LLCs or Trusts that is the question

In my opinion I would not use an LLC of any kind in any state for the IQD exchange because there are very little tax advantages, but more so over the individual.

I would use an LLC with S corp. election for high liability business and have a trust domiciled in Nevada owning at least 85% of the LLC S corp. Stock if not all. That way if the LLC business project goes bankrupt it does not affect your money cribbed away and the Trust gets a huge tax write off for the everyday course of business.

I would use an irrevocable trust as qualified under 26 USC sec. 643(a)(3) for the exchange and then create an LLC with S corp. election for liability type business selling at least 85% of stock to the trust in exchange for the money the LLC needs to operate the LLC and I would repeat that over and over again.
Here is why in Nevada for an LLC as compared to other states and remember you can file an LLC under Nevada Law, but if you are doing business with that LLC in other states it must be filed there as well, as opposed to a Trust.

Piercing the LLC Corporate Veil Differences:

Nevada has 3:
The corporation must be influenced and governed by the person asserted to be the alter ego.
There must be such unity of interest and ownership that one is inseparable from the other.
The facts must be such that adherence to the corporate fiction of a separate entity would, under the circumstances, sanction fraud or promote injustice.

Wyoming has 17: Almost as bad as California who has 26
(1) commingling of funds and other assets, (2) failure to segregate funds of the separate entities, and the unauthorized diversion of corporate funds or assets to other than corporate uses; (3) the treatment by an individual of the assets of the corporation as his own; (4) the failure to obtain authority to issue or subscribe to stock; (5) the holding out by an individual that he is personally liable for the debts of the corporation; (6) the failure to maintain minutes or adequate corporate records and the confusion of the records of the separate entities; (7) the identical equitable ownership in the two entities; ( the identification of the equitable owners thereof with the domination and control of the two entities; (9) identification of the directors and officers of the two entities in the responsible supervision and management; (10) the failure to adequately capitalize a corporation; (11) the absence of corporate assets, and undercapitalization; (12) the use of a corporation as a mere shell, instrumentality or conduit for a single venture or the business of an individual or another corporation; (13) the concealment and misrepresentation of the identity of the responsible ownership, management and financial interest or concealment of personal business activities; (14) the disregard of legal formalities and the failure to maintain arm's length relationships among related entities; (15) the use of the corporate entity to procure labor, services or merchandise for another person or entity; (16) the diversion of assets from a corporation by or to a stockholder or other person or entity, to the detriment of creditors, or the manipulation of assets and liabilities between entities so as to concentrate the assets in one and the liabilities in another; (17) the contracting with another with intent to avoid performance by use of a corporation as a subterfuge of illegal transactions; and the formation and use of a corporation to transfer to it the existing liability of another person or entity.

South Dakota has 6:
(1) fraudulent representation by corporation directors; (2) undercapitalization; (3) failure to observe corporate formalities; (4) absence of corporate records; (5) payment by the corporation of individual obligations; or (6) use of the corporation to promote fraud, injustice, or illegalities.
Trusts have other tax advantages for the sale of capital assets found at 26 USC sec. 643 that LLCs or corporations do not enjoy and has normal taxation under the corporate rules, which have more deductions over a private individual, for the everyday normal course of business.

Irrevocable Trusts are blind in Nevada because there are no filing requirements. (See NRS chapter 163)

Irrevocable Trusts also have a $5000 or 5% of the total of assets tax exemption under the 5X5 power provided in 26 USC sec. 2041, for distributions to beneficiaries, but there is one exception to the rule if you utilize 26 USC sec. 643 exemption to the sale of capital assets, the trust cannot make distributions to beneficiaries in the same tax year the capital asset is sold. The trust must wait until the next year. That does not preclude the Trust from making investments and re-investments, funding LLCs or paying trust bills.

The crux of the LLC question versus a Trust is clear to me and I hope it is for you as well. You must do your study in this area and determine what is best for your situation and act accordingly.

Good info, thanks .

I have been looking at one for some time now that sounds similar to what you are speaking on. They refere to it as a Blind, Irrevocable, Discretionary, Non Grantor, Complex, Spendthrift Trust.

Would anyone care to break it down for me and how do all those parts fit together

Regal Beagle wrote:I have been looking at one for some time now that sounds similar to what you are speaking on. They refere to it as a Blind, Irrevocable, Discretionary, Non Grantor, Complex, Spendthrift Trust.

Would anyone care to break it down for me and how do all those parts fit together

Blind Trust = Has two trustees and a trustee watcher...Is irrevocable...pretty limited...A trust in which the executors have full discretion over the assets, and the trust beneficiaries have no knowledge of the holdings of the trust.

Irrevocable = All trusts are either revocable or irrevocable = revocable will be calculated in your estate = probate OR Irrevocable = Terms cannot be changed, etched in stone = cannot be included as part of your estate.

Discretionary Trust = Specific use = A discretionary trust in Canadian and English trusts law is a trust where the beneficiaries and/or their entitlements to the trust fund are not fixed, but are determined by the criteria set out in the trust instrument by the settlor. It is sometimes referred to as a family trust

Non-Grantor = In non-grantor trusts, the grantor has given up all right, title, and interest in the principal. Only the trustee may revoke or terminate the trust. In a non-grantor trust, the grantor cannot be named as a trustee, beneficiary, or a remainderman. (sort of like blind trust)

Complex Trust = In a nutshell, the complex trust is one that contains provisions for charitable gifts, an income stream, or concerns other types of wealth distribution. The Inter Vivos Charitable Remainder Trust is such a trust and is EXTREMELY hand in the context of Dinar revaluation scenarios.

Spendthrift Trust = A spendthrift trust is a trust that is created for the benefit of a person (often unable to control his spending) that gives an independent trustee full authority to make decisions as to how the trust funds may be spent for the benefit of the beneficiary. Creditors of the beneficiary generally cannot reach the funds in the trust, and the funds are not actually under the control of the beneficiary.

Someone is trying real hard to sound smart. There is no need to name a trust like that. A SPA Trust (Special Powers or Appointment)...the Charitable Remainder Trust / CRUT ....and 541 Trusts are probably the best to get you ready for the RV. The CRUT is cheapest and I can get them done dirt cheap. Need one? Just ask on PM only. For the 541 Trust = Go to Lee McCullough. Also use Lee for the SPA Trust (really good for planning an IBC and offshoring) The best bet...for the RV...use the CRUT and stop worrying, then after the RV, you'll have money to use as you wish, still have Dinar to put in a Total Asset Protection Plan and have all the money management tools needed until the day you die with lawsuit protection to boot with a guarantee of NO PROBATE!

Relix, thanks for sharing your expertise!

Thanks Relix....I appreciate this!

I have a question about the CRUT. I see a number of people recommend this as a way to avoid the capital gains tax on the C/E. My question is, how do you get the money out to do the projects you want, pay off debts and put money into a total asset protection plan? My reading about CRUTs says you pick a percentage to be distributed to you every year between 5 and 50%. I'm guessing those distributions to you are considered income and will be taxed as income. If you set the percentage high to get the money out your income tax would wipe out any capital gains saving. Also, can you change the percentage, the beneficiary or the charity? Thanks

catman wrote:I have a question about the CRUT. I see a number of people recommend this as a way to avoid the capital gains tax on the C/E. My question is, how do you get the money out to do the projects you want, pay off debts and put money into a total asset protection plan? My reading about CRUTs says you pick a percentage to be distributed to you every year between 5 and 50%. I'm guessing those distributions to you are considered income and will be taxed as income. If you set the percentage high to get the money out your income tax would wipe out any capital gains saving. Also, can you change the percentage, the beneficiary or the charity? Thanks

Bear in mind that the CRUT is a tool that is a part of a TAPP (Total Asset Protection Plan) Operative word being "PART".

The CRUT allows you to take a percentage usually distributed 4 times a year which can be from 5% to 50% but 50% sends up red flags. It is applicable if you are over 80 years old. The likelihood being that you may die any minute. 10% is more common if you are 40 - 55 yrs. old.

The Strategy: Depending on your age, calculate the number of years you are likely to live. The national average is that a person at retirement age "62" will need 1 million dollars to remain comfortable for the duration. So...1 million dollars with a "recipient payout" of 10% would equal $100,000.00. The tax on that amount is not crippling but it is substantial. Most of us will have multiple millions if our speculative reasoning is correct. ( 3$ to 1 IQD ).

The Solution: Start the CRUT with a smaller amount of money / Dinar so the first distribution will give you enough cash to buy a TAPP and perhaps pay off immediate debts that may be pressing. Bear in mind that a typical 1 million dollar funding would on first recipient payout would only be $25,000.00 because as I said, typically it is paid out 4 times a year. Every 90 days. This presents NO significant problem. Don't worry. The taxes would be nominal on 25K. 1 million in a CRUT would on first payout equal only 25K.

I use this strategy for myself. I will assume the CRUT to be my retirement nest egg that is off limits and the terms of the CRUT cannot be changed once funded and the EIN is registered. It is an irrevocable trust. I will put 1 million in the CRUT and only cash in enough Dinar to equal one million dollars and NO MORE! (NOTE: You can always add to the Unitrust amount but cannot diminish it) I will issue the Recipient payout to myself 25K, and then I will leave the rest of the Dinar in my TAPP. I will then file my TAPP docs in Nevada and then get the EIN and cash in the rest of the Dinar and have the funds wired into the TAPP / LLLP banl account. The EIN is required to open the bank account for the TAPP. Open the bank account before cashing in, so the funds never leave the TAPP thus preventing the capital gains assessment.

Now here is the sweet part!

In your LLLP, you are allowed to make the CRUT a Limited Partner. It has a bank account. That CRUT and Bank Account are "INSIDE" the LLLP. You are also a "Limited Partner" in the LLLP and your private LP Bank Account is also in the LLLP. The second recipient payout will be made from the CRUT (inside the LLLP) to you as a limited partner (inside the LLLP) so the money never left the LLLP and there are no CG taxes and no Income taxes...period. From that point on, you only take out of the LLLP the amount needed for those personal expenses. That amount only...will be subject to Income Taxes. However, there are strategies to use to leverage the Income Tax by using the allowances contained within the Articles and Bylaws of your C-Corp which is the General Partner of the LLLP. The IRC allows one to practically write your own ticket when it comes to C-corps. I have very special and unique clauses and executive board programs that will turn virtually all your personal expenses into deductions instead of liabilities...even groceries...even mortgage payments, repairs, cars, maintenance, insurance payments, co-pays for drugs and doctor visits.

EXTRA FEATURES: The CRUT is like a store front. You can invest Trust Funds in ANY investment provided it has a reasonable chance of making a profit for the CRUT in that year. That is pretty broad. BUT...taking into account that we will have multiple millions, don't touch the CRUT and let it be the "NEST EGG" we spoke of and keep it simple and keep the accounting basic and simple and never worry about the golden years because no matter what happens, you will always have food and shelter.

I wrote an E-Book on this CRUT and give it away for free. You can request a copy by emailing DBLH@ROVIN.NET.

I'll ask a question here. Would you folks like to have a regular conference call on this TAPP and CRUT and strategies for usage? There is so much to this that we could type until our fingers bleed and in a piece meal way, we would still never cover it all in a cogent way. It isn't difficult to understand but we have been so programmed to think in a way that precludes the possibilities. It does require a shift in thinking. We could have classes and Q&A afterwards and all would benefit everyone. There has been so much bad info put out that many people are going to find themselves in trouble after the RV, subject to tyrannical taxes, and possibly in jail. Pass the word far and wide and invite people from other forums if you wish. If you want it...I will do it. :shootin the br

Thank you very much for this response. I said count me in on one of your other posts, but I will say it again. heck yess, count me in. I have some questions on the Crut, but will get the e-book first and look there. I really hope you get enough response to do the classes.

Just did some research in Washington and it appears the LLC has now had almost all of its intended advantages defeated by legislation. The Charging Order protections have been all but eliminated.

A nail pops up and the Feds hammer it down. They IRS has no intentions of allowing any new protective entities to be successful. In Washington...the LLC is now worthless.

Either way, they aren't getting my cash when or IF this rv's, I'll guarantee you that- I'm all set-

Relix, When this RV happens there's a property in east tennessee that i want to purchase for wounded warriors and active duty troops. It used to be a girl scout camp and it has a huge pool, 221 acres with 35,000 acres of national forest around it, a small lake, cook house, tent houses, other houses, camp sites and outbuildings on the property.  What trust should I use to purchase this property and also have money coming in to supply the running of it?

Blexum wrote:Relix, When this RV happens there's a property in east tennessee that i want to purchase for wounded warriors and active duty troops. It used to be a girl scout camp and it has a huge pool, 221 acres with 35,000 acres of national forest around it, a small lake, cook house, tent houses, other houses, camp sites and outbuildings on the property.  What trust should I use to purchase this property and also have money coming in to supply the running of it?

One way that comes to mind is this: Set up a 501 C-3 non-profit that owns and runs the property for the Vets. Then when using your TAPP (Total Asset Protection Plan) as a part of that plan, you will have a Charitable Remainder Unittrust...that's if you don't already have that set up. (NOTE: You should have this to get across the RV and become liquid so you can set up the TAPP without Capital Gains Tax...Pre-RV) Then, within your TAPP use this CRUT as your retirement fund / nest egg and name the 501 C-3 you set up as the charity to whom you wish to donate money to...or even set it up as the Charity plus one of the recipients / beneficiaries. The advantage is that at that point you have turned all the donations into tax deductions and the 501 will operate tax free...and then ALL your cash stays in house. You can even hire kids and family to administrate the 501 and they can earn an income.

There are other scenarios but that one or something along those lines would be most advantageous. Dues or memberships to the Vets Club could continually replinish the funds in the CRUT so it would not run out of money. Plus interest on that money is income for the CRUT. If you ever decide to sell it off, make sure to title it to the CRUT then sell with no 1031 restrictions and NO Capital Gains Tax as I'm sure it would be worth more after you fix it up for the Vets than when you bought it.

Hope that give you some food for thought.

Thank you for getting back to me on this.  I have'nt got anything set up as yet but will before I go to exchange my dinar.  I'd like to know if anyone else would like to do this with me as well.  It's a really cool place. It can be seen on Land & Farm #590203. It's called Sky Wa Mo.  A 221 acre girl scout camp.  I will be leaving for the parts unknown after the CE and digging a deep hole but I'd sure like to set this up for wounded warriors, Air Force Pararescue and Seals to come to and chill out.  If you know anybody that might be interested please let me know.  Thanks, John