The Mark Perlberg CPA Podcast
The Mark Perlberg CPA Podcast
EP 106 - Why You Need a Trust (even if you're not rich)
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Trusts serve as powerful wealth preservation vehicles for the affluent, providing control, protection, privacy, and potential tax savings. We explore the fundamentals of trusts and how they can be strategically used for estate planning and asset protection.
• Most beneficial for those planning their estates, individuals with risk exposure, entrepreneurs, business owners, and real estate investors
• Revocable living trusts help avoid probate and mitigate estate taxes when inheriting assets
• Irrevocable trusts remove assets from your estate for asset protection and tax minimization
• Grantor trusts (intentionally defective grantor trusts) allow assets to exist outside your estate
• Charitable trusts create significant tax savings, especially during major capital gains events
• Different professionals may recommend different trust solutions for the same situation
• Proper trust structure can help preserve multi-generational wealth
Ready to slash your tax bill? Schedule your free consultation and let's strategize your tax savings together! Book now at: https://www.prosperlcpa.com/apply Or, if you still need more time, here are some other ways to begin winning the tax game...
Take our free Tax Planning Checklist & learn about what tax savings may be available for you in our minicourse at https://taxplanningchecklist.com
At the very least, get on our newsletter to gain access to free live events and exclusive insight you won't find anywhere else: https://www.prosperlcpa.com/subscribe
One of the most important wealth preservation vehicles that the affluent like to consider here is trusts. So let's dive into it and talk about what this could mean to you here. So trusts are used for control, protection and privacy and in some circumstances they can create significant tax savings circumstances. They can create significant tax savings. We see a lot of our clients use this for estate planning, which is really well integrated into the tax planning, but also there are some additional tax reduction strategies. But let's talk about how this can apply to you in the very basics here. Now, before I get started, I want to give you guys just a little bit of backstory here on who this is going to be most important for. This is going to be really important for those of you who are thinking about their estates and estate planning, but also for those of you with risk exposure, those of you with lots of assets, entrepreneurs, business owners and real estate investors. Another thing to consider here I'm a CPA tax strategist. We talk about trust and entity structuring all the time, but there's a whole universe of ideas out there regarding trusts and all sorts of opinions and all sorts of amalgamations and all sorts of different outlooks you're going to get on how to properly set up your entities and your trust, and there are people who dedicated their careers and their lives to it and some of them will say different solutions for the same person, so it is a little bit tricky navigating what's the best solution for you when we start talking about, in particular, asset protection and a trust structure here. But I'm going to hopefully give you some insight to get you started really get the ball rolling here on what is a trust, what can it do for you and what you should start thinking about. So one of the things I want you to think about here is you have different types of trusts. The most common ones that we see or vocabulary you're going to hear is a revocable living trust. Some may call this a starter trust, and this helps you in particular. What we see with a lot of folks where they wish they had this in place is avoid probate, and anyone who has had to deal with going through probate to acquire assets can tell you what a pain in the neck it can really be. It could take months or years to get the assets out of the estate when someone is a pass. Also, these trusts are going to help you with mitigating the estate taxes when you inherit assets. You can see some prior episodes where you could wind up paying taxes on as much as 40% of the assets past certain thresholds and, as we're awaiting tax legislation, I don't really know what that threshold is going to be for you by the time you're listening to this, but certainly for those of you with lots of assets, this can be incredibly important for the preservation of your wealth and creating that multi-generational wealth for your children to inherit and their children's children.
Speaker 1:We have irrevocable trust, where it removes assets from your estates. We see many people using the irrevocable trust for asset protection, tax minimization and long-term control, so you can put the trust and have a trustee. You can have a beneficiary, but you can change who is the beneficiary throughout time. And then we have grantor trusts or you may have heard of intentionally defective grantor trusts. You can put assets outside of your estate. This is popular with wealthy families doing advanced estate planning. We have charitable trusts, which can be really impactful with creating tax savings, and you see this with lots of affluent people in particular with capital gains planning, where you have a major capital gains event or maybe you're selling your company and you put it in a trust and you're kind of creating an endowment where the funds are going to go to a charity at your date of death and that gives you an immediate write off and also helps you avoid the capital gains because the funds are in this trust and it has this sort of charitable structure.