EP 53 - Estate Planning for High Networth, Real Estate Investors & Entrepreneurs w/ Jaryd Green

Estate planning, often overlooked, is crucial to mitigating the potential for hefty tax impacts, with possible taxation reaching up to 40% of one's assets. In this enlightening episode, we join forces with Jaryd Green, a renowned expert in real estate investment and asset protection, to underscore the critical nature of estate planning for high-income individuals and entrepreneurs. Jaryd advocates for initiating estate planning strategies as early as age 18, exploring the protective measures of utilizing LLCs and trusts against the unpredictabilities of life.

We delve into how a deep understanding of estate planning intricacies and business configurations simplifies the complexity of FinCEN regulations. Jaryd addresses the widespread misunderstandings surrounding asset transfers, spotlighting the strategic application of trusts to achieve tax advantages, and discusses the specific challenges posed by state taxes and business planning. This episode is packed with tailored strategies for navigating the complexities of LLCs and trusts effectively.

Further, we examine the dynamic landscape of estate planning, touching on anticipated adjustments in federal estate tax exemptions and introducing strategies like the step-up basis benefit, adept gifting practices, and the strategic employment of irrevocable trusts. Whether you're contemplating an irrevocable life insurance trust, exploring the concept of pour-over wills, or aiming to refine your estate planning, our dialogue with Jaryd delivers the insights needed to ensure your planning is as strategic as it is customized to your unique legacy and wealth preservation goals.

To learn more form Jaryd, email: Jaryd@basattorneys.com
And if you're interested in becoming a client, go to www.markperlbergcpa.com

Transcript

Speaker 1: 0:00

Everybody welcome to this live conversation and those of you listening to the recording get on our mailing list so you get, at the very least you get, invited to our Live conversations. And I'm super excited to be joined by Jared Green. We're gonna riff on tax planning and the state planning for real estate investors and other people in our demographic who, off Often real estate investors, also tend to be high-income earners and entrepreneurs. So we're gonna we have some you guys can answer ask your questions live. We're gonna just talk about a little bit and type your questions in the chat or raise your hand. Everybody's in the meetup format so you can ask your questions.

Speaker 1: 0:41

So, jared, first let's start off with you. Well, actually, before we get into this, for anyone who's interested in using our services, obviously go to mark at mark pro Sorry, go to mark pro brick CPA comm. You'll see a link to sign in for an intro call or to fill out an application to see if you're qualified as a client and also send us talent. We're always hiring. Please, even if you don't qualify, you send us a client. I'll make it work. So find us some talent or you or someone you know wants to join our team. You'll find a link to apply at mark pro brick CPA comm. All right, let's get into it. Jared, introduce yourself in 60 seconds or less.

Speaker 2: 1:22

All right, I'll do it even less than that hopeful. So I'm Jared green, I am an attorney Look in and Duluth, georgia, it's my main headquarters. I'm actually border raised in Gwinnett County, georgia. I'm licensed to practice law in Georgia, alabama and Tennessee. I often have clients that are across state lines and so I have to be prepared kind of across state lines from time to time, but it doesn't necessarily mean I can give a legal opinion in those states. Those are just the three states of license. Then, as stated, I'm a.

Speaker 2: 1:51

I'm born, raising Gwinnett County, georgia, been here all my life but the University of Georgia undergrad go dogs and you know I love helping small business owners. I love helping families. I love helping those people that you know feel like they're in a solar print door Entrepreneur just getting started. They're not sure what questions to ask, they're not sure who to put on their team. Do I need an attorney? Do I need to CPA? The answer to most of those questions, most of the time, is yes, and I value myself as one of those members of those teams for my clients and like to partner with people like Mark, who you know they're part of your bigger picture team to help meet all of your financial future and you know Protection goals, so to speak. So I value myself as a what I'd say like a protection expert, but transactional attorney real estate closings, a safe planning and business representation.

Speaker 1: 2:44

Okay, great now for anybody listening in. I'm gonna ask some basic, high-level questions here, and we have until 1145, so I want you to to either ask your questions and your chats before you go live or raise your hand so I get a feel for how many questions we have from the audience before we jump into the audience questions.

Speaker 2: 3:03

But let's talk about First let's talk about some of the very basic things here.

Speaker 1: 3:09

You can you tell us about what should? Well, when should we start thinking about estate planning?

Speaker 2: 3:20

The day you turn 19 years old now 18 years old. Really, it shouldn't be Delayed. I think people are scared to start thinking about their estate plan because they fear their own mortality. They fear those types of questions. What I like to tell people is it's not, it's not Necessarily something you can put off because you don't know when you're gonna need the planning in place. So every day you don't have planning done is a day that you're kind of just rolling the dice, frankly, and so I would say the sooner the better.

Speaker 2: 3:57

It doesn't have to be something robust, it doesn't have to be trusts that own other trusts you know crazy right away. But just a basic will, basic, our of attorney, basic health care directive. Start with that Branch on, as you can make things more complex as your life changes. But those differences happen routinely. You know your, your kids, you grow up and you want to add them or change them to be your Executor, and so do your friend. Little things like that as they happen. It should be looked at, but at least every two to three years.

Speaker 1: 4:31

Oh, great, now for our. Let's talk about some common Misunderstandings and mistakes that people are making, especially with our demographic, which is high-income earning, real estate investors and entrepreneurs.

Speaker 2: 4:45

So the biggest thing right now and is in liability exposure. So most of the time it's well, it's twofold. One is you're in it, you're a real estate investor and you own these properties directly in your individual name. Big problem because if something happens, slip and fall, some accident on site, yeah, you have insurance, but if that person comes after you personally, your personal assets are exposed. So there are several ways to protect those assets. One of those would be using a company structure, so an LLC and I NC, and then another one of those ways is to use a trust.

Speaker 2: 5:23

When I actually like is combining the two. So I do an LLC that is then owned by the trust. So you have a holding company essentially that owns your properties. That's the LLC. And then people are going online and saying that you, you know, your LLC is owned by a trust. That's an internal document that your trust owns that LLC, but it protects you, kind of an additional layer of liability protection. But first and foremost is the LLC and that can be her rental property. But you know, I usually like to do a holding company LLC and then sub LLC is based on if you have a lot of rental properties, to just to kind of separate and segregate the liability in each one.

Speaker 1: 6:06

And this is stuff you start doing now, not not for the purpose of estate planning, also for asset protection. Now here's the question I've been wondering for a while. I think the audience would appreciate this, because we can redo our own research into estate planning until clients about the basics, using trust to avoid probate and some other tax strategies. But when it comes to finding the right professional here because we're not really we're not gonna treat ourselves as though we're authorized to do estate planning and there are certain CPAs who may specialize just in estate tax planning and also there are nuances, state level. So when in California or New York or any other states as far as the exemptions for what you're gonna be paying tax on, or in your state, there's all these new odds, which has led us to say find someone local. But I don't know what the best answer is and I wanna get your answer on for someone who's thinking about estate planning how do they find the right expert, legal expert and resources to make sure they're doing this right?

Speaker 2: 7:23

So I would say that that word should be plural, so it should be experts, especially if you own properties in multiple states. So I have a client that's in New York. He also owns a lot of property here in Georgia. I'm handling his Georgia stuff, but I'm one member of his team that's handling across the board, because I'm not licensed and said to New York. New York has state estate tax, whereas where I am in Georgia doesn't have state estate tax. Now we all have federal estate tax. Those exemptions are set to change at the end of 2025, which I'm sure we'll get into. But for him, he's worried about his New York state tax exposure because he has a lot of assets up there and so he has a New York attorney. He has a Georgia attorney.

Speaker 2: 8:07

It gets very expensive very quickly when you start adding experts, but what I'll say is, most importantly, whether they're local, whether they're national, is you need to be able to be with somebody you trust. Spend some time, don't hesitate to vet people, ask them questions, have meetings with them, have multiple meetings, ask multiple questions. You should feel fully comfortable, because the last thing that you wanna do is you know, oh, I just need to put something together, I don't care. Well, you want these documents to be with you for your life and you want to be able to change them as needed, revise them as needed, update them as needed. And that's the most important thing is finding people on your team that can grow with you. Probably not somebody that's 90 years old and is about to stop their law practice. That's probably not who I would recommend. Someone that's your age or close, has enough experience, you feel comfortable with our expertise, but someone that can kind of grow with you. That's the most important thing.

Speaker 1: 9:09

Okay, great, because you know, because I know that you would be qualified to advise on the federal level of any issue. So let's say someone's listening here and they're in Ohio and they really like some of the stuff you say, but you're in Georgia. You talked about Georgia, alabama, tennessee. Do you think that you, if they're situate, does it depend on the situation or would you be able to help someone in Ohio with moderate level of complexity? Or is there a scope of complexity where you say, okay, you need an Ohio specialist. How does that work for someone a little bit outside of your territory?

Speaker 2: 9:44

Yeah. So as far as somebody actually so drafting the documents themselves and signing the actual estate planning documents, I'm only gonna be able to do that in the states of the license set Now. But if it's something where you want me on your team, you want me to ask certain questions simply because you don't know the questions to ask, I'm happy to be an asset in that realm. It's just can I get a legal opinion or not? Do I have ENO insurance that protects me for malpractice, things like that? So that would be. If it's somebody with only Ohio assets, they're gonna wanna get an Ohio attorney. But I'm also happy to ask that and starting questions Like if you trust me more, I would rather you ask the questions through someone you trust that can convey that to the proper entity.

Speaker 2: 10:29

I engage other attorneys all the time. To me it's not a competition, like I want more attorneys rather than less, I want more CPAs rather than less, I want more financial planners rather than less, because I'm a team person. So like that to me is, the most important thing is that you, the client, you the customer, get fully and properly taken care of. So Right.

Speaker 1: 10:50

So you may have an instance where you're advising on it, but then you leverage an attorney at a local office You're not even authorized to practice in that state to write those documents. That's right. Okay, great. Now, before I jump into some more questions, I wanna see if anybody in the audience you can use the icon or just put your hand in front of the screen or raise your hand with the icon. Does anybody have any questions? You can raise your hand and we can get to some audience questions. Hey, we got anything in the audience, all right. Well, we got a decent sized audience, but that's all right. You can when you're ready. You just let me know when you wanna talk. One person asks for your contact details. You just post that in the chat, yep.

Speaker 2: 11:34

I will do.

Speaker 1: 11:37

So let me share with you some of the things. So let's talk about some of the basic stuff that people should know about. And now here's an example where state planning and asset protection planning is somewhat is well aligned here. So one of the challenges we see is, when there is no planning, you have an issue with probate, which is a long and painful process, an expensive process, and we can avoid this by putting the assets just as you've described. If the assets are owned by a revocable trust, which is what we typically use, because irrevocable trust introduce new layers of complexity and it will maybe eliminate some of the tax benefits of real estate, but we put our stuff in a revocable trust and that helps us make passing on our assets to our heirs more effective and more smooth. So what are some other key things that some of our audience should be thinking about?

Speaker 2: 12:42

Yeah. So one big thing is if you have business interests, those are personal property interests, at least in the state, time and at death. Meaning if you don't have plans for those business interests, they're gonna also go through probate. So if your shares, your membership units are not in the trust, for instance, those could be exposed and have to go through probate, which is a problem. As you mentioned probate, the biggest thing is not just the cost.

Speaker 2: 13:10

I would say it's actually more expensive to have to go through probate for your heirs and beneficiaries than it is to actually set up irrevocable trust. So why not do the trust? But really it's the time it's. You know I've had nightmare probates that last eight, nine, 10 years Wow, before assets can actually pass. That is crazy and it's also it's not up to you at that point. So I look at trust as the ultimate tool to bypass the primary process, but really for privacy. I think a lot of people have misconceptions. They think trusts are only for very wealthy people or they're very hard and difficult to manage and maintain, and it's just not the case. They're very straightforward, they're very private. Nothing gets filed publicly and that's one of the biggest benefits to trust is unless the state law requires that it be filed somewhere. It isn't, and that's also you know, I don't. We're not, probably won't get too far into the new FinCEN rollout.

Speaker 1: 14:09

FinCEN the up business.

Speaker 2: 14:10

But we can talk a little bit about it. You know, there's this new very draconian law that got went into effect January 1st of this year where all existing LLCs, corporations, all business owners, have to report their beneficial ownership information with a federal government agency, which is FinCEN. So financial crimes enforcement, their sub-department of the US Treasury, and for new businesses, new entities created this year forward, they have 90 days from when their business is created to file these forms and then for any existing business, they have one year from January 1st. So they have it until the end of this year For some of my clients.

Speaker 2: 14:50

I'm telling them hey, if you want to roll the dice, there's a lot of legal challenges nationally right now against FinCEN. There's a lot of groups that are suing them saying, hey, this is unconstitutional. You know I'll not say my personal feelings about constitutionality. I'll just say that you know there are opportunities to roll the dice a little bit and wait and see what happens with some of these court cases before you actually file and send your photo, government issued ID, your EIN and central security number, all of your mailing and forwarding address, all your information out there, and you're putting out on this supposedly private, you know, protected government database. So that's a little bit disconcerting for people.

Speaker 2: 15:31

The penalties for not filing right now are, listen, $500 a day or up to two years in federal prison, which I don't think anybody wants. But that's one of those biggest things right now is looking at how your business interests are going to be treated at death and including your business interests in your actual overall estate plan. I think people forget about it. They think, oh well, you know, my business will just pass to either my partner or my spouse or my kids. But if you don't direct it, it's not going to pass just willy-nilly. You have to actually direct where it's going to go. They need to plan for that, okay cool.

Speaker 1: 16:08

Well, we have a question from the audience, and that question is is there a disadvantage of having a trust? A disadvantage of having a trust.

Speaker 2: 16:21

Not really, especially not during your lifetime, because a revocable trust. You're not going to be treated differently from a tax perspective. You're going to be taxed at your individual rate, the same way you would be if you didn't have a trust. It's just in addition to your regular return, so there's not a ton of overhead in terms of administrative or complexity. If you did have something where you got really complex, you can always put a corporate trustee in place. In Georgia we have what's called a trust protector as well. That can be a separate entity where, if you felt like a trustee was not able to do their job all the time, you could have a corporate trustee as well that comes in and is a fiduciary on behalf of your trust.

Speaker 1: 17:08

So we have a lot of clients in Tennessee and one of the challenges is Tennessee franchise, an excise tax. So when you have an LLC they penalize you for it. So we're exploring the possibility of using a trust in Louisville Seas in certain situations being here in Tennessee. We'll have to maybe chat about that offline and see that it'll help satisfy the rest of the protection goals and in the franchise East base.

Speaker 2: 17:33

So I represent a lot of franchisees. I have franchise clients all over the country, which is why crossing state lines is always the forefront of my mind. It's like, yes, I'm counsel for this company and it's based in Georgia, but they're buying six new stores in Indiana. So what should we do about that? The biggest thing with franchises is you're having an additional layer of franchise controls. You know a franchise or that you're gonna have an FTD or an Abbasore development agreement in a franchise agreement that's going to dictate hey, at death. This is an immediate default under the franchise agreement If you've died, you don't have a will or a trust in place or it's not clear. You know you have four partners, for instance, and everybody's 25% and everybody's. You know the approved franchise, a franchise LLC. What happens if one partner passes away? So a lot of franchises that's built into their structures. That's an immediate default under the franchise agreement. Big problem, big red flag.

Speaker 2: 18:30

So what we like to do is at least in the holding company side. So if I have a group like that, like I have a lot of restaurant franchises, what they do is they'll have an operating company. And if they're not, this is if they're not owning real estate most own real estate and the operating side. But in the operating company what we'll do is we'll have their LLCs. That's like their personal direct LLC, that they're either a single member of them and a spouse that will be the actual member of the overall franchise holding company. That's the approved quote, unquote franchisee that can be owned by individuals, by trusts, anything else, usually without defaulting on the franchise agreement. But again, that would be franchised by franchise. Specific franchise agreements are not all the same, but they usually run anywhere from 20 pages to 2000 pages. It just depends on how much is disclosed by that particular franchise.

Speaker 1: 19:27

So we were talking about. In Tennessee there's a very unique tax called the franchise and excise tax, and it's not just on franchises, unfortunately, it's on anybody with an LLC. So even if you are a real estate investor or you own a business, as soon as you have that LLC you got to worry about the franchise and excise tax or see if you qualify for an exemption from it. So they pretty much penalize you just for having an LLC. So it's like Tennessee sounds so great because there's no state taxes, and then you find out there's all these. They slip in this franchise and excise tax which can be really painful for some of our clients. So it's not really a tax free state for a lot of business owners, unfortunately. But let's talk about. Let's talk about. We had a question here. So when do we choose between a trust and an LLC? And I imagine your answer is you want to do both. Let me hear your answer.

Speaker 2: 20:34

So I would have an LLC that is owned by a trust and, depending on how many properties, I would even potentially have sub-LLCs that are owned by a managed, better holding company, llc that's then owned by a trust, and I have several different structures and it really just depends on how many layers and how many you know state filing you want to have to go through.

Speaker 2: 20:58

I've got clients that have 60 to 100 companies and then I've got clients that have two, and they are the same size clients, same size revenues, same size property holdings, but the one with two is a lot more personally exposed than the one with 60. So that's kind of where you want to think about it. You can have as many LLCs as you want, but at the end of the day, you still have to be able to manage that comfortably and not just, you know, rely on. Oh well, you know, I think it's just going to pass this way and just assume that it's going to pass a certain way. You should direct it accordingly. So, but my go to is usually going to be an LLC owned by a trust.

Speaker 1: 21:36

Wonderful. Okay, now let's talk about some. We're going to go into some more client questions, but first I want to. We got to geek out on some tax stuff because I'm here.

Speaker 1: 21:44

I'm and so one of the things we think about here is when you are thinking about death or a family member dying, you have some tax advantages. You get the step up basis. You get a set of basis in your real estate, in your partnership and S corp interest, which can really be beneficial and can be wonderful for having future depreciation and mitigating capital gains. You don't get a step up on your C corp stock. So you know, you'll often find people inheriting their grandma stock and the basis is minimal, the cost basis is minimal and it's like pure gain here. But there are some things that we can do to optimize the situation. One is, if you're you know, the simple thing is to do is just, if you're, if you're senior, they're your elder, their own property and they want you to take them over, let them hold onto the property until you can inherit it and get that beautiful step up basis. But some other things you can think about, though, are now I've never done this, but one idea people have thrown at me is giving a percentage share of your business or a percentage of your real estate, or gifting a portion to your, to your elderly, and then you can inherit it again and get the step up basis.

Speaker 1: 23:06

We haven't done those recommendations because that's a little bit of a side of our specialization, but I've heard people discuss the benefits of having those types of assets that'll get a step up basis into their parents' names and then they can inherit it. We haven't read those recommendations. I'm curious to hear your thoughts and then, before I overload this conversation with my own thoughts, another topic of conversation is that once we reach a certain threshold and they are different at federal and state level when you inherit a certain amount of assets, you may pay taxes on it. So you can look at the exemption amount by which you can gift off and start offloading some of your assets to some of the people that are going to inherit them eventually, to prevent that future estate tax event. Now, what are some of the things that you think about and what are some ideas and comments you have on some of the thoughts I have?

Speaker 2: 24:07

Yeah, so the biggest thing is kind of towards that last portion, which I think actually answers the first portion of the question, which is gifting strategies. So really I don't get heavily into gifting until I have a client that's net worth requirements is going to show that they're going to owe the federal estate tax. So federal estate tax exemption right now is over $13 million for an individual, which if doubled to a spouse's inclusion would be over $26 million. That sounds like a lot of money and it is for a lot of people. However, that's about to be more than cut in half at the end of 2025. And so we're in prime time, like if you all are thinking about doing state planning, go ahead and do it before 2025 or get your appointment on the books. You start talking and thinking and drafting and reviewing this, because 2025 for a state planning attorneys is going to be insane, because everybody's going to hear about this, there's going to be a big flood in information, and so everybody's going to be seeking out all these estate planning attorneys all year trying to maximize, because what's going to happen is the estate tax exemption is going to go back down to pre-2018 levels, which was five and a half million for an individual which is going to be adjusted for inflation.

Speaker 2: 25:20

I think not everybody knows exactly what that is yet. My guess is probably like 6.36.4. That more than cuts it in half. That's a big deal because there are a lot of businesses, a lot of companies, a lot of individuals. Maybe they're not going to have 26 million, but by the time all their retirement income, by the time all their investments and everything come to fruition for the entirety of their life, they are going to be around 5, 6, 7 million. And that is going to impact them because the federal estate tax right now is set at 40% of anything above that exemption amount. Wow, why would you pay 40% of state tax on something that you could pass tax-free in a trust? And so the trust becomes that vehicle right. The trust becomes the, not only in my bypassing probate, but I'm also going ahead and I'm putting certain of these assets into a trust. That I'm not necessarily a tax avoidance, but you are protecting the steps on the basis.

Speaker 2: 26:15

Now the questions that I get and you mentioned it briefly at the beginning of the call revocable versus irrevocable. That's when those irrevocable trusts do become a lot more valuable is when you have a dynasty type situation or you have a situation where you know your value is already going to be above that threshold. That's when we start doing these giftings, that's when we start doing annual gifts, we start doing gift properties back and forth. I've got several clients that are already over that threshold. So they're like maximizing their gifting strategy up to that exemption before that exemption gets cut in half, and so that's the part. You know those are much more customized, one-on-one plans.

Speaker 2: 26:57

I don't recommend irrevocable trusts lightly. They are irrevocable. They are a lot less forgiving, they are a lot more strict, they are a lot more complex and so you have to be very careful, like you have to be ready to part ways with that money and not touch that money again. And so it is almost liquid, liquidity-based. If I have a client that's mid-career and they're already at that threshold, yeah, we're going to start looking at the irrevocable trust because they're not going to simply stop working tomorrow. They're not ready to retire yet. They've got 20 more earning years where they're still investing, they're still running their business. So that is where the irrevocable gifting strategies are really coming in helpful. But for right now, yeah, absolutely Annual gifting you can always do. It still goes against your contribution into what you're doing, but you do. I think it's what 16,000 this year, or 15,000, 5,000 or 16,000 right at it.

Speaker 1: 27:53

I think it's around 17,000. But you know it changes every year. So yeah, yeah.

Speaker 2: 27:58

So it goes up a little bit every year.

Speaker 2: 28:00

If you have a bunch of beneficiaries that you want to go ahead and gift, to go ahead and do it, there's no penalty on that. But as far as the larger scope structure that's really the gifting strategies come in, we started talking about irrevocable. Another offset is kind of what's called an islet or irrevocable life insurance trust. So that is a specific irrevocable trust that if somebody knows they're already going to have an estate tax burden, they can go ahead and plan for that by by, by, by by by, by setting up a separate trust that that trust's purpose is really to cover their estate tax burden. So if they know they're going to owe like if they're 50 million that worth, and they know they're going to owe 40% on 25 million because they're over the 26, they're married, we can go ahead and offset a lot of those by setting up an islet that works with their regular revocable trust.

Speaker 2: 28:52

It's not an either or it's a both, and so I would always recommend that minimum revocable trust. Now, really, at minimum will POA advance healthcare. But if you're talking about trusts, then we start adding a revocable trust first and if your net worth dictates it, where you need to get smear with gifting in your end. Then we're looking at dynasty, irrevocable indoor islands, which would be the life insurance.

Speaker 1: 29:16

So you know this is an. This should raise some eyebrows now. So if you don't do a state playing, some of these folks, and maybe some of your parents or grandparents, could be at risk of losing 40% of their assets to taxes. Are we talking about federal? We're not even talking about state yet, right?

Speaker 2: 29:34

Because the state may take just federal, just federal.

Speaker 1: 29:37

So the state may want to take a piece of this too. So this can be, you know, incredibly, this this could really impact your ability to have that generational wealth. And the revocable trust helps out with probate, but to my understanding, there's no real tax benefits when it comes to estate planning with a revocable. You got to put the stuff now in an irrevocable and that kind of times. That serves as a timing mechanism so you don't hit those those thresholds and you don't, you know, have those estate taxes when your heirs receive it correct.

Speaker 2: 30:09

That's correct. Yeah, irrevocable or more that. That's more of the tax planning trust set up, so to speak. Revocable, really, especially during your lifetime. There's no real tax benefit for the revocable trust. The revocable trust benefit is a voided probate and not having a judge or court decide. You know how much money you have in the trust, posting a cost bond or making sure there's inventories done for these companies, and you're sitting in court for four years before the judge says, oh yeah, you're now allowed to deed these properties or these business interests or transfer these assets. No, a trust is just almost think of it like an insurance policy, that's a payout on debt. And I actually add what's called a pourable will into a trust and that's my catch on. So anything that's not titled and you can't do it everywhere, but anything that's not titled into the trust during your lifetime is poured over in your residual rate clause and your will at death, and so it's kind of closing those loops and so we couple a pourable will with a revocable trust.

Speaker 2: 31:14

Now, in places like North Carolina, like I actually have several North Carolina clients. I don't do their North Carolina stuff, I do their Georgia stuff. So they've got properties in both states and there is some of a difference of opinion in North Carolina right now into doing separate marital trust which is like a slag, a spousal life. Those are more popular in North Carolina than they are in Georgia. In Georgia, what we're doing is actually a marital trust, just a single revocable trust for husband and wife as co-trustees and then that trust becomes irrevocable at the death of the first spouse.

Speaker 2: 31:47

In North Carolina there's actually a big push. They're keeping those separate trusts and the thinking there is like you're not, you're just protecting each spouse's share during the whole time. But pre-2018, there was a lot more slats, grats, all those wonderful types of trusts that are. They got popular for a long time. But in Georgia, with the estate tax the way it is, there's no state-of-state tax. It's just better when we're protecting against where we're putting most of these in, where husband and wife or the spouses are both co-trustees of that single trust.

Speaker 1: 32:25

Okay, good to know, so a lot of information.

Speaker 2: 32:28

Sorry, oh no, it is.

Speaker 1: 32:30

And this is a heavy topic, but I think that we're not going to have enough time to really tell everybody exactly all the answers. But at least we know some basics here and certainly that you need to loop in a professional Now. We understand a lot of our audience on the potential risks of not having an estate plan here. So one question we add up here which I think will be helpful to the audiences what are some key questions we can ask? Let's say we're in North, we have someone in North Carolina. What do we ask in a state, a North Carolina state attorney? What questions? Sorry, how do we find a North Carolina state attorney and what questions should we ask them?

Speaker 2: 33:17

Well, the good thing about attorneys is we know a lot of other attorneys, and so even in states that I'm not licensed to that, I'm happy to help you find somebody, happy to connect you with my network of people, and one great place to start is actually with the state bar. They'll have a lot of resources in each state where you can reach out to them and say, hey, I'm looking for somebody that specializes in this type of law. But the other is really whether it's chambers of commerce, whether it's networking groups trying to connect. You know, my advice and I think I mentioned it before is finding that person you can trust is the most important piece. There's a lot of attorneys out there that can all do the same type of just nuts and bolts, actual drafting that I do. What sets me apart, which is what sets all good attorneys apart, is building that trust over time and knowing that as your plan changes and as things you know, I just did one with a couple that moved all of their assets from Maryland to Georgia.

Speaker 2: 34:13

I didn't want to redo their whole Maryland trust into Georgia. They've already operated it for 10 years. They have an awesome you know setup, so but what we did do is. We took everything from Maryland that they had that was good and kept it. That made it subject to Georgia law. Well, that was not a new trust. That was just modifying their existing documents. So it may be as simple as doing something like that, but it may be more complex. You may have to redo everything or do everything for the first time. Never done it.

Speaker 2: 34:41

The number one, though, is finding somebody you trust, and if you can't do that by contacting somebody at your local chamber of commerce or networking group, you know I'm happy to jump in as a resource. Try to connect you with my network of people. I have people all over the country that I love to do business with, I love to work with, because you know I don't really do business with anybody that I don't trust. So that's number one for me. So why wouldn't I advise my clients to be the same? I want clients to build that trust with their person first, know that that person is there for them and there's no stupid questions. So it's not necessarily what questions to ask, it's. Don't withhold your questioning If you think it's pertinent to you and you need clarification. This is your plan, this is your estate, this is your passing on. So you should ask all the questions, whether you think they're stupid or not. There's no wrong questions. There's only right questions in this world.

Speaker 1: 35:35

If we want to move your business property or primary property into a trust, do you have to quickly claim the deed?

Speaker 2: 35:46

You can deed it. It can be a quick claim deed, it can be a general warranty deed or a limited warranty deed. It really just depends on how titles should be passed. The only concern and something that everybody should look at when passing their primary residence into a trust is whether or not they're going to lose their homestead exemption. So if they're getting a big homestead exemption with their primary, they may not want to put that into a trust. I kind of do it both ways. A lot of my clients are higher net worth and so they're not qualifying for homestead exemption anyway. So they go ahead and put their primary into the trust.

Speaker 2: 36:24

And in other states so, like Florida for instance, it's kind of similar to outside of Searong, so there's no state income tax. But Florida is actually a very expensive state to die in because your assets have to go through probate if they're not in a trust. So I actually deed those Florida properties into a direct trust, not an LLC that's owned by a trust, because the LLC would still have to go through the probate process. So really it's just like it's an asset by asset determination, a good probate in the state. A business attorney is going to look at each asset, as. Is this going to be taxable at death? If yes, how do we get it not taxable? If we can't get it not taxable, let's at least get it super protected from a liability perspective. So putting it in an LLC or a holding company, llc that's owned by another LLC, adding layers of protection, is always going to make you feel and it's going to add.

Speaker 2: 37:15

Nothing is ever completely creditor proof. I've seen like one set up and it involves two offshore accounts owned by some island cookage trust and all that. Yeah, lots of fun, but very difficult to manage. Well, the more difficult something is to manage, the more protected it is most of the time. So not all of these revocable trusts are just bulletproof, but there are a lot more than anybody else is doing right now. Protection wise, majority of it's like 85, 90% of people don't have any planning in place at all, so you're already ahead of the game just by thinking about starting to do some of this. The biggest thing is there's no, like there's no perfect starting point. You just kind of start Gotcha.

Speaker 1: 38:07

We have. So we had one question I'll answer. Should it be an LLC or an S corp? And that really depends on your type of businesses, if it's active or passive and you want to also evaluate some other tax planning opportunities or challenges with running the S corporation to see if that's appropriate. But if it's rental real estate, almost never. We almost never put it into an S corporation for capital gains reason and also basis limitation reasons and other tax reasons. We have a question here. You can tell this is from a real estate well, not really just real estate, but should these LLCs be in Wyoming? So we know our biggest are Nevada and Wyoming LLCs. Where are your thoughts?

Speaker 2: 38:58

Yeah, wyoming, nevada and Delaware are the three traditional states where you want to set up LLCs, with this whole things and roll out, it's really not going to matter very much because everybody's going to have to file beneficial ownership. So, if that stands, so yeah, I used to set up a lot of companies that were essentially ghosts, where nobody could find any of the information about the actual owner, but there's no federal law that's dictating that you're going to have to report that. So a lot of the states just got a lot more friendly. In terms of business filings, georgia, we're just as competitive as Wyoming because, like I said, everybody's still now going to have to file this beneficial ownership information form. Okay, but yes, traditionally, like prior to this year. Yes, wyoming LLCs, no issue. I actually prefer Wyoming to Nevada and Delaware.

Speaker 1: 39:50

Okay, great. Well, jared, I know you have a hard stop at 11.45. You could tell that this is not only an important topic, but it's a multifaceted topic. So if you have any questions and you are in the chat, I'm posting this. I just reposted your email address. Why don't you tell the listeners in their cars, who are listening, how they can find you and learn more?

Speaker 2: 40:16

Yeah, so my information is posted in the chat, but it's Jared J-A-R-Y-D. Don't know why my mom decided to spell my name that way, but she did. I didn't have a choice. J-a-r-y-d. B as in boy, a as in apple, s as in Sam, so B-A-S attorneys. A-t-t-o-r-n-e-y-scom. I'm happy to look at your emails and if it's something that requires a little bit more robust Zoom call, phone call, happy to jump on that with you. And yeah, it's been a pleasure to join today and, as stated, I do have a hard stop. I got to get my wife to the airport, so that is the number one requirement. She's my number one client, so I always got to take care of her. It's been such a pleasure being on with everybody today. I really look forward to doing it again, hopefully soon.

Speaker 1: 41:05

Awesome, jared. Thank you so much for your time Everybody. I hope you enjoyed this. You guys' information. If you're interested in being a client, obviously you go to markprobercpacom to fill out our application. Really, really important stuff here. Thanks again for your time. And also send me some tax accounts, you guys. All right, come on. How come you need podcasts? In regards to sending me tax accounts, send them to our site. All right, you guys. Have a great rest of your day and we'll keep in touch. Stay tuned for more great content.