy month and the trust concept having a trust is a key piece of that whole equation and so rather than getting into the some of the other moving parts and we've got a lot to cover over these uh broadcasts this month we in fact we should dedicate one of our open Forum questions to just estate planning so that'll be a part of it too so if you have questions where we want you to send those in we'll give you where to do that so the trust is the key part of it and last night I was at a little uh dinner at the end of the event and uh mix and mingle out yes there was roast pigeon don't rub it in like yeah food was terrible it rained it was windy you know you know yeah you yeah you go with that so anyway um so but several people uh seriously came up and said what about the Delaware statutory trust and what about an irrevocable trust and what about this because every once just rather than do anything they want to go too far it's like yeah rather just take that easy step we've got to find an analogy or a good concept to teach that today but let's talk about the trust that everybody needs and how to watch out for the crazy out there yeah the crazy will stop people from doing what they need to do that's the hard thing is a lot of people hear the crazy and hear about all these trusts that they should do and particularly Real Estate Investors I hate to say it but Real Estate Investors are the number one culprits for the worst information about trusts in estate planning there's some whole industry out there selling this BS out there now let me say one thing if you're learning about statutory trusts Delaware trust irrevocable trust I guarantee you 99 well 99 times out of 100 it is not a real lawyer selling you this it's just not it was real lawyers Mark and I and our whole team here at kqs lawyers for every 1 000 trusts we set up we might have an irrevocable trust maybe it's every two thousand an irrevocal trust these are just not that common you should not should not be on your roadmap I'm never gonna do one Mark's not going to do one these are things that are just not for the typical small business owner real estate investor so don't get confused by this you know crazy shiny thing over there and we're going to talk about some of those there's the dapped domestic asset protection trust the charitable trust we're talking about something different names yeah and we'll talk about those we'll we'll unpack those but uh where we want to start is just this basic uh concept of why a trust what is that trust that all of us should be looking at where do we go from there I will say Matt in defense of the real estate industry Dennis Dennis yeah I don't know what it is and in fact last night it was a dentist and his wife that were here at a real estate conference that brought up the Delaware statutory trust and I was like this suspect yeah usual suspect and now everybody you met this might sound familiar I said was this person pitching this charging 5 10 15 or 20 grand for this trust structure and they they looked up in the sky they couldn't look at me straight and they go yeah okay was it a law firm that was going to stand behind it and actually file your tax returns next year or were they just saying go to your accountant yeah and I said there's those are two Key signs that there's a problem and I I was jumping up now it was funny I was like trust me if the if the Delaware statutory trust worked I'd be selling it yes you know you don't think I'd sell it I I'm here to make money but I can't look these people in the eye on day two and said I did the right thing they do exist there are some people yeah there's some really rich people out there that have one that's point oh one percent of the community don't think it's for you yeah don't go there yeah so let's just start with the core foundation of the trifecta you guys know we teach the trifecta several podcast episodes on that it's a way to organize your tax Financial wealth Building Life we've got operating assets on your left and businesses we've got your assets and Investments on your right and Underneath It All the core Foundation of it is your revocable living trust you all need to have one because we will all die someday and we want to have a legacy and a plan that carries forward what's going to happen to our business what's going to happen to our assets what do we value and love you know and if you love your family you're going to leave them we're all going to die one day you want to leave a legacy and a plan for them not chaos so that's this revocable living trust here and it really shows what you value to because all this work you're putting in your business making money your day job whatever it may be all these assets you're trying to accumulate on the right side of the trifecta and get structure to minimize taxes well the end of the day there's something left over and a lot of us that are working our butts off that's something left over that Legacy is in our estate plan we have to get this thing done yeah and let's break down just so that there's spoiler alert we do not charge over twenty five hundred dollars for this in fact the 2500 trust package that we have includes designing your Trifecta and making sure you're bringing it all together in fact it's in it it's an enhanced estate plan because we just don't want to throw a trust at you there's a bunch of pieces and parts so if you're out there paying well and this is classic and white well Mark you don't know Hawaii and they're they're five thousand dollars here no they don't oh and we do estate plans all over the country we don't have to have be licensed in New Jersey to do a trust in New Jersey the restatement of trust is a federal a concept law that has been adopted by 99 of all the states there are some weird States like Louisiana and a couple unique things in some states but we're aware of that we've we've vetted this we have incredible software and Partnerships with uh larger companies than us that make sure we have all the right Provisions in our estate plans so what I just want to say is as we're talking about this don't think we're talking about a five ten or fifteen thousand dollar project this could easily be twenty five hundred dollars less and something you update over the next 20 years so just a thought there too yeah okay um well I think how about we just talk about a lot of people think well I have a will you know um or how can I just what I want to just do a will what do I got to do a trust let's let's talk about that for a second here well a will is basically say who gets what but you have no control about what conditions you can't carry it out and restrict things you still have to go to probate if you own a home even just a home let alone all you Real Estate Investors have properties in multiple States oh you got a property in Oklahoma and one in Texas and you live in Arizona you're going to court in three states when you die with the will you think your loved ones are gonna love that no okay no they're gonna help that yeah and this Legacy I wanted to go back to that for a minute and when Matt said you're doing an estate plan for legacy in that trust you're going to be able to capture this bigger concept of not just who is what but who gets what it's I want to have a business continuation plan what I want to see happen to that big multi-unit project or This Land Development or you're going to have a board of advisors a board of directors you should be updating your business plan and including it in your corporate books and in your estate planning binder so if anything happens to you your board of directors your board advisors your spouse your kids your parents whoever is those people that are going to pick up the pieces when you die it's not if it's when um that Legacy piece is making sure that it's not wasted it's not lost to taxes or lawyers or disputes or fights and so you can really craft a really cool distribution plan for your wealth that's the Legacy now there's no asset protection there's no you know spooky you know no one can find you crap this is just good core what happens to my stuff plan and that's the core trust that we're talking about yeah and you know think of just the normal things in life you know you pass away and you got kids in their teens or younger um you got adult kids who don't you know who act like they're teenagers still I mean they could receive a very large inheritance directly from a will and you may not want them to get this big piece of money or this responsibility in this business yet or in managing all your properties that you would want to be carried out but a trust allows you to put in some mechanisms over time where they can get distributions they might get a third when they're 25 another third when they're 30. another third one they're 35. you can make them for every dollar they earn they get a dollar from it so you get to start putting in some controls and this is where I get back to like leaving a legacy it's not just about who gets the money within this you can say what you value how are my kids gonna get this what charities am I supporting what conditions am I putting on this money for it to be used and put to work and that's all stuff you can do in a trust that you cannot do in a will you need to do this in a trust love it um now what is the term let's hit some terms again we this is going to be a shorter podcast we want to just get this topic out there for all of you to kind of start marinating on this uh we'll talk about turnaround time expectations this overall estate planning concept and then we're going to unpack it over the next three to four podcasts and again do some q a for any of you that have questions that we don't seem to cover um terms this what we're talking about is a revocable living trust rlt revocable living trust it's it can be used for privacy in some instances uh it's but it's primarily there to avoid probate and pass on this these terms if you will these rules of distributions a domestic asset protection trust is only a good in about 15 states it's for protecting your home maybe a cabin or Ranch they're very well designed and structured to be affordable and they make sense that's a domestic asset protection trust you might hear about a charitable remainder trust we've been designing those for years that's where we're going to put an appreciated asset sell it hold that money and distribute it over your life and then it goes to charity when you pass away and that does create some asset protection but it's also an investment mechanism to avoid taxes it's not the foundation so it's adapt and the CRT are two well-known well used and respected trust structures but they're still separate from this the rlt is your foundation what are some other trust Matt that you come to mind that are just kind of Fringe don't go there or well there's one there's a irrevocable life insurance trust that Island that's a common one that's if you have a very large estate 10 million plus 20 million plus if you're married you might want to use what's called an irrevocable life insurance trust this is designed to minimize or reduce estate tax when you die so the estate tax exemption you don't need to worry about an estate tax unless you had a 10 million plus a state I think it's even like 11 million now or something single 20 million plus if you're married but if you are you know in that scenario we do have clients that hit that and have to use this irrevocable life insurance trust that can be a tool but that's not instead of a revocable living trust that's in addition to so make sure you've got the core foundational piece to revoke living trust then you add on some of these things maybe an air vocal life insurance maybe a CRT charitable remainder trust these are a little add-on trust in addition to the estate plan or vocal interest a couple other thoughts folks as you're out there uh when you do a trust with us we're going to diagram it all out and bring it together your trust should own your rental Pro your llc's your businesses we'll get into more of that funding the trust in and I'm sure future podcasts this next month but one concept here is another trust is the land trust so you may hear about land trusts they're used they're cool they're for a real estate transaction where I want to avoid a due on sale Clause maybe create some seasoning and they're they're a decent technique in Most states there's still states that just don't like them at all we're not a big proponent of land trust because it's really just a transactional function that only certain types of Real Estate Investors use we were a firm believer in the LLC and we can create privacy within LLC and protection we don't need a land trust to do that uh so keep in mind the land trust role um this Delaware statutory trust I just I just don't see their benefit um they're typically again sold by the non-lawyers the kind of Fringe we know it better asset protection lawyer or teams or advisors or whatever they are and they're charging five times for this revocable living trust structure if you're considering that just get a second or third opinion call us up tell us what you're seeing what they're telling you and we'll we'll figure it out I mean yeah um yeah a lot of times there's a simpler easier less taxing solution than the Delaware statutory trust so um we can talk about that and what your goals are but you know it's hard it's so hard because there's so much misinformation we don't know what you've been told or what someone's told you because most of it's not it's not right I don't know what you know we just have to hear it and be like ah no uh don't do that um yeah okay well I think we hit the common trusts that are thrown out there um remember we like the revocable living trust sometimes people call it like a family trust or a or just your estate planning trust the key thing in there revocable means you can change it at any time and that's the one thing that's really important about this type of trust a lot of these more complex trusts once you do it you're done you cannot change it it's set in stone but there's vocal living trust you can change any time you got a kid you don't want to give money to you got a a person in your life boyfriend girlfriend you know spouses that's a little trickier you got to do some divorce stuff but you know you can change it at any time and that's the nice thing about revocable it also doesn't require separate tax returns this is everything's still going to flow on your 1040 all the same it's not going to wreak havoc on your tax life it's not going to require 10 CPAs to freaking do your tax return now because you implemented some irrevocal trust your typical account and CPA can easily handle it's not going to mess anything up on your taxes yep I love it and you know it was funny uh and another which I was a huge two or three mix and mingles now working events this this last few days and of course I people come up and ask questions and and it was funny at one point I had yeah I love it it's fun there's so many good people here but I had this couple literally 10 kids they're this woman had birthed 10 kids it wasn't a blended family she she was like nope they were mine and I and I go any twins she's like nope no twins I was like yeah budget single yeah and uh they were ranging from Age 5 to 22. wow and they had 17 rental properties just I'll leave it at that and we'll see where they're from or anything like that I want to be generally private but there was people who stand around as they were sharing this it was but it was exciting to hear what they were doing in real estate and no trust they're like no one's ever told us to do a trust they go we've done all of our own entities by herself online our accountant doesn't know what they're doing we just switched recently and they were a hot mess and they were like so excited to meet with one of our attorneys and say please bring it together that we know we need something we just have been scared to pull the trigger because we keep caring bad info but right next to them was a single guy and this single guy had same type of story multiple rentals and a small business and he was like well I don't think I need an estate plan until I get married or have kids I'm like oh my gosh so both of these twins of the spectrum had thought it didn't apply that I think the family knew better than the cigarette but I told the single guy what happens if you die is your family gonna pay mom and dad a brother or sister you've got a syndication he had he had set up a syndication with 50 investors and I was like what are you going to do you know and he's like oh God and so so whatever stage you're at in life this is important that's the point it doesn't matter 10 kids in a Cadillac that's a sweet 80 something but uh or single guy you know single gal yeah that's yeah I think everybody needs this especially those of you and I just think you're building assets um you've got a business you own a real estate you've got kids I mean all these things in and of itself are one reason why you need to have an estate plan so um so we want we're obviously big proponents of it and it is a state funding special month that kqs lawyers you know you save 200 bucks by getting it done now until we do more State plans this month than we do the rest of the year because a lot of our clients wait for it we give a special to get it over the hump we know it's one of those things that people avoid doing but we're trying to switch the narrative here don't think of this as oh I gotta think about dying think about your legacy think about all of your assets passing on think about how you want it to be when you're gone I know a lot of people are like I don't give up I'll be you know six feet under what do I care you do care you do care of these people all this hard work oh my gosh yes you do care and you do not want to leave them fighting I can't tell you Mark and I have seen it so often no estate plan someone passes away even the best of families that have the best intentions have misunderstandings about who's supposed to get what and what Mom or Dad actually wanted because there was no written plan okay they would have been cool with what you wanted if they knew it was your plan but they're all confused no one talked about it and now they're left having to figure it out and fight over it and that's the last thing you want you want your family to love each other after you pass on not be fighting over because you were too lazy to get a freaking estate plan done Matt's just opening up so many avenues for discussion here I know one of our uh upcoming episodes is going to be just creative Provisions for your legacy because it can get so fun because you can create these board of directors and advisors while you're alive or you can Implement your own private Foundation or charity upon your passing you can do that I just giving you a little teaser here of all the fun you can have with making sure that these assets You're Building are impacting not only your own family but maybe the community uh and everyone around you in your in your church or your school uh that your alma mater that you believe in there there's so many opportunities here just dropping five million dollars in your 27 year old's lap maybe is not the best thing you know it's creating a trust baby uh lots of options you can definitely help your kids step on your shoulders and do great things but you can also impact the greater good with a good estate plan um but again 2 500 bucks or less uh we've got a special this month uh there's a lot involved in a good estate plan that we're going to unpack over the next month and you it's something that can be done in a good two to four weeks really once you get your appointment you get all the information downloaded to the to the attorney you're going to meet with a real attorney believe that or not yes and this is not a do-it-yourself email you the docs and you figure it out we really walk you through this whole thing create a diagram that whole process can be in a month's time we really push our attorneys to try to turn these around uh it's a busy time of the year but we bring the whole team together for this special month so that we can focus on it and help you get over the hump yeah and the regular package is actually 16.95 with the discount so it's very affordable um Planet enough you've got family members too your parents are something and you're like man I don't want to be the one left here having to worry about this with my siblings you know Mom and Dad get this done for your your sake you know maybe it's a great Father's Day present coming up yeah or something like that belated Mother's Day Mother's Day you know whatever excuse you need give the gift of a legacy totally um well okay I think hopefully we've warned many of you about the crazy that's out there get a second opinion if you're hearing about a trust that sounds too good to be true that has some sort of unique asset protection benefit or tax benefit we didn't even bring up the Deferred sales trust I'll just say it now deferred sales Trust is a glorified installment sale and you know that someone's pitched you this and said you can sell your asset first and get this stream of income and spread out the taxes love it I love installment sales just be careful with the person that's pitching this and what's a percentage of the sale that doesn't need to happen we don't charge percentages of your wealth to do the work how these people think that's okay and this value billing of well it's two percent of the value and that's your deferred no it shouldn't be more than five grand for a basic trust a deferred sales I can draft a deferred sales trust is these companies that think they've cracked the code and want to charge the percentage so be careful with that one sorry man I forgot to bring that one up but um just get a second opinion if you're something weird as you can see because we get on some of these um points and some of these trusts that we run into and and you know there's a lot of um you know Sparkle and Pizzazz and pitching and selling of all these unique exotic trusts I'm just telling you smart people the people that real well do not do these very rarely are they doing these you've got to start at the foundational trust which is your revocable trust and get that done you got tens of millions hundreds of millions of dollars let's talk about some of these other trusts that you might do in certain limited instances even then you might not do it okay yeah so um for those of us between about less than 20 million married 10 million just focus on getting your revocable estate plan done avoiding probate getting a say in how your assets are going to be distributed upon your passing building a legacy and not a train wreck for your family after your passing and having a plan for it that's what we're going to try to hit in the next few weeks as we go through this we'll talk about the creative Provisions I love that one we've got some great ones we have a whole list by the way when you're doing a state plan with this of just creative options we've seen clients do that we've to give you some ideas if you're like man I don't even know we'll hit that in the podcast episode what about health care and financial Powers of Attorney one of the things that happens in your later years and this is super common now I've seen it with my own parents is you need to use these Healthcare Powers of Attorney these Financial Powers of Attorney a living will if someone needs to be pulled off life sustaining or support I just had a friend last week that had to do this with their own children actually and so we see these things that come up in life and these are some other things that are part of this state plan because it's not just a trust there's other pieces to it that we take care in the same process great great Point um okay if you have questions about this uh please go to mainstreetbusinesspodcast.com you can get over there all in submit a question and choose the estate planning topic we have different there's like five categories for questions focus on the estate planning that's where we're going to go with that um uh culminating q a podcast as part of Legacy month and I'm going to go inside Inc my estate plan and go out and surf in these shark infested waters and just call it good so I do have a buy sell agreement you know in place in case he dies just so you know that's another thing by the way you got business partners and stuff I just hate to keep dropping this these ideas out there but you need to have a plan there and you might need a separate Buy sell agreement make sure that's coordinating your state plan too so all right that'll be that'll be coming we're going to hit it folks thanks everyone have a great uh week and we hope to see more of you please share this podcast give us a five star review if you find it helpful and we'll see you next week

Channel: Mark J Kohler

Views: 7,601

Keywords: tax, legal, entrepreneur, asset protection, wealth building, cpa, attorney, lawfirm, Mark J Kohler, Mark Kohler, Crypto, Bitcoin

Id: A3L9Quhhjy0

Length: 26min 28sec (1588 seconds)

Published: Tue Jun 13 2023