Trusts are used for personal planning and hold personal assets. Business entities such as corporations, partnerships, and limited liability companies hold business assets. Many families own a rental property but fail to view the rental house as a business asset because they do not view themselves as operating a business. This is unfortunate because business entities offer many advantages, which Darol discusses in this episode.

Trusts are similar to limited liability companies because the trust is able to protect assets if drafted correctly. Learn the three most important benefits of trusts that hold your family’s wealth.

One of the missions of the BoomX Show is to help improve people’s legal literacy, their financial literacy. Today, I will answer the questions of a young family leader who is building an estate plan, an asset protection plan, and his questions about tax.

How do I give a gift to my surviving spouse in order to avoid not only estate tax, not only capital gains tax, but also protect the assets against the possibility of high unreimbursed medical expenses? What is a credit shelter trust? How does that differ from a spousal protection trust and what is a QTIP trust?

Do you own a timeshare? Want to know what it is, how to get rid of it, how to transfer it as part of your estate? I’ll answer that question in today’s episode. I will also dive deeper into trust law. We will talk about what a trust is, the job descriptions, advantages and disadvantages, and trust, or trustee beneficiaries involved with a trust. And I will answer a very common question, should I choose a professional trustee or should I choose a family member to be responsible for administering my family trust?

Larger estates face the possibility of paying a death tax. This tax erodes family wealth and the tax rate is much higher than many other types of taxes. Eleven states impose an estate tax of their own and the size of the estate that is taxable under state law is much lower.

Learn what you can do to reduce your estate tax bill and avoid unnecessary taxation completely in many cases. Darol will also describe the most generous provision of the tax code and how you can use it to avoid all capital gains tax.

In this episode, we bring you inside Office Hours as a family leader asks BoomX Show host Darol Tuttle the best way to protect his estate for his children from a prior marriage while providing for his surviving spouse if she should die first. Learn how a Spousal Protection Trust works, reduces estate tax bills, and preserves the estate from Medicaid liens. If you are confused about how trusts work and when they are created, this is the episode for you.

The new year began with a tragic event, which occurs in retirement far too common and is completely avoidable. BoomX Show host Darol Tuttle tells the story of two actual events that occurred to retirees, sets the context by laying out the phases of retirement and alerts listeners to the risks of each phase. It is true that some mistakes have dire consequences and are even life-threatening, but there are ways to mitigate the risk of making this mistake. Join us and learn which legal document is necessary to protect yourself and your family.

Free members of the BoomX Academy are automatically enrolled in the BoomX Show: Laws of Money podcast. The course adds enhanced content to most podcast episodes but in a module-based format sequentially. The first lesson in the companion course defines the often abused term “estate” and its use in the tax, bankruptcy, and probate codes. The second lesson points out the real property is different than real estate. Further, personal property is the only other category and includes tangible and intangible property. Did you know your voice is intangible personal property and may have value?

This episode introduces you to the legal construct of a “trust.” Trusts hold personal assets and business entities, e.g., limited liability companies hold business assets. Darol explains the difference as well as the structure, use, and benefits of a trust. This episode is an example of the companion course’s enhanced content so you can decide if a deeper dive into legal literacy is for you.

Downton Abbey, the PBS show about a British estate in the early 1900s, opens with a complex but fascinating estate planning problem. The owner of the estate, Lord Grantham, wakes up to the usual household activities only to learn that the qualified male heirs to the estate perished with the Titanic. Without lawful heirs, Lord Grantham faces the possibility that the estate, referred to as “Downton”, may revert back to the Crown or convey to distant, unknown family members.

Within the BoomX Academy, members ask estate planning questions in live office hours weekly. Tying the two together, Darol breaks down the archaic asset transfer rule that hindered Lord Grantham and uses it as a backdrop for ways to avoid the problem for the benefit of modern families in the current era. What is a lifetime beneficiary? What is a remaindermen or a “residuary beneficiaries”? These questions originate in British common law but modern trust techniques provide a better way, a way that protects privacy, reduces uncertainty, and even reduces tax erosion.

In this episode, we will be talking about ways to create the family bank, why it’s important, the benefits and the job descriptions attached to the family bank, which is an irrevocable non-grantor trust, which will protect your assets.

Join Darol and special guest, Michelle Mendoza as they banter about the purpose of the new tax bill and ways to protect your retirement dollars by investing in a way that leverages the most important deductions. In particular, learn which provisions might impact your wealth and the hidden gem of the estate tax code might save your estate from paying any capital gains tax.

A legal secret is a principle, construct or strategy that is obscured intentionally or negligently. These legal secrets can make a difference once revealed and, in some cases, mean the difference between wealth erosion or protection.  As part of the asset protection series, asset protection attorney and your host, Darol Tuttle, introduces listeners to the basic purpose and features of a true asset protection plan and his commitment to revealing all legal secrets that obstruct this goal. 

This episode marks the first of 30 daily episodes to help listeners build a true asset protection system. Published on the same date the host’s home state issued a quarantine, stay at home order, the episode describes the emphasis on publication of reliable information rather than perfectly produced podcast episodes.

Learn how medieval lawyers devised the first asset protection trust to save the estates of England during the bubonic plague and how this legal construct still exists today.

This episode introduces young business leaders to the basic requirements of a contract, focusing on the legal requirement that a contract must have a meeting of the minds between the buyer and seller as to material terms. Price is a material term.

Comparing real examples of a sales process when the host solicited advice from two different “business coaches”, the episode makes the case that understanding the laws of contracts also bring integrity to your business and will help build a loyal following.

This episode is a legal update with a higher view of planning to include three necessary philosophies of wealth planning to help you make the appropriate decisions. The episode describes the 2020 Secure Act but in the context of estate planning law, dating back to British medieval common law, three other important legal changes in the preceding five years and the new reality of planning with retirement accounts. This episode introduces you to idea of “workarounds”. Yes, that’s right! We can mitigate the negative impacts of the SECURE Act.

On December 20, 2019, President Trump signed the Setting Every Community Up for Retirement Enhancement Act (SECURE Act). The SECURE Act, which is effective January 1, 2020. The SECURE Act has several positive changes: It increases the required beginning date (RBD) for required minimum distributions (RMDs) from your individual retirement accounts from 70 ½ to 72 years of age, and it eliminates the age restriction for contributions to qualified retirement accounts. However, one provision of SECURE nullifies all of the benefits of the act and is a threat to your family’s generational wealth. That is a bold statement, I realize. I stand by it.

The SECURE Act does provide a few exceptions to this new mandatory ten-year withdrawal rule: spouses, beneficiaries who are not more than ten years younger than the account owner, the account owner’s children who have not reached the “age of majority,” disabled individuals, and chronically ill individuals. However, proper analysis of your estate planning goals and planning for your intended beneficiaries’ circumstances are imperative to ensure your goals are accomplished and your beneficiaries are properly planned for.

Most people do not care enough to spend time let alone money on taking specific actions to adjust their plan, if they have one, to account for the changes brought to us courtesy of SECURE. Perhaps, there is nothing wrong with this attitude. If you view SECURE from the perspective of the government, it makes sense. Too much money is being protected for the benefit of families and not taxed. The government and even the economy is better off to get that money back into circulation.

However, I doubt that people decide to pay unnecessary taxes, fees and stand idly by as wealth is lost because they are on the government’s side. During most of my career, I thought this attitude, that action should not be taken to avoid a financial loss, was just a mental hiccup, a cognitive bias that prevents some people from making correct decisions about wealth. However, as I have grown in my profession, I now see that it is more related to one, of three, philosophies about wealth. Unfortunately, the attitude that is passive about protecting wealth is the traditional and, therefore, prevalent model. The reasons it is traditional is all about human longevity. Throughout all of human history, humans have lived short lives. In the Middle Ages, when probate and trust law invented, men lived, on average, to be just twenty-five years. That average age was not doubled until the early 1900s, over a thousand years later. However, in the last century, the average life expectancy of an American male has almost doubled again. Biologically, there are more opportunities and different challenges than the current perspective of the Law even realizes.

The law is reactive, not proactive. As such, the traditional model has only sought to pass wealth from an asset owner to the next generation because the asset owner would live a short life as would the next generation. Life has been so difficult in terms of survival, the Law has simply left it at that. As such,

There are three models in planning, the traditional model is estate planning and views life and, therefore, wealth, as short. The other two models do not. I will refer to these models often and you should always think in their terms because the model you choose will require actions specific to that planning model. If you view the purpose of your money as a simple, outright transfer to the next generation, then estate planning is your swim lane. SECURE Act is not a threat because the estate planning model is not focused on the protection of wealth beyond just your lifetime. However, if you view wealth as the means by which you plan to empower your family for more than your life plus ten years, then one of the two other models are applicable to you.

THE THREE MODELS OF PLANNING

Estate Planning

The objective of estate planning is estate transfer. The word “estate” is a legal term that refers only to the assets once owned by a now deceased person. The Law is reactive, not proactive. Therefore, traditional estate planning limits its objective to the transfer of assets of a person to either a spouse or the next generation in a limited way.

Asset Protection

The objective of asset protection is different. Asset protection, as I define it, includes all of estate planning but has the focus is on the protection of assets while the assert owner, his or her spouse are still alive. The trigger event for estate planning is the death of the asset owner. The trigger event of asset protection is now!

Generational Family Wealth Planning

The objective of family wealth is to strengthen a family around a set of core values and a vision for the future. The assets of a successful family finances the family using all of the tools of estate planning and asset protection but the time horizon is seven generations. There is an entire course dedicated to the devices you used to this model.

Law and money share a common characteristic. Neither can be found in the material world. A dollar bill can be touched. However,  a one dollar is exactly the same as a one hundred dollar bill except for the number 1 and a picture of Washington as compared to the number 100 and a picture of Franklin on it. The hundred dollar bill represents a much higher degree of some unspoken value but is physically the same as the item that represents far less. What exactly is money? Listen to the answer to this question as posed to an elite wealth attorney, as interviewed by BoomX Show  host, Darol Tuttle. The conversation between the two reveals legal secrets that will give you a bigger picture of your wealth.