Index page

What’s a Trust? Grantor, Trustee, Beneficiary

Posted on: January 26, 2017 at 1:58 am, in

ULTRA TRUST™ – What’s a Trust?

A “TRUST” is nothing more than a “CONTRACT.”

What's a trust?
  • The purpose of a TRUST is to create an “Artificial Legal Person” to protect, hold, and manage your private wealth for the benefit of your heirs.
  • As in any contract, someone must initiate the contract (Grantor or Trustee).
  • The contract (trust agreement) must specify the who, what, where, when, why, and other conditions.
  • Finally, the contract is for the benefit of someone or something (beneficiaries: wife, children, grandchildren, church, other charitable organizations, etc.)

Trust concept

Watch the video on 'What’s a Trust? Grantor, Trustee, Beneficiary'
Like this video? Subscribe to our channel.

The concept of a trust was first used in Anglo Saxon times and is contractual arrangement whereby property is transferred from one person (The Grantor) to another person or corporate body (The Trustee) to hold the property for the benefit of a specified list or class of persons (The Beneficiaries).
Although a trust can be created solely by verbal agreement it is normal for a written document to be prepared which evidences the creation of the trust (the Trust Deed), sets out the terms and conditions upon which the trust assets are held by the Trustees and outlines the rights of the Beneficiaries. In essence, a trust is not dissimilar to a will except that assets are transferred to trustees during lifetime rather than those assets being transferred to executors on death. The trust deed is analogous to the deed of will.

There are three elements to the “trust” document:

  1. Grantor
  2. Trustee
  3. Beneficiaries

1. The “Grantor”

The person with the money or assets. The owner of the asset(s). The grantor’s motivation is to get asset(s) out of his name for either some or all of the following:
  • Asset protection/wealth preservation
  • Reduce potential frivolous lawsuits
  • Elimination of the “probate jail process” (see definition, below)
  • Elimination of estate taxes
  • To gain some tax benefit or some other tax deferral benefit
If the “Grantor” initiates the trust (contract), it’s called a “Grantor Trust,” otherwise it’s called a “Non-Grantor Trust.”
If the “Grantor” wants to retain certain control over his asset(s), it’s called a “Revocable Trust” otherwise, it’s an “Irrevocable Trust.”
Revocable / Irrevocable has significant asset protection and tax differences.
“Revocable,” is like the kid next door that brings the ball to play basketball with the other kids. Everything is fine, as long as he makes the rules, and he makes the rules as he goes along. If you don’t agree, he takes the ball and goes home. Ball game over.

#Living Trusts are outright dangerous.

The Living Trust can destroy your estate in the event of a lawsuit, serious illness, or elderly care. One name given to a “revocable” trust is the “Living Trust.” The sole purpose of the Revocable Living Trust is to “eliminate the probate process.”
  • Assets in a trust, avoids probate
  • Assets NOT in a trust goes to probate with or without a will
The living Trust is outright dangerous for asset protection, wealth preservation, and estate tax elimination. It’s obsolete for assets greater than $675,000. With the Living Trust the owner of the assets retains significant power over his wealth and will NOT insulate assets from the lawsuit explosion. There’s absolutely no tax benefit, no asset protection and no wealth preservation benefits with the “Living Trust.” I DO NOT RECOMMEND THE “LIVING TRUST.” if you have one, reconsider your financial goals. (See my final word about trusts, below)
Personally, I think the “Living Trust” is a sham perpetrated on you by shameless professionals out to extract more than just one fee. Don’t just walk, run!!

Various tax proposals are being bandied about, including House Ways and Means Chairman Bill Archer who says that he’s “pushing” to “g r a d u a l l y phaseout” the death tax within the next 10 years. “Death by itself should not trigger a tax” says Chairman Archer. Currently, estate taxes vary from 37% to 55%. Only Japan has a higher rate of 70%. Germany takes a maximum of 40%, while Australia and Canada, take nothing.
When you add-up your federal, state, probate, legal fees, accounting fees, appraisal fees, administrative and executor fees, and etc. fees, ……. it could easily cost you 70 to 80% of your estate. You can avoid these unwanted results with the Ultra Trust™ or the Medallion Trust™.
NOTE: The new 2001 tax PHASE-IN for estate taxes, changes absolutely nothing. The estate tax is the only voluntary tax. The new laws have added confusion. You can avoid the voluntary estate tax by simply engineering an irrevocable trust.

2. The “Trustee”

The trustee is the guy who manages your trust assets. Great care should be taken in your selection of your trustee.
The trustee is bound by the trust document (contract) and he has a duty to protect trust assets for the beneficiaries. The independent trustee manages, holds legal title to trust assets, and exercises independent control.
The trustee can be your lawyer (worst person you would ever want to trust), your accountant, best friend, or any-one you trust who is not a relative by blood or marriage. You may have more than one trustee. I usually recommend two trustees in all cases of $500,000 or more.

#Accountability of trustee

The law imposes strict obligations and rules on trustees including a duty to account for any benefits the trustee may have gained directly or indirectly from a trust. This goes beyond fraudulent abuse of position by a trustee.
There is a basic rule that a trustee may not derive any advantage directly or indirectly from a trust unless expressly permitted by the trust, for example, where he is a professional trustee and the trust provides specifically for a right to make reasonable charges for services. However, full disclosure of the basis and amount of charges is required.
The trustee of an “Irrevocable Trust” has sole discretion over trust assets. Your selection of your trustee must be a carefully planned decision.
The significant item to remember is that an “Irrevocable Trust” gets the assets completely out of your (Grantor’s) name and in return you get complete asset protection, elimination of probate, elimination of estate or inheritance taxes, in certain cases a tax deduction for the assets contributed to the trust, and finally, under certain conditions other uncommon tax benefits not otherwise available.
Examples of irrevocable trusts are: the Ultra Trust® the Medallion Trust® the Vertex Trust® the Charitable Remainder Trust, the Charitable Lead Trust.

#Duty of trustee is to obey trust document for benefit of beneficiaries

The most important rule relating to the duties of a trustee is that requiring them to obey the directions in the trust deed both with regard to the interests of the beneficiaries (i.e. who is entitled to what) and with regard to the administration of the trust (managing the trust property). Trustees are also subject to very strict standards as to the way in which their powers and discretions may be exercised.

Fiduciary relationship of trustee

The courts regard a trust as creating a special relationship which places serious and onerous obligations on the trustees. Thus the law regards the special “Fiduciary” relationship of a trust as imposing stringent duties and liabilities on the person in whom confidence is placed – the trustees – in order to prevent possible abuse of that confidence. A trustee is therefore subject to the following rules:

A. The Trustee can have no private advantage

A trustee is not permitted to use or deal with trust property for private direct or indirect advantage. If necessary the court will hold him personally liable to account for any profits made in breach of this obligation

B. The Trustee must have the best interests of the beneficiaries

Trustees must exercise all their powers in the best interests of the beneficiaries of the trust.

C. The Trustee must act prudently and is under fiduciary duty to do so

Whether or not a trustee is remunerated he must act prudently in the management of trust property and will be liable for breach of trust if, by failing to exercise proper care, the trust fund suffers loss. In the case of a professional the standard of care which the law imposes is higher. Failure to exercise the requisite level of care will constitute a breach of trust for which the trustee will be liable to compensate the beneficiaries. This duty can extend to supervising the activities of a company in which the trustees hold a controlling interest.

Additional:

In cases of substantial assets, you may add one other safety measure, “the Trust Protector.” The trust protector’s sole function is to hire and fire trustees, at will and without explanation.

3. “Beneficiaries”

The beneficiaries is the reason for your trust (contract).
Your beneficiaries are the guys that will enjoy the benefits of your trust assets. They include, wives, children, grandchildren, charitable organizations of every color and variety.
The length of your beneficiaries is unlimited. Beneficiaries could include the original grantor, but that would be self defeating. Generally, trusts are irrevocable. The grantor gives-up his assets to gain asset protection, elimination of probate, elimination of estate taxes, and gain certain uncommon tax advantages. Any degree of control by the grantor will render the trust revocable and subject to court discretion.
The period of time of the trust depends on the selection of your trusts legal jurisdiction. Most states and countries have rules against “perpetuities.” That’s to say, that your trust must have an end. Selection of your trust’s Jurisdiction in the United States or outside the United States depends on the degree of risk to be assumed by you. Foreign Asset Protection Trusts (FAPT) are significantly stronger than domestic trusts. Judgments are generally not enforceable outside the United States.

The contract

The trust document (contract) can be as little as three pages and as long as fifty pounds of paper. The more complicated you make it, the more complicated it is to administer. Simplicity is the key.
Trust assets may include, your personal residence, your investment account, other real estate, your business, limited only by your valuable assets you wish to contribute to your trust.

The trust generally obtains a federal identification number and files it’s own tax return. Distributions to beneficiaries, may or may not be taxable, depends on the nature of the underlying assets.
Finally, a trust may be a business, however it’s difficult for others to do business with you, since the trust is really a “private contract” between the grantor, the trustee, and your beneficiaries. Your business partners would more likely ask for a complete copy of the trust agreement and they would have their attorney look it over. As a consequence, most will not do business with a trust, but they will do business with other recognized legal entities such as a Limited Liability Company, Corporation, Partnership, etc. for which the trust may own.


FINAL WORD ABOUT TRUSTS

Before you implement your trust, be absolutely certain that you understand these facts:

A trust is a form of ownership, which is controlled and managed by your designated “independent” trustee, that completely separates responsibility and control of trust assets from your benefits of ownership (you no longer own or control your assets). The IRS recognizes numerous types of trusts and other legal arrangements commonly used for wealth preservation and legal protection against potential lawsuits, elimination of probate, and elimination of estate taxes. The independent trustee, manages the trust, holds legal title to trust assets, and must exercise independent control, anything short of the above facts is pure toilet paper. ALL trust income is taxable to either the trust, beneficiaries of the trust, or the taxpayer unless it’s specifically exempted by the Internal Revenue Code (IRC).

Eldercare with Medicaid: Senior Transfers Assets before Nursing Home Care

Posted on: January 26, 2017 at 1:47 am, in

ULTRA TRUST® – Medicaid Benefits

Set up a Personalized, Court-Tested Medicaid Trust now in only a few hours
“The Deficit Reduction Act of 2005 (S.1932) [DRA]” signed by the President on Feb. 8, 2006. The Act established a June 30, 2006 deadline for the Secretary of Health and Human Services (HHS) to release regulations for states to come in compliance with the new law.
Among other provisions, … the new law places severe new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care.
The law extends Medicaid’s “lookback” period for all asset transfers from (3) three to (5) five years, and changes the start of the penalty period for transferred assets from the date of transfer to the date when the individual transferring the assets enters a nursing home and would otherwise be eligible for Medicaid coverage.
In other words, these new Medicaid rules are specifically designed to “impoverish the healthy spouse.”
This is an extreme. If you’re approaching the Medicaid Nursing Home Spend-down Provisions…you have to pay attention to these new very restrictive regulations. …The healthy spouse can find him/herself out in the street. If you have parents in this predicament, YOU better take note because you will end-up supporting your parents, specifically when they now have substantial assets.

Living Revocable Trust

Posted on: January 26, 2017 at 1:22 am, in

Watch the video on 'Living Revocable Trust'
Like this video? Subscribe to our channel.

A Living Trust or Revocable Trust, or a Revocable Living Trust, are the same Trust. The word “revocable” says it all. The “Grantor” the guy with the assets, transfers his assets to a “Trust” where he is the “Trustee” for the benefit of all “Beneficiaries”, which includes himself and others. In other words he has kissed his hand and declares himself to be the “Pope.”
The revocable trust is not worth the paper it’s written on. The revocable trust does not protect the assets from potential frivolous lawsuits. The revocable trust does not eliminate the estate tax. The revocable trust was designed to avoid the probate process but nothing else.

SO, WHAT’S A “TRUST”?
A “Trust” is nothing more than a contract. The concept of a trust was first used in Anglo Saxon times and is contractual arrangement whereby property is transferred from one person (The Grantor) to another person or corporate body (The Trustee) to hold the property for the benefit of a specified list or class of persons (The Beneficiaries).
Although a trust can be created solely by verbal agreement it is normal for a written document to be prepared which evidences the creation of the trust (the Trust Deed), sets out the terms and conditions upon which the trust assets are held by the Trustees and outlines the rights of the Beneficiaries. In essence, a trust is not dissimilar to a will except that assets are transferred to trustees during lifetime rather than those assets being transferred to executors on death. The trust deed is analogous to the deed of will.

WHAT’S A “GRANTOR”?

He’s the guy with the buck; the owner of the asset(s). The grantor’s motivation is to get asset(s) out of his name for either some or all of the following:
  • Asset protection / wealth preservation
  • Reduce potential frivolous lawsuits
  • Elimination of the “probate process”
  • Elimination of estate taxes
  • To gain some tax benefit or some other tax deferral benefit.
If the “Grantor” initiates the trust (contract), it’s called a “Grantor Trust,” otherwise it’s called a “Non-Grantor Trust.” To me, it’s just legal garbage so lawyers can charge you more.
If the “Grantor” wants to retain certain control over his asset(s), it’s called a “Revocable Trust”; otherwise, it’s an “Irrevocable Trust.”
Revocable / Irrevocable has significant asset protection and tax differences.
“Revocable,” is like the kid next door that brings the ball to play basketball with the other kids. Everything is fine, as long as he makes the rules, and he makes the rules as he goes along. If you don’t agree with the rules as he makes them up as you play, he takes the ball and goes home. The ball game is over.

LIVING TRUSTS ARE OUTRIGHT DANGEROUS

The Living Trust can destroy your estate in the event of a lawsuit, serious illness, or elderly care. One name given to a “revocable” trust is the “Living Trust” The sole purpose of the Revocable Living Trust is to “eliminate the probate process.”
  • Assets in a trust, avoids probate.
  • Assets that are NOT in a trust goes to probate, with or without a will.
The living Trust is outright dangerous for asset protection, wealth preservation, and estate tax elimination. It’s obsolete for assets greater than $1,000,000. With the Living Trust the owner of the assets retains significant power over his wealth and will NOT insulate assets from the lawsuit explosion. There’s absolutely no tax benefit, no asset protection and no wealth preservation benefits with the “Living Revocable Trust.”

THE “TRUSTEE”

The Trustee is the guy who manages your trust assets. Great care should be taken in your selection of your trustee.
The trustee is bound by the trust document (contract) and he has a duty to protect trust assets for the beneficiaries. The independent Trustee manages, holds legal title to trust assets, and exercises independent control.
The trustee can be your lawyer (worst person you would ever want to trust), your accountant, best friend, or anyone you TRUST who’s not a relative by blood or marriage. You should not have more than one trustee, however, I usually recommend one trustee and one trust protector in all cases of $750,000 or more.

ACCOUNTABILITY OF TRUSTEE

The law imposes strict obligations and rules on trustees including a duty to account for any benefits the trustee may have gained directly or indirectly from a trust. This goes beyond fraudulent abuse of position by a trustee.
There is a basic rule that a trustee may “not” derive any advantage directly or indirectly from a trust unless expressly permitted by the trust; for example, where he is a professional trustee and the trust provides specifically for a right to make reasonable charges for services. However, full disclosure of the basis and amount of charges is required.
The trustee of an “Irrevocable Trust” has sole discretion over trust assets. Your selection of your trustee must be a carefully planned decision.
The significant item to remember is that an “Irrevocable Trust” gets the assets completely out of your (Grantor’s) name and in return you get complete asset protection, elimination of probate, elimination of estate or inheritance taxes, in certain cases a tax deduction for the assets contributed to the trust, and finally, under certain conditions other uncommon tax benefits not otherwise available. Did I mention it’s the most tax efficient way to transfer your wealth to your next generation?
Duty of trustee is to obey the trust document for the benefit of beneficiaries.
The most important rule relating to the duties of a trustee is that requiring them to obey the directions in the trust deed both with regard to the interests of the beneficiaries (i.e. who is entitled to what) and with regard to the administration of the trust (managing the trust property). Trustees are also subject to very strict standards as to the way in which their powers and discretions may be exercised.

FIDUCIARY RELATIONSHIP OF TRUSTEE

The courts regard a trust as creating a special relationship which places serious and onerous obligations on the trustees. Thus the law regards the special “Fiduciary” relationship of a trust as imposing stringent duties and liabilities on the person in whom confidence is placed – the trustees – in order to prevent possible abuse of that confidence. A trustee is therefore subject to the following rules:
  1. No private advantage – A trustee is not permitted to use or deal with trust property for private direct or indirect advantage. If necessary the court will hold him personally liable to account for any profits made in breach of this obligation.
  2. Best interests of beneficiaries – Trustees must exercise all their powers in the best interests of the beneficiaries of the trust.
  3. Act prudently – Whether or not a trustee is remunerated he must act prudently in the management of trust property and will be liable for breach of trust if, by failing to exercise proper care, the trust fund suffers loss. In the case of a professional the standard of care, which the law imposes, is higher. Failure to exercise the requisite level of care will constitute a breach of trust for which the trustee will be liable to compensate the beneficiaries. This duty can extend to supervising the activities of a company in which the trustees hold a controlling interest.

ADDITIONAL SAFEGUARDS OF ASSETS

In cases of substantial assets, you may add one other safety measure, “the Trust Protector.” The trust protector’s sole function is to hire and fire trustees, at will and without explanation. The Trust Protector can save unwanted and often unpleasant results (i.e. your wife runs away with the trustee).

“BENEFICIARIES”

The beneficiaries are the reason for your trust (contract).
Your beneficiaries are the guys that will enjoy the benefits of your trust assets. They include, wives, children, grandchildren, charitable organizations of every color and variety.
The length of your beneficiaries is unlimited. Beneficiaries could include the original grantor, but that would be self-defeating. Generally, trusts are irrevocable. The grantor gives-up his assets to gain asset protection, elimination of probate, elimination of estate taxes, and gain certain uncommon tax advantages. Any degree of control by the grantor will render the trust revocable and subject to court discretion.
The period of time of the trust depends on the selection of your trust’s legal jurisdiction. Most states and countries have rules against “perpetuities.” That’s to say, that your trust must have an end. Selection of your trust’s Jurisdiction in the United States or outside the United States depends on the degree of risk to be assumed by you. Foreign Asset Protection Trusts (FAPT) are significantly stronger than domestic trusts. Judgments are generally not enforceable outside the United States.

Getting Sued Hiding Assets

Posted on: January 26, 2017 at 1:07 am, in

Watch the video on 'Getting Sued Hiding Assets'
Like this video? Subscribe to our channel.

You just had a car accident causing a fatality or a disability. You are handed a ticket and released with a warning not to leave the state. You call your lawyer, you’re getting sued, you ask about hiding assets.
Your lawyer is going to tell you, there’s nothing you can do.
In my book, it’s better to do something than nothing. Exposing your open wallet for every potential creditor is not in my vocabulary. Your insurance company is your first line of defense. They will send a team of lawyers limited to your insurance coverage. But the Insurance Company is not going to cover your negligence.

Taking stack of what you own and how it’s going to evaporate between legal fees and court decisions, completely out of control.
Your lawyer is partially incorrect. A judge is going to decide how much guilt you are going to bear. Your police are going to determine the amount of negligence and possible criminal prosecution. You will have to defend yourself on both fronts. Most people will hire one attorney to handle the civil and criminal. In my opinion, that’s wrong. Criminal attorney are trained differently. The criminal side of life is to put up defenses to keep you out of jail. The civil attorney is to keep your assets. They are different defenses with different objectives.

4 THINGS YOU CAN DO IMMEDIATELY TO PROTECT YOUR ASSETS:

  1. Reposition your asset(s) with an independent trustee through an irrevocable trust, before the lawsuit is filed.
  2. Have your documents notarized and filed with the registry of deeds.
  3. Avoid fraudulent conveyance by transferring asset at less than it’s fair market value.
  4. Hire an expert defense lawyer.
  5. Will it work? It depends. But it’s better to give them the run around to your assets than a straight line to your bank account.

Offshore Asset Protection

Posted on: January 26, 2017 at 12:28 am, in

Watch the video on 'Offshore Asset Protection'
Like this video? Subscribe to our channel.

The litigation explosion are forcing professionals and small business owners to focus on ways/strategies to protect their savings, investments and other accumulated assets that may become attractive to potential contingent fee trial lawyers.
Presently, well over half the world’s wealth moves around internationally, taking advantage of business opportunities. National political boundaries, from a financial point of view, are becoming virtually transparent. Many Americans have come to the realization that the only way for them to protect their assets is to hold international assets. This offshore asset protection strategy has nothing to do with tax evasion and everything to do with the creation and protection of wealth.

In the United States, the legal system is often stacked in favor of the plaintiff and against the defendant. The corporate veil is routinely ignored. This encourages the filing of spurious lawsuits.
For a mere filing fee, a contingent fee lawyer and his client risk very little to see how things turn out.
The possibility of being on the receiving end of a ruinous judgment can instantly result in the loss of a lifetime’s accumulation of hard work. Lawyers for plaintiffs only prosecute cases they believe will pay off. The largest growing business in America is contingent fee lawyers, just look in the yellow pages of your phone book.
The Internet has facilitated an exponential rate of detailed information about your personal and/or your business accounts, property ownership, investment holdings, income, savings, and many other facts about you, your business, your associates, your buying/spending habits, and so forth.
Most trial lawyers will tell you, that forming U.S. based corporations for asset/wealth protection is not worth the certificate it’s written on. Judges will inform you that if any asset is within their jurisdiction anywhere in the U.S. they have the power to redistribute your wealth.

SO WHY USE OFFSHORE ASSET PROTECTION?

Many international jurisdictions impose less governmental regulatory restrictions and reporting, less taxes on their assets and income, greater flexibility and disclosure requirements. Individuals, professionals, entrepreneurs, and their companies adopt an aggressive policy to safeguard and preserve their wealth/assets from predators and their very clever lawyers, while significantly reducing their costs of doing business.
An offshore asset protection Corporation or other offshore Foreign Limited Liability Company (FLLC’s), or International Business Company (IBC’s) or other legal entities can conduct any type of business in the United States. You sacrifice nothing by having a corporate veil with real teeth. An International Business Company (IBC) is an offshore corporate legal entity that does not have to comply with a U.S. based judgment.
Judgments are not enforceable in non-United States jurisdictions. U.S. contingent fee lawyers and their clients have a significant jurisdictional problem: only citizens of the tax haven jurisdiction can practice law. U.S. lawyers or their clients will have to hire a local law firm and pay up-front legal fees, post bonds, pay court costs, and pre-pay other expenses to pursue their claims. Generally speaking, the local authorities frown upon foreign-generated claims/judgments. “You are in your home-country.”
The need for international diversification arises because of perceived shortcomings in the U.S. judicial, legislative, and political processes. Once the plaintiff see the uphill battle involved, plus the enormous costs out of his/her own pocket, he/she may either re-evaluate the merits of filing a lawsuit or settle for a fraction of the settlement he/she may have received in a U.S. Court. This fact alone can become your catalyst for good financial offshore asset protection planning and save thousands off your liability insurance premiums.
Foreign asset protection is the Rolls Royce of asset protection planning. For most Americans it would be overkill. For an asset protection fortress within the United States, the Cadillac of asset protection is the Irrevocable Trust combined with a Limited Liability Company.
For additional reading on offshore tax havens, llc, international business company, foreign llc:
Learn more about irrevocable trusts and asset protection:

Asset Protection from Medicaid

Posted on: January 26, 2017 at 12:04 am, in

What’s an asset protection trust? What’s a Trust?

Watch the video on 'Asset Protection from Medicaid'
Like this video? Subscribe to our channel.

The Deficit Reduction Act of 2005 established a June 30, 2006 deadline for the Secretary of Health and Human Services (HHS) to release regulations for states to come in compliance with the new severe new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care.
The law extends Medicaid’s “lookback” period for all asset transfers to 5 years, it was originally 3 years and changes the start of the penalty period for transferred assets from the date of transfer to the date when the individual transferring the assets enters the nursing home. Qualification to enter the nursing home is achieved when the individual is out of funds, meaning he/she cannot afford to pay the nursing home. The new federal law applies to all transfers made on or after the date of enactment, February 8, 2006. Any transfer made before February 8 falls under the old transfer rules. Exact enactment provisions are state by state, but it’s clear that non-compliance by 50 state legislatures puts their federal funding at risk.

You can protect yourself from the Medicaid nursing home care by taking action now while you still have your health.
You can reposition (transfer) your assets from you to an irrevocable trust with a truly independent trustee. The key is the “Independence of your Trustee.” The trustee cannot be any-one related to you by blood or marriage. And, you must be willing to give-up complete control over your assets. This lack of perceived control is the most difficult to achieve. Seniors have a deep sense of independence by their ability to control and manage their assets.
Revocable or irrevocable trust, what’s that mean? Revocable is when the original person with the assets transfers (repositions) the assets to a trust with strings attached. The tax lingo is “grantor-type trust. The “strings” when the original grantor (person with the assets) elects himself as the trustee, and the beneficiary of the trust. The grantor, the trustee, and the beneficiary are the same person. Effectively you have kissed yourself on the hand and blessed yourself as the pope. This simply will not work. Period.
An irrevocable trust is when the grantor (the person with the assets) gives-up complete control to an independent trustee who in turn will use his judgment as trustee to manage the assets for the beneficiaries of the trust. The fiduciary relationship of the trustee is to the protection of the assets at any cost. The trustee must protect and must diligently invest under the prudent man rules, he cannot ever deal for himself. The courts do not look favorably on dereliction of duties while serving as trustee. An irrevocable trust is the only significant asset protection device for avoiding the Medicaid spend-down provisions.
Asset protection from Medicaid requires foresight and a strong conviction to walk away from perceived control. Inaction is devastating. Seniors must use all their funds first, then qualify for the nursing home. It’s clear, that these new rules are designed to impoverish the healthy spouse.
Rocco Beatrice, CPA, MST, MBA, CWPP, CMMB, CAPP
Managing Director, Estate Street Partners, LLC
Mr. Beatrice is an asset protection, award-winning trust and estate planning expert.
Set up a Personalized, Court-Tested Medicaid Trust now in only a few hours

Senior Medicaid Asset Protection

Posted on: January 25, 2017 at 11:40 pm, in

What’s an asset protection trust? What’s a Trust?

Watch the video on 'Senior Medicaid Asset Protection'
Like this video? Subscribe to our channel.
As tax preparation time begins, many seniors are asking to include Medicaid asset protection as part of their tax planning strategies. For those of you not familiar with the 2005 Tax Reduction Act, some of the provisions address specific transfers by seniors under the new Medicare nursing home provisions. Under the new provisions, before a senior qualifies for Medicare assistance into a nursing home, they must spend-down their assets. These new restriction have a 5 year look-back, used to be 3 years. And used to be that each spouse had a one-half interest in the marital property, it now appears that all the marital assets are to be spent-down. I have not seen specific regulations but it appears that the healthy spouse will be left without any assets if one of them gets sick.
Suggestions by seniors have been to transfer their assets to their children. Although this option is available, I’m not sure that it’s a good option. What if the child decides to use the asset for themselves, what if they get divorced and the judge awards assets originally intended for the parents to the divorcing wife’s decree, what if the child get’s sued?
There are also tax implications. If the assets are transferred to the child for less than fair market value, then it’s a taxable gift. Even worse, if this type of transfer to the child is completed before the 5 years-look back, is it a “fraudulent conveyance?”
Medicaid asset protection has to be done very carefully. Planning in this area is evolving. There are a lot of eldercare law firms popping up all over the place. I have been approached by such a firm to send them clients. They claim that they can structure a new deal whereby the nursing home won’t be able to attach assets even after they enter the nursing home.
I know this much, any method used to deflect assets from the original owner has to be done at it’s fair market value. For example you just can’t transfer your house from you to your child. There are tax consequences. Did you just sell your house? Or did you just gift your house? Who will determine the fair market value? Did you get a genuine appraisal? If therefore, it’s at less than fair market value (willing buyer and willing seller, neither under compulsion to buy or sell, each acting in their best interest) did you just create a more challenging problem?
Any method whereby there’s an element of strings attached, it’s revocable and therefore you have done nothing to disassociate yourself from your asset. One can challenge your intent, to divert assets for the purpose of defrauding a potential creditor and failure to have filed a gift tax return has statutory penalties, and interest, worse- if Medicare intended, criminal?
I am aware of only one method of disassociating yourself from your asset (personal residence, your CD’s, your investments, vacation spot) is to give it away. Period. You can gift it to your children, pay the tax and that’s it. The problem is that you no longer have any control and you are at the mercy of your child’s good intentions and a blessed spouse. Risky? You bet!
An irrevocable trust with an independent trustee (not related to you by blood or marriage) will fit the bill. An irrevocable trust, is an irrevocable contract between you and the independent trustee to manage the assets for the benefit of all beneficiaries. You and your spouse can become beneficiaries along with your children and grand children.
Timing is extremely important. If the transfer (repositioning) of your valuable assets is done before the 5 years, chances are good that it will stand-up in court. What if it’s before the 5 years are up? Is your Medicaid asset protection plan still good? In my book it’s better to have done something than nothing.
Rocco Beatrice, CPA, MST, MBA, CWPP, CMMB, CAPP
Managing Director, Estate Street Partners, LLC
Mr. Beatrice is an asset protection, award-winning trust and estate planning expert.
Set up a Personalized, Court-Tested Medicaid Trust now in only a few hours

How to Hide Assets

Posted on: January 25, 2017 at 1:46 am, in

Watch the video on 'How to Hide Assets'
Like this video? Subscribe to our channel.

In social functions, I always get asked about How to hide assets. From who are you trying to hide your assets from? Is there a legitimate way to hide your assets?
You will know if you have succeeded in hiding your assets if an asset search by an extremely interested party does not reveal your identity. In a post 9/11, it’s not possible. Everything has become more transparent with the passage of government banking acts.

Interested parties have a way of finding the true owner for the right price. The information access on the Internet today is similar to an athlete on steroids. Anything you do is public knowledge.
However, the original owner and its present owner can legally be changed without having to go offshore. Legitimate repositioning of assets from you to an irrevocable trust is perfectly legal. The fact is, if your assets are owned by a subchapter S. Corporation or a Limited Liability Company and in turn the shares of the Sub S or membership units of the LLC are owned by an irrevocable trust, it’s the fortress of US Asset Protection.

Hide Your Assets with Irrevocable Trusts

How to hide your assets is as simple as the repositioning your assets through an irrevocable trust with a true independent trustee. The key to the transfer is the exchange of equal value in return for the asset, or the receipt of a fair market value for the asset transferred.
If you reposition your assets, you will no longer own them. If you don’t own assets, no one will want to sue you; no one will want to track you; no one will want to know your name. You don’t have to go offshore. US Laws, US courts will defend and support your asset protection system.

Give Up Control of Your Assets to an Independent Trustee

These laws have been defined by numerous court cases, over and over, right up to the Supreme Court. You must however, give-up control over your assets to a true independent trustee. Your asset protection system is enhanced when a Limited Liability Company further re-defines your asset protection system.

How the LLC Can Help Protect Your Assets?

The LLC is nothing new, but (until recently) states refused to legislate its existence. The LLC resembles the German GmbH the French SARL and the South American Limitada forms of doing business. The LLC allow small groups of individuals to enjoy limited personal liability while operating under partnership-type rules (rather than the complex rules that apply to corporate-type structures).
The LLC is recognized by the IRS as a “pass-through type” of disregarded tax entity. That is, the profits or losses of the LLC pass through the business and are reflected and taxed on the individual’ member’s tax returns of the owners, rather than being reported and taxed at a separate business level.
Other pass-through entities include general and limited partnerships, sole proprietorships and “S” corporations. The IRS now lets an LLC elect corporate tax treatment if it wants it (by filing IRS Form 8832, consult with your tax advisor).
Set up a Personalized, Court-Tested Medicaid Trust now in only a few hours

About the Ultra Trust®:

Read more articles on irrevocable trust asset protection:

To learn more about irrevocable trusts & senior elder care visit:

Learn more about how to hide your assets from Medicare:

Rocco Beatrice, CPA, MST, MBA, CWPP, CMMB, CAPP
Managing Director, Estate Street Partners, LLC
Mr. Beatrice is an asset protection, award-winning trust and estate planning expert.
Estate Street Partners, LLC
Uncompromising, Alternative and Exclusive Estate Planning & Wealth Management for an Accelerated Chartered Roadmap to Financial Success

Newton, MA office:

Riverside Center, 275 Grove Street, Building 2, Suite 400, Newton, MA, 02466
toll-free: 888-93ULTRA (888-938-5872)
tel: +1.508.429.0011
fax: +1.508.429.3034

Las Vegas, NV office:

Only by appointment: 2235 E. Flamingo Road, Suite 201-G, Las Vegas NV 89119
toll-free: 888-93ULTRA (888-938-5872)
tel: 702.615.7616 fax: 702.796.6694
rbeatrice@ultratrust.com

What’s an Asset Protection Trust?

Posted on: January 25, 2017 at 1:24 am, in

What’s an asset protection trust? What’s a Trust?

Watch the video on 'What’s an Asset Protection Trust?'
Like this video? Subscribe to our channel.

A “TRUST” is nothing more than a “CONTRACT” between the person who wishes to protect his assets (the Grantor) the person who will manage the assets (the Trustee) for the benefit of all Beneficiaries which may include the Grantor, his spouse, children and grandchildren.
The Trust Contract requires the transfer of assets from the original owner (Grantor) to a legal entity for the purpose for which the Trust Contract was created.

What type of trust, Grantor, or Non Grantor? What’s the distinction?

A Grantor Trust take a special place within the tax code. A “Grantor-Type Trust” for tax purposes is treated as a disregarded legal entity. The disregarded entity is “Income Tax Neutral” meaning that the original Grantor retained strings attached so that for purposes of the IRS he retains the assets in his complete control, thus he did nothing for the purpose of asset protection. Income tax benefits and income tax expenses are retained by the Grantor, thus he pays income taxes on the income of the trust. The Trust is a “pass-through” to his form 1040 i.e. real estate tax deduction and mortgage interest deduction on his person income tax return.

Revocable, irrevocable trust, what’s that mean?

Revocable is when the original person with the assets transfers (repositions) the assets to a trust with strings attached. The Grantor, the Trustee, and the beneficiary are the same person. Effectively you have kissed yourself on the hand and blessed yourself as the Pope. A revocable trust does absolutely nothing for asset protection. Many lawyers recommend revocable trusts for avoiding probate, recognizing that the trust is not worth the paper it’s written on for protecting assets against frivolous lawsuits and the avoidance of estate taxes.
An irrevocable trust is when the Grantor (the person with the assets) gives-up complete control to an independent Trustee who in turn will use his judgment as Trustee to manage the assets for the beneficiaries of the trust. The fiduciary relationship of the Trustee is to the protection of the assets at any cost. The Trustee must protect and must diligently invest under the prudent man rules, he cannot ever deal for himself. The courts do not look favorably on dereliction of duties while serving as Trustee. An irrevocable trust is the only significant asset protection device for avoiding frivolous lawsuits, avoiding the probate process, avoiding estate taxes, and is the only device for avoiding the mandatory spend-down provisions for qualifying into a nursing home.
An irrevocable asset protection trust when combined with a Limited Liability Company is an asset protection fortress, short of a foreign asset protection trust. A foreign asset protection trust is the Rolls Royce of asset protection, the irrevocable trust with an LLC is the Cadillac.

About the Ultra Trust®:

Read more articles on irrevocable trust asset protection:

To learn more about irrevocable trusts & senior elder care visit:

Testimonials

Posted on: January 24, 2017 at 4:58 am, in

Actual testiomonies and reviews of previous clients on how the Ultra Trust® successfully protected their assets

Greg P., Grays Harbor, WA

Like this video? Subscribe to our channel.
divider for testimonials

Elizabeth O., Memphis, TN

Like this video? Subscribe to our channel.
divider for testimonials

Mark T., Los Angeles, CA

Like this video? Subscribe to our channel.
divider for testimonials

Richard E., Nashville TN

Hello Rocco:

“Many thanks for your consultation this AM. I appreciate this information you’ve just emailed and plan to order the book tonight. I’ve read a ton of them – none come close to encompassing your strategies.
As it stands at the moment… my father MUST talk with his personal attorney to express his desires to release my sister concerning her current durable power of attorney – financial and medical. We have jumper through seemingly endless hoops by .. the best of intentioned broker/bankers at Wachovia. Nearly 6 months to get 6 simple stocks redeemed? …. Supposedly these funds are FINALLY going to be ready later this week and I don’t want to make any rash moves to thwart distribution!
I WILL get back with you later in the week.
Thanks again for your time and encouraging words Rocco – I’ve lost my Mom this year – My own sister has totally turned on me for just trying to do the best I can – Dad’s “dying a little faster each day” – my “lady’s” 25 year old son – 2 tours IRAQ-as Marine Tank Commander – weeks from joining Navy Seals – jumps in a pool headfirst in shallow water and now can’t move from the neck down permanently
Ain’t life crazy?”

divider for testimonials

Rick S., Massachusetts

“Most advisors are mainstream with mainstream ideas. You are definitely out of the box. Your ability to take apart complex issues and provide alternative solutions is simply remarkable. Your vast array of tax planning strategies are extraordinary. You are absolutely in my little black book of people to call.”
divider for testimonials

John F., San Francisco, CA

Like this video? Subscribe to our channel.
divider for testimonials

John M., Maine

“Dear Rocco, I write to express my greatest appreciation for the outstanding job you have done in compiling all of the vital information on asset protection and trusts. I especially want to acknowledge you for your gifted ability to transfer that knowledge to me in such an easily understandable manner. I hate to think how much I and my associates have spent over the years on so-called asset protection “experts” who don’t know 10% of what you know. Thank you for your commitment to excellence and for the ongoing contribution the Ultra Trust® is making to me and my business.”
divider for testimonials

Nick D., New York, NY

Like this video? Subscribe to our channel.
divider for testimonials

Bill W., New York

“Dear Rocco, if it wasn’t for you, I still would be in the middle of a most/most unpleasant event. Your persistence of repositioning my assets with three separate Ultra Trusts® definitely saved me from selling pencils on the corner of Broad and 42nd Street in Time Square.”
divider for testimonials

Michael M., Houston, TX

Like this video? Subscribe to our channel.
divider for testimonials

Mario B., Florida

“Short, snappy, and to the point, timely, and directly applicable. The tax deferral strategies and techniques are head and shoulders above what I have seen so far. Please don’t spread it around, I prefer to be one of the 1%.”
divider for testimonials

Craig L., San Diego, CA

Like this video? Subscribe to our channel.
divider for testimonials

Jeremy K., California

“Dear Mr. Beatrice: The information I learned from you is absolutely invaluable. I have listened to many “asset protection” attorneys. Their way of providing business asset protection is to buy more liability insurance and to eliminate the estate tax is to buy more life insurance. You don’t think they have a retainer contract with the insurance companies, do you? You’re underselling yourself. The topic of asset protection, probate elimination, and estate tax elimination is complicated, you have found a way to simplify with one Ultra Trust®.”
divider for testimonials

George S, Boston, Massachusetts

“There’s an ocean of information out there on the internet. But can you trust the internet to give you solid information/knowledge? I looked over your web site and I called you for more information. The best hour of my experienced life was to reach out to a most knowledgeable individual with a broad spectrum of gray-haired expertise. Most advisors are mainstream with mainstream ideas. You are definitely out of the box. I look forward to continuing our interactions.”
divider for testimonials

Karl K., Florida

“Mr. Beatrice, I didn’t know those tax saving concepts even existed. Thank you for taking the time to explain it to me in everyday language without the professional jargon.”
divider for testimonials

John S., Massachusetts

“As an insurance agent/broker I’ve gone through a lot of courses looking for this information. Your knowledge and crystal clear advice will help me improve upon the advice I give my clients.”
divider for testimonials

Joe P., Massachusetts

“Rocco, I have known you since a little boy from Italy. Then you counted on me for education advice, now the roles are reversed. I rely on you for financial advice to protect what I have left for my family. I wanted to let you know I’ve read your material on the Ultra Trust®, word for word; I find it to be very well laid out, easy to comprehend, and compelling to action There’s absolutely no excuse for delaying the implementation of an asset protection fortress.”

divider for testimonials

Edward, K. Colorado

“They just don’t teach this stuff in college. Some of these guys walk around with business cards indicating international business, but they just don’t have a clue on how to conduct business in a foreign country. They read textbooks and they try to apply textbook principles, but some of them have never worked in business or left the country. They never heard of an IBC or Foreign Asset Protection Trusts, or double stacking trusts, or U.S. reporting requirements. Their only advice is to talk to your accountant or lawyer. Wait a minute are they not the educators?”

divider for testimonials

Frank W., California

“Rocco, you have a very interesting way to look at a very important life turning planning issue. Your Ultra Trust® material was simplistic, educational, without goobly-gook that most lawyers hide behind. It’s been an experience. Thank you.”

divider for testimonials

Robert W., Michigan

“Brilliant tax deductions and essential wealth building ideas, that’s what I learned from you. When it comes to protecting assets, minimizing tax bites, and avoiding voluntary probate, there’s just not enough accessible good information out there. Thank you for taking the time and to make hear what I was not listening.”
divider for testimonials

Rick S., Massachusetts

“Mr. Beatrice, I learned more in two hours of your time than I have learned in the 20 years of seminars.”

divider for testimonials

Sheldon B, Massachusetts

“I have reviewed the information on the Ultra Trust® several times. I can honestly say that I learned a lot about probate and estate taxes in a very simplistic and clear terminology. I look forward to applying my new knowledge.”

divider for testimonials

Bob D., Massachusets

“Mr. Beatrice, Thank you for taking my call. It allowed me to really understand why the attorney who spoke at an “asset protection” seminar the other night really doesn’t seem to understand asset protection; a scary thought! If I were just sitting in the audience without ever studying this stuff I would view him as an expert and go with what he tells me!!! Thank goodness I learned proper asset protection from you.”