Transcription
Protecting your assets, flying under the radar, and making a butt load of money happens to be one of the most important things for entrepreneurs, especially entrepreneurs that are getting into real estate or entrepreneurs that are acquiring assets. But it seems to me like the biggest conversation around acquiring assets and protecting yourself is, how do you make sure you're doing it correctly? And do you get everything to be owned by your trust, including all your LLCs, your family, your kids? How do you make sure that you're flying under the radar, you're being anonymous, and that you're protected from creditors getting into your state?
My name is Carlton Dennis. Welcome to Taxes Made Simple. And on this channel, we go over hard, complex tax matters, and we simplify things so every single person that's out there can be able to learn how to leverage the tax code, build wealth, because the government and the rich keep information behind closed doors, and it's my job to make sure you have access to that.
Now, asset protection is probably one of the most vital, important things that you can focus on as you're increasing your wealth and building an estate. But many people are unsure of how to make sure that things are being owned by their trust, or whether or not it makes sense for things to be owned by their trust. Look no further than this video. In this video, I want to go over the exact importance of the trust, how you're going to leverage it, and how you're going to make sure that you're allocating items underneath your trust to build wealth correctly. Make sure you stay all the way until the end of this video because, like many of my other videos, I'll be giving you one important piece of information as it pertains to trusts that'll make a big difference in your overall bottom line. Without further ado, let's get started.
Alright guys, I'll be honest with you. I get asked this question all the time. Carlton, how do I make sure everything is owned by my trust? I want to fly under the radar. Do I need to set up a beaded? Do I need to set up an irrevocable trust? Do I need to set up a revocable trust? Should I set up this dynasty trust since I went to this convention and I learned about how this trust can own this trust and own this trust? I'm gonna be real honest with you guys. If you follow me and you're on my channel, my job is to make sure I'm guiding you without overpaying for things that you do not need. And to be completely honest with you, being in my position, I have seen so many taxpayers come into my office, this was like previous to COVID, sit down with and try to explain all of these expensive trust structures that they set up for hundreds of thousands of dollars, by the way, and none of it is needed and none of it's useful for them.
So, what I want to do today is I want to break down how you can develop a trust structure correctly, what the phases are to get into the right type of asset protection for you and your family, and how you can approach this with the right type of mindset. But if you're watching this right now and you already have all these different trusts set up, I don't want you to be discouraged. What I want you to do is I want you to lock in on this training because this could help guide you to figure out how you can utilize your trust structures to the fullest extent. Let's dive in.
Alright guys, let's jump into phase number one, and this is probably really the most important phase. Phase number one is income generation. To be completely honest, most people try to put the cart before the horse when it comes to asset protection because they're watching a lot of information online, they're studying YouTube videos, they're going to different conferences, and they learn from different gurus or specialists that they need all of these different trusts and a backflip in Nevada and make this thing own this thing. I want you to understand something. If you have not solved the income problem, you do not have an asset protection problem yet. It seems to me like most people are kind of doing things backwards, where they want to start off with, "Let me go set up all these structures," but they haven't even learned how to make income yet. If you're still in phase number one, there is nothing more important than you securing the bag. What do I mean by that? Developing consistent revenue without worry, having over six to nine months emergency save funds that are honestly funds you would never even touch because you have extra funds on top of the savings funds. But if you have not solved income generation, phase number one, you should not be focused on asset protection. You should not be trying to set up all of these complex trusts because you will know in your heart of hearts that there is nothing more important than making sure you can eat and pay your bills. This is one of the most vital things you can do from an asset protection space is make sure that you have income coming in so you can eventually have assets.
Which leads me into phase number two, asset accumulation. As you start to grow as an entrepreneur, you start to grow as a W-2 taxpayer, you're going to start to diversify your portfolio. You're going to want to have some of your money parked over into the ETFs and the stocks and stuff like that. But then you're going to be like, "Dude, I want to get some real estate. I want to get a primary residence. I want to get an asset." As you start acquiring assets, this becomes the next step in your income generation phase and your asset protection phase. One of the most important things that you can do is take the hard-earned income that you're earning every single day and to park that income into something that's going to make you more income. Hence why I speak on real estate more than any other investment vehicle on this channel because we get depreciation plus appreciation and principal pay down. Carlton loves the trifecta. But here's the thing. If you are ready to start building out this huge truck structure, I want you to understand something. This is not as important as you getting into assets. You know, when I'm trying to put together a tax plan for a taxpayer, one of the things that I'm looking at is, does this taxpayer have assets that I can leverage to offset their W-2 income? Does this taxpayer have assets that I can leverage to offset their 1099 income? I'm not really at that point in the conversation where I'm saying, "Does this taxpayer have four different trusts and that trust owns this trust that owns their foundation trust?" I'm trying to get the taxpayer to accumulate more wealth and accumulate more assets. So if you're in asset accumulation mode, this is where you actually need to discipline up. A lot of people get stuck here in the asset accumulation phase because they start losing focus while they're accumulating assets. They start getting shiny object syndrome and think that they need to go jump into this conference where they need to set up this Nevada trust that owns this trust that owns this trust while they're still in asset accumulation mode. What I recommend is to make sure that you at least get to 1.5 to 2 million in assets accumulated before we start shifting the conversation around to say, "Hey, I want to start protecting these assets and making sure that they're allocated correctly."
Which leads us into phase number three, asset organization. If you have already accumulated assets, the conversation now becomes, how do I make sure that these assets are being allocated correctly? You see, when I'm working with many taxpayers, I like to make sure that they're utilizing the T formation structure, and this is where we start to invite in the trust. The reason why is because I'm able to start to see that they actually have been able to diversify from just having operations like W-2 or 1099 income and they start acquiring assets over here on the right side of the table, such as rental real estate. Anytime we start acquiring assets in combination with our operations is when we start to invite the trust into the conversation to start to own these assets that you are acquiring. But here's the thing. What ends up happening, and I'm just going to reiterate this, is too many taxpayers get lost in all of these different videos and information that they see online telling them to set up so many complex structure pictures. I want you to understand this. There is nothing more important than just having a basic revocable living trust. When you run into 99 of all millionaires, you will find out that they have a basic revocable living trust. Sure, some of them will set up an irrevocable trust. Sure, some of them have stocks sitting inside an irrevocable trust or life insurance policies. But a majority of them will establish the RLT, the revocable living trust, before any other entity structure is established. This revocable living trust, when you go to set it up, is so important for you to make sure that you're allocating your assets into the revocable living trust. Which means if I have an asset such as a rental property that's sitting inside of an LLC, I want that rental property owned by the trust. If I have a syndication that's sitting out there, I want my syndication investment interest owned by my trust. The reason why I want to do these things is because a trust is under contract law, different from IRS law. All that means is what's written into the contract is what exists, which is part of the reason why attorneys are sitting down with you, helping you create all of the information that you wish to allocate into that trust and how you wish to disperse those assets to beneficiaries, AKA children, when you pass away, or a husband or a wife if something were to happen to you. But here's the thing, trusts cost money. They're typically going to cost you anywhere between $2,500 to $5,000 to set up, and you're gonna need to file the tax returns depending on what type of trust you have. So if you're somebody that hasn't accumulated income and accumulated assets, you're not in a place where you can do asset organization and to get your trust to own your LLCs that own your investment properties or your trust to own your S corporation where your operational income is coming in from your self-employed business. This is why there are phases to asset protection.
Which leads me, honestly, into the last phase, phase number four, estate planning structure. When it's time for you to start doing estate planning, the reason why estate planning will become important to you is because there is a concept called estate taxes. Now, many of us don't worry about estate taxes because we're so focused on phase number one. Carlton, I'm just trying to make income and pay off my bills and then get to a place where I can accumulate assets. But then you get to phase number two where you're doing all this asset accumulation and you start to become curious and you're like, "Dude, I want to protect stuff. I want to ride under the radar. I don't want my name out there. I don't even want people to know where my address is." So then you start doing asset reallocation. You start shifting assets into LLCs that are in particular states that don't require your name and information to be online. And then you go and take the extra step to get the trust. But here's the next step. After you've gotten the trust to own your LLCs and your S corporations and everything's flowing into the trust, the next step is your estate planning strategy. The reason why your estate planning strategy is so important is because the IRS has rules around who is going to pay estate taxes based on how large the estate has grown. You see, once your estate has capsized over $11 or over $25 million, you are going to pass on an estate that is going to end up resulting in taxes for your heirs. Your heirs or family members may not know how to deal with the taxes associated with your estate. So you might take it upon yourself in real time while you're alive to figure out how to allocate income and assets along your estate to be able to reduce your estate tax since you know that there's going to be taxes for your heirs who inherit your properties.
Guys, listen. As I talk about this, I can feel some of the words coming out of my mouth that when I learned this information for myself, I am the type of person who is so antsy. I want things done yesterday. If somebody tells me I need a trust, I'm gonna set it up tomorrow. If somebody tells me that asset protection is important, I'm going to get the LLC tomorrow. But here's the thing. I want you to understand there are phases to attacking this so you don't get burnt out, so you don't end up overspending money, and so you don't get discouraged on how you build wealth. You see, the rich entrepreneurs have all of this information. Those who are sitting on billions of dollars, they can pass on this information to their children. But I am here today to give you this information and to give you a phase-by-phase process on how you can build out your estate planning without costing yourself hundreds of thousands of dollars or preventing yourself from being able to grow the estate that you want to grow for your family or your heirs.
At the end of the day, all that we're working for, guys, all that we are working for, all of us, we're working for time. We want to have more time with our family. We want to create more memories. We want to spend more time with the people we love. It's not about all the luxuries we can buy. So being able to do this correctly will allow for you to create the time for your family and the time for your family's family to live the lives that they dreamed of.
Guys, listen. My name is Carlton Dennis. If you like some of this information, I'm going to ask one thing. Go ahead and sign up below to get your ticket for the Tax-Free Wealth event. It starts August 1st, it'll go all the way through August 5th. If you have any questions around how to get your trust to own your operational companies or to own your LLCs, I am going to do a full training on asset protection and asset allocation to show you how you can get your assets properly underneath your trust to avoid taxes and to remain anonymous. This is something I pride myself on and I want to be able to give you that teaching. The tickets are only $300 for VIP and $100 for general admission. If you're on VIP, you will be able to spend additional time with me where we get to talk and I get to learn more about your situation. If you're general admission, you're pretty much just saying, "I want to be a fly on the wall and just watch all the videos and be there for the actual training." I'm encouraging to sign up for VIP and I look forward to seeing you August 1st. Everybody else, I just want to say thank you so much for making it to the end of this video, and I'll see you on the next one. Cheers.
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