Ultra Trust®: Asset Protection, Reposition Assets, Taxes, Probate
I want to talk to you about what kinds of assets can be repositioned from you, to the irrevocable trust. Your personal residence, your vacation spot, your life insurance policy, and by the way, your insurance policy, if there is any incident of ownership in your name, then it’s taxable. The Ultra Trust will own the insurance policy, your automobile, if you have children under the age of 18, you may have read, and I’m sure you have, when your kids get in trouble, you the parent, have to step up to the plate and I’ve been there. I’ve walked around with an open checkbook, if the Ultra Trust owns the motor vehicle, you can reduce the premium, possibly you don’t have to buy a huge liability insurance. It’s an effective device.
The Ultra Trust® can own stocks, bonds, collectibles, art, antiques, boats, planes, anything that is valuable. The Ultra Trust can own investments. The Ultra Trust is the only vehicle that can own Subchapter S stock. There is no other vehicle to own Sub S stock, and for major asset protection, if your Ultra Trust owns limited liability shares, or is a partner of a partnership or family partnership, this is major asset protection. It is the Rolls Royce of asset protection. You have to go outside of the United States to get better. But, in the United States, the Ultra Trust, if it owns a limited liability company, it is a fortress. It is about the best that you can do in the United States.
And now I would like to talk to you about the tax benefits of an Ultra Trust. Again, with the example of the leased car. When you lease a car, you don’t own it, but you get to use it and you get to pay the expenses of using it, the gas, the insurance and so forth. If it is a business automobile, all the expenses related to the automobile are tax deductible. For example, if your Ultra Trust owns your personal residence, the interest and the real estate tax is deductible on your 1040. When you sell the property, you can take advantage of the capital gains tax or a $250,000 exclusion. The Ultra Trust, there is absolutely no down side, it is tax neutral.
What’s probate? It’s a big fancy word. Basically, it is a redistribution of your wealth. It begins on the date that you die; everything that is in your name has to go to probate. Whether or not you have a will, it goes to probate. Each of the 50 states has different rules, the common theme in all of it is, the court system takes over. If you have a will, the will itself is a member of a public record. If you don’t have a will, the state will determine who gets your assets. Creditors can file a claim, long lost relatives could file a claim, anybody can file a claim. Then the court determines who gets what, and the verification of the claim. All of this, lawyers, accountants, appraisers, court costs, it takes time, it takes money. In some states the probate process can take 2 years and cost 25% of the estate. With the Ultra Trust, or a top-notch irrevocable trust, you don’t own any assets, you don’t have to go through the probate process, and because you don’t own any assets, you don’t have to file an estate tax return. So your loved ones don’t have to worry where the assets are going to go, what the process is, or who they will need to speak with. They can focus on just grieving your death because you protected them with your estate planning ahead of time from the fiasco. Therefore, the probate process is to determine who gets what after you die. So everything in your name goes to probate. They determine who gets the house, who gets this, who gets that, and the other thing. The estate tax is based on how much the wealth is; Before it is distributed, the government would like to get the biggest chunk. You can avoid all this with an Ultra Trust®.
- Part 1 – Ultra Trust® Asset Protection
- Part 3 – Medicaid Asset Protection: 5-year look back
- Part 4 – Asset Protection: Beneficiary / Hiers