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up to the webinar let's get started welcome to the presentation today here you're going to discover how to get privacy and safety for your high value assets and we do that with the business trust strategy for title title is the same thing as ownership my name is james billings this particular presentation is for private investors it's for family office principals it's for political or high profile individuals financial advisors and business people here's a little bit about my professional credentials and experience and they are in the field of securities aviation and also real property in all of these particular professional pursuits on behalf of clients and also myself title was always important to these high value assets i learned about financial statements i learned about taxes i learned about the securities markets in the airplanes we learned about designing your outcome and situational awareness situational awareness is really a big part of what this business trust is all about and then of course with real property we had to learn about deeds deeds were always the ultimate part of any particular transaction either on the way in or on the way out and so in all these particular pursuits and especially with the real estate that's when i began using the the trust for asset privacy or for title privacy that was with real estate that was back in the mid 90s and it's really been a fascinating adventure to be able to evolve all of this and show you how this stuff works and why it's so stinking important now let's just kind of go through what are high value assets high value assets fit into a variety of different categories and we have real property real property for generations and for the millennial has always been the most important and highest value assets that any individual could ever own for thousands of years and today we see land we see buildings now something new that we didn't have before we have these notes and we have equity and those are different than originally the way it was but those again are also all high value assets we have intangibles such as royalties we've got crypto we've got options you have stock options in startup companies you have angel investors they're looking to invest in a company a series fund maybe they want a little anonymity or privacy in that particular pursuit and then we have just securities in general that people have and then we have family assets pre-marital assets inheritance pending inheritance and then we also have liens liens are negative but again they're high value assets and they can impact you know your personal financial affairs and so with these three categories by themselves that talks about high value assets we also have collectors that have artwork we have automobile collection we got aircraft we got watercraft and of course banking and brokerage is always considered a high value asset we can have those onshore we can have them offshore there's some specific offshore strategies as well and then for business people you know maybe you've got a business operation you're starting a new business you've got a subsidiary you've got to import export operation or maybe you just need a nominee for a transaction you're trying to do and in all cases all of these the business trust is going to fit into the overall game plan now when you're acquiring these assets or you're looking to change the ownership of these particular assets there's typically a couple of different ways that you can hold title either hold in your personal name or you use a business organization in order to hold title and with those business organizations they've got a lot of benefits to them there are a lot of features that we're looking for with those business organizations we've got limited liability we're concerned about that we'll talk more about limited liability history in a little bit and then we've got entity shielding entity shielding is the separation of your personal assets from your business assets and that's to provide you with protection we also have transferable shares or transferable stock and then we also have income tax options okay you got a group of people coming together into a joint venture stockholders shareholders okay how do we allocate the income tax obligation so those are always a part of a business organization and then for more sophisticated users maybe we're going to use this corporation for a private syndication or you could use the llc also with public finance public finances is part of how people participate in different business ventures and so these are part of your standard business organizations now mind you this is for a different purpose than what we're talking about the business trust the business trust in our particular situation we're looking for it for privacy and safety so there's a different uh objective here now these standard business organizations such as your corporations your llc's and your limited partnerships they're visible online and that may be okay for a lot of people but the internet has changed everything with respect to visibility of your business organization you see them registered the secretary of state all the information you provide to the secretary of state resident agent your officers your directors addresses that's all going to be in that database at the secretary of state and if you use an llc to acquire real estate all that information it's going to be down at the recorder's office as well so you've got secretary of state you've got the recorder's office so you have this visibility and that's just part of the territory these days now one of the things is that this leaves you vulnerable to hackers and thieves and also business identity theft we'll talk about that more and then also your competitors and your busybodies now if you're doing public finance you've got a big deal going on you've got public investors these business organizations are just great as is but if you're looking for privacy you're looking for safety for certain select assets then you need something different and what that something different is and something better is your business trust company because of the fact that they're invisible online they're unlisted in many cases with the secretary of state we've got some specific strategies for handling that and at the county recorder's office if you use a trust for title it's going to be anonymous it's not going to connect to anything else if you use an llc everybody can find it but with the business trust it's going to be an anonymous title it's not going to have any connections and so it keeps you safer from the hackers and the thieves it keeps you away from the business identity theft and also your competitors and busy bodies so if you're looking for that asset privacy and also that safety the business trust company is really the tool to be using here's an example of a private client we helped them out they were buying a 5 million dollar building with an sba loan and they wanted anonymity the founders of the company wanted to make certain that they had their privacy intact so we came up with a latin name we use a roman numerals and if you go look this up on google you're not going to find anything i'm not going to tell you what county it's in but nonetheless the point is is that it's going to be anonymous and that's what we're looking for in certain cases and that's what we're talking about here today one of the other questions that comes up okay we've got all this invisibility we're unlisted is there anybody that does know about these business trust organizations well the people you do business with okay you're insiders versus your outsiders and your insiders would be like for instance your bankers when you do your bank account you need to provide them with information about who you are and what you're doing okay but again the bankers are insiders these are not people on google looking up you know your business organization those are the outsiders and those guys are not going to be able to find this information and that's what the objective is here we're trying to keep the outsiders out of our internal affairs so again anybody that you share the information with your associates anybody on the inside they're going to know about it but what we're trying to do here with the business trust we're trying to keep the outsiders outside of our business now let me just share with you about the difference between the business trust and living trust they're not the same they have a different purpose the living trust is what we call a personal trust and the business trust is what we call a commercial trust here's the two different trust categories the trust categories are personal and commercial the personal trusts are to distribute a state that's what its purpose is okay it's a charitable trust it's a testamentary trust it's a living trust now the commercial trust is to conduct commerce commercial trusts include reits they include mutual funds they include the business trust we're talking about today statutory non-statutory but all of them their ostensible purpose is to conduct commerce now the purpose between the commercial and the business is different but the architecture is identical they all have the same basic architecture okay here's the architecture the there are four essential elements of any trust living trust business trust charitable trust any kind of trust and you have the intention to create the trust the people that are putting it together one or more people you have assets that go into the trust you have somebody that administers it that watches out for it which is what we call the trustee and then you have the people that get the financial benefits from it and those are what we call the beneficiaries so those are the four basic elements of any trust now here's a little bit about business organization history let's kind of take a step back in time back into the english time 17th century we see that shipping is the big form of business at that time and so the investors were coming together they're trying to figure out how to import and export different materials and raw goods and it's shipping at that time the investors were concerned about what kind of limited liability they might have if a shipment well for instance they've got gold or they've got raw materials and they're traversing many thousands of miles of open ocean what happens if one of those shipments goes down who's going to pay for those losses well they're concerned about what kind of a liability they might have and so the idea for the corporation was invented it's working its way through the courts uh not quite fully baked yet and so at that point we need an act of parliament in order to get a corporate charter and so with that act of parliament what that means is that they were highly scarce to get a corporate charter and they were very difficult to obtain now at the same time what's going on in the courts the common law courts the courts of equity is that we see these trusts working their way through the system we see living trust we see the charitable trust we also see these business trusts they're called unincorporated associations and they're what is essentially a private contract and so they're highly common everybody's using them now in england there's a couple of high-profile examples i'll share with you here and that is we got the london stock exchange we got the lloyd's insurance group so you have people coming together they don't want a corporation they have a whole different objective altogether of course the corporations are difficult by the way and that's what they're using they're using these business trusts in order to conduct their business and provide themselves with some protection and come together in a joint venture in the united states several hundred years later we're seeing standard oil we're seeing united states steel were even seeing a t set up as a business trust could they be corporations of course they could but they decided that they wanted to use the business trust structure so these have been around for hundreds of years now with those guys like the standard oil united states steel i mean you know there were certain public listings for those i mean they had a different purpose but still they are valid business trusts and that's what we're using so what are very few people know about these business trusts how come they don't use them i mean you know llc's of course are popular corporations that's what everybody talks about at the investment clubs or that's what they hear about from their attorneys and so-and-so said do this and do that and so there's really not much conscious thought about it and so we need to sort of stop and take a look at it but here again these corporations and llcs the limited partnerships they're highly profitable for the lawyers they're highly profitable for secretary of state they keep government control now remember the state really doesn't care about your privacy i mean yeah they want to keep your account password and all that stuff private but as far as your privacy for your high value assets that's not on their agenda they have no interest whatsoever in any of that so you know they're not going to help you with that that's up to you you've got to do that yourself these commercial trusts are rare in law school and your garden variety attorney is not going to know about these commercial trusts they know about the living trust that's 98 of what they learn in law school and then of course you got the the state legislature it's made up a bunch of attorneys right so they do you know the regular stuff they do the corporations and llc's that's where they make their money now i talked about the commercial trust to talk about the reads and the mutual funds those are highly specialized attorneys those are in-house guys they're using the statutory trust it's completely different for us and what we're trying to do with our objective which is this asset privacy and safety corporations and llc is the standard format but the business trust don't provide any incentive there's no financial incentive on behalf of the state legislature on behalf of the secretary of state or the attorneys to talk to us about them especially the ones we're talking about that are non-statutory because they don't make any money with them there's no financial incentive so in consequence they're ignorant i mean if you ask any attorney any regular guard variety attorney what a business trust is most of the time you're going to get a blank answer no we don't know about those we don't use those the fundamental difference between the standard business organization to corporations partnerships and llcs is that they're a creation of the state their statutory creation of the state and it requires government permission to get one we talked about the charter the active parliament well it's the same thing we got the secretary of state these days now the business trusts they do not require permission from the government you operate with a self-governing agreement i mean how you want to operate your business trust what kind of rules and regulations you have that's entirely up to you you don't need the government now again we did talk about the statutory business trust okay and so those are part of the government but again those are part of a lot of public finance we're looking at the non-statutory trust because we want those for our privacy and safety and unlike the corporations llcs and partnerships only the business trust can operate without the secretary of state me just talk about some of the obligations you have with the standard business organizations you got your disclosures you got your obligations you got your fees and you got your taxes many of you already know about this kind of stuff but when you set up one of these business organizations you got your filing with the state you got your disclosures your address you get your resident agent you have the officers you have the directors maybe you got the managers you got dates those are part of the disclosures now the obligations maybe you got a corporation you got to keep meeting minutes you have to issue the shares this is one of the things people do they'll set up a corporation they'll set up an llc and they will not issue the shares they will not identify who are the people participating in the business organization they don't keep the meeting minutes and these are all part of what they call the corporate bail and you need to do this in order to get the privileges and protections of what that business organization is all about and then you got fees and you got franchise taxes okay the secretary of state has their fees they set their fees they're non-negotiable you either pay them or you don't get what they offer and then you've got franchise taxes here in california they're very pricey and that's part of having that business organization as well income taxes are separate but what i'm talking about here are franchise taxes and then you have personal risk with these business organizations you got maybe civil lawsuits you got tax audits you got insurance claims so in the event of a of a civil complaint someone sues you sues your business organization if they look for all of your paperwork and your compliance with the secretary of state see if you got that veil intact you don't have it that can cause you problem come back and you can be personally liable for it the same thing with a tax audit if you got your federal tax audit you got a state tax audit and you've got deductions maybe you elected to use a corporate classification for the lower tax rate and so for more deductions fringe benefits for instance and they say well let me see all your paperwork and you don't have it then they could recast all of your income all of your revenues back to personal rates i mean that would really be a rough day i mean the auditor would love it because he makes a lot of money makes him look good for his boss but these are some of the risks that can happen in a tax audit if you haven't complied with all the obligations with your your business organization and then your insurance claims i mean you get fire insurance you got liability insurance a variety of different types of liability insurance if you had a claim and there was an investigator they just wanted to kind of look at your records and you couldn't provide them could they deny your claim well they could i mean you don't have your business organization you haven't respected it so if you don't respect it how we gonna respect it so these are some of the personal risks that can come with these business organizations again you know it's not a problem for most people but then again you know maybe it is so you just need to be aware that these are some of the things that go along with the package and then we were talking about the internet a little bit earlier and how the visibility is a risk to your standard business organization let me just mention a couple of things and that is there are a few states that are saying well come register with us you know we're not going to disclose all the information just a little bit okay you've got states like wyoming you got new mexico and you've got nevada and they're going to say we're going to hold withhold certain information we're not going to post it on the website but here's the point and that is you've already left the breadcrumb trail and now on top of these disclosures and this internet stuff we have these business organizations we got the corporate transparency act this was passed last year in washington dc and what's going to happen in the future is that the federal government is going to put the name the social security number photo identification maybe your passport number a physical address of any controlling stockholder or shareholder of corporations or llcs there's about two million of them new ones that are filed every year in the united states so just think about that and then of course it's going to be retroactive once they get the new guys in there they're also going to get the old guys so even an organization you set up today or set up a you know a year or so ago that's all going to be part of this new database the information that's going to go in this new database for the treasury department in the corporate transparency act so take a look at it and go look it up on google you can find everything out about it it's you know it's just part of what's going on these days and then the secretary of state fraud i was talking about a little while ago there's a couple different ways they can execute this they can either hack your password the secretary of state go in and change the member of your llc for instance or one of the officers or your corporation or the other way they do it is that they'll just mail in an update and not all the secretary of state systems have a mechanism in there for them to notify you that there's been any kind of a change so just think about that are you going to be looking online every single day to see if some hacker has gone in there and changed the officers or the managers of your llc i mean that's just too much anyhow but it's just one of the risks that goes along with these public registration and in the business identity theft on the california secretary of state's website they talk about business identity theft and essentially what they say is look you got to provide us all this information to get your corporation get your llc set up but if somebody uses it against you you know when they hack you and they steal some money from you tough luck so anyhow here's an example of a guy that had an llc that was hacked and he had business identity theft it was a five million dollar piece of land approximately five million dollars and the hacker smart guy i mean well you know smart in a bad way and he hacked their website and changed the manager of the llc and then went and and took out a two million dollar hard money loan against this vacant piece of land now of course you should never own land free and clear that's a whole other discussion altogether but that's what happened this particular situation so he replaced the manager of the llc went got title did escrow got title insurance of course because the title insurance company looked up and they said well you're the right guy you know you're the manager of this llc so you can sign the loan documents so the whole thing went through now did they make the first payment of course not and so eventually you know the default notices and the mailing addresses it all sort of filtered back to the real guy that actually was the manager of this llc and then it was like you know one of those you know oh my god you know oh my gosh oh my god moments that this has actually happened he spent several hundred thousand dollars trying to get all this rectified but the police agencies pointing at the secretary of state secretary of state points at the title company a title company appoints a secretary of state i mean everybody's pointing the finger at each other so this is an extreme example of what happened for a guy that had an llc own a piece of land had secretary of state fraud and then had business identity theft so you go look this up too it's on the internet and you can see it here on the slide so here's your benefits for a business trust company all these issues we talked about before all these risks with these other business organizations they completely go away you get protection from the state we're completely out of their system altogether you still get the income tax options you can have the disregarded you can have the partnership you can have the corporation you still get the limited liability you still get the entity shielding the separation of assets they're suitable for you know americans they're suitable for foreign nationals and of course they're unlisted and they're invisible online if you do it right now here's the last point and that is about asset protection asset protection is a big topic these days everybody's talking about it you go to these attorneys and they set up these complex structures you know family limited partnerships and series llc's they're highly complex my approach on all this is just keep it simple guys okay and simple is the easiest and so your easiest and best form of asset protection is just silence so take your special high value assets and put them into a business trust and keep them off the radar screen you know leave your plain vanilla stuff out there you know you always want to have that out there but just keep it simple and so your least expensive and your most effective form of asset protection is silence let's just kind of go back and take a quick look here about the corporations versus the business trust several hundred years ago the corporations were scarce they were difficult act of parliament and the business trusts were very common everybody used them there were thousands of them you can read back into history now today several hundred years later the corporations llcs they're common but the problem is they're easy target anybody can find them anybody can attack them i mean you've got all kinds of problems with them visibility wise now again we talked about you know public companies and big corporations okay it's different but for us what we're trying to do here with this privacy factor is we don't want to be an easy target and with the business trust we're not even a target whatsoever because they can't find us they're highly scarce people that know how to operate a business trust know how to set them up i mean it's a scarcity i mean everybody knows how to do corporations and llcs but who knows how to do a business trust is isn't that what we're looking for in order to get this privacy so that's what's changed over the last several hundred years all right now let me take you through three short stories of people with high value assets that had serious concerns about privacy and safety and how the business trust was the solution for them the first guy is tom tom and his family owned a portfolio of single-family home rentals up in orange county north of san diego here they've cultivated this portfolio over a period of several decades and now they've got a good business they've got good income they got good tenants they maintain their property their values have gone up and it's a good family business one of the things that's relevant here is that is that tom and the family had heard from all the real estate investors all the clubs all the real estate guys use llc's use llc that's what everybody's using and then one day tom woke up and realized that over the course of at least the last decade he had paid over two hundred and ten thousand dollars in franchise taxes alone let alone all the filing obligations all the paperwork everything else that went along with these llc's and he realized that the business trust was a solution form so what they did was that they took each one of these 27 single-family homes and deeded them from the llc to a separate business trust 27 different business trusts and as a result he was able to shut down those 27 llc's he was not gonna pay another two hundred and ten thousand dollars over the next decade that's money they could go to the family so he got rid of the franchise taxes he got rid of all the filing all the hassles he had with the secretary of state and he got anonymity and the business trust was the solution for him and the family now the next person here is gina gina is a wheeler dealer she was involved in a real estate venture she had some partners and they went into a development deal the development did not work out well gina was so excited in the very beginning all the investors but they wanted her to sign on a note personally so she did well when things didn't work out they came after her right that's how things work meanwhile she got an inheritance coming from her grandparents her grandparents are leaving her i don't know what is it 650 or so and if she receives that money personally with that civil judgment out there then that money is subject to seizure or attachment if she puts it in her personal name she puts it in a corporation or puts in an llc i mean if somebody owes you 3 million bucks you know you're going to have somebody looking in all the records secretary state's record and in the bank records in order to try to find that money so the solution for her the safe solution was to use the business trust in order to receive that inheritance she could still access the funds but since the way it was set up she was able to keep those inheritance funds saved from the civil judgment she had you know how she wants to settle up with her investors at some point in the future that's a whole separate story altogether but the business trust was the solution for her so the business trust safeguard is 650 grand for her and then the third one here is ivan ivan is part of a family business he's an heir he's an employee of the company been in business for several generations they make industrial tools and ivan is engaged to be married he's got a wonderful fiance the family loves the fiance they're looking forward to having the young family you know evolve over time but the family is also very business savvy and they're concerned about his shares his super voting shares his super voting stock in the in the family company being a part of the marriage they did not want to have that as a part of any type of a prenup agreement so the solution for them was for ivan stock to be vested to be excuse me to be assigned to an independent business trust independent trustee he could still receive the income from his shares but it was going to be safe from community property from the marriage and it could stay outside of any type of a prenup agreement so this was a tremendously valuable solution for a very high value asset which was his stock in the company so it gave the family peace of mind it avoided all kinds of disclosures that comes with prenup agreements of course the prenup agreement's a divorce plan but you know we don't want to go there and let the family develop you know let the new wife come into some of the family business meetings and see how it goes and then we can you know we can make things change as we go along but this way using the business trust for that stock was the way for them to go so the end result here in all three of these short stories is that tom was able to save a ton of franchise taxes and gained anonymity and then gina was able to safeguard her inheritance and then ivan was able to avoid having his stock be part of a prenup agreement and it gave the family a peace of mind and they did it with the business trust company so you've now figured out that a business trust is the solution for what it is you're trying to accomplish so how do you get one of these and how do you get it set up you've got three different ways to do it you can either do it yourself you can have us do it for you or we'll do it together now with the do-it-yourself you got to do all the research you got to figure out how the pieces work you got to find out what's important what's not what's the context how does it all happen how does it all come together who knows how much that's going to cost you now we can do it for you you elect the private client option we'll do everything for you it's 10 grand and that's what that's all about or the third one which is the done together done with you we do it together this has really worked the best and this is what we call an e-seminar the e-seminar is a hybrid we do it together and what's included in this is a comprehensive owner's manual in this owner manual includes all your basic operation plus all the privacy strategies that we've evolved over the period of time also your banking instructions your banking is probably one of the most difficult parts of getting your business trust stuff up and going your legal issues your income tax planning what about your documents your state registration your picture diagrams all that is relevant you know i was talking to you about doing it yourself okay these are all the relevant components that you need to know about and understand in order to get the business trust up and going and then we've got advanced combinations what if you've got an existing corporation or llc how does that fit or how does it connect with your business trust what about your estate plan everybody needs an estate plan i'll talk more about that in a minute and then you've got your multi-trust designs there's reasons there's very good reasons for having more than one business trust set up and this e-seminar includes our expert guidance we take you through it it gives you context for your situation we're responsive to that and what you're trying to accomplish it's time efficient because of the fact that it's organized and it's laid out in sequence otherwise you get to do all that stuff yourself it's too tedious so doing this and walking through this in an organized format that's the way to learn it that's the way to get it done right it's a comprehensive owner's manual you're not going to need everything today but the basics that you're going to need for instance a quick start guide okay that'll get you up and going today but some of the more deeper material that part of the e-seminar it's there when you need it in the future some of your tax planning issues maybe you got investors okay and then there's telephone support you call us you call me i'll talk to you and figure out what you're trying to do and give you some type of guidance so here's the webinar premium offer and that is the business trustee seminar this is what everybody wants they're looking for the asset privacy they're looking for the asset safety and this is what the business trusts can do for them and they also need a little bit of context a little bit of guidance so you go through the material you figure out how the different pieces work and then call me we'll talk about it we'll talk about control we'll talk about taxes talk about multitrust and this is really what people are going for these days now that's what they want okay is the business trustee seminar but they also need an estate plan and so i'm going to include all that normally the business trust by itself is three grand but i'm going to include the estate plan because that's what you need as well because estate plan goes with any type of business organization whether it's a business trust it's a corporation or it's an llc they all fit together because if you don't wake up tomorrow who's going to take over all your stuff where about all your passwords how's your desk laid out where are all the pieces so this is part of what this particular package is all about so it's complete that's what this is all about so how do you get a business trust you do it yourself who knows how much it's going to cost certainly the estate plan you got to figure out how to do all that as well or you can get it done for you those are 10 or you can get it done with you and those are three and of course it also includes the estate plan so your opportunity go to our website here's the link web offer includes everything in it if you got any questions guys you know give me a call and let me know thanks very much for spending some time with us today we'll see you next time

2022-09-03 00:20

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