EVERY AMERICAN Needs A Living Trust In 2024... Here's Why

Welcome everybody to another Main street business podcast, live broadcast on YouTube. Excited to be here with you. My name is Mark Kohler. I'm a CPA attorney, best selling author, entrepreneur, real estate investor, and another American dreamer just like you. Trying to make it all work. No, it's tough out there. Economy is hard with the inflation. Real estate's holding strong with its values, but interest rates are still up. It can be a challenge. So hang in there. And I'm here with you every week trying to share strategies to build wealth, save taxes, and better structure your business to scale and grow. Now, an important part of all this is your estate plan or a trust, a living trust. Now, a lot of people say, well, I'm not rich enough, I don't need it. That's for old people. No, every American at some point is going to need a living trust. And, and I would venture to say 90% of you, including myself, we need it right now. The living trust is a very, very important document to help wealth builders, American dreamers. If you want to look at a cross section of my wealthy and successful clients, they all have a trust. They do. And you can't expect the divine and the world and the universe to drop wealth into your lap with hard work if you're not organized to receive it. And so that estate plan or that living trust is such a huge part of your structure for success. So today I want to give you the seven reasons why you need 11 living trust. If you check any of these seven boxes, you got to have a living trust. Now, before I get to these seven, I want to mention a couple things. I'm going to first explain what a living trust is about. Some of you are like, what the hell is a living trust? Well, explain it. Keep it simple and easy. The second thing I want to say is as soon as I run through these seven, my time is yours. I'm a tax attorney, practicing advisor for so, so many clients. And we have just a really robust law firm and a network of CPAs and enrolled agents around the country. I would love to help answer any of your questions in the tax and legal estate wealth building lane and point you in the right direction. So if you have any questions about your LLCs, your tax write offs, your S corporation, your trust, your crypto, your real estate, and you just don't have a lawyer on auto dial, I'm here for you today. So save up those questions. We'll get to those in a minute. I also have a couple codes and giveaways to our big event coming up in A month, three to four weeks. And would love to make sure you get a little special discount at that. Okay, so a living trust. What is it? A living trust is an agreement, a declaration of your assets. This is my living trust, and I want all my assets to go into this trust. And this trust is going to own these assets. So if anything happens to you, they all drop down into this trust. Now, while you're alive, there's no extra tax return. There's no extra cost of really maintaining the trust. You might want to update it every five or ten years, but it can provide a lot of benefits. First, some privacy. A lot of times that I don't want your name in the trust. Name it Blue Sky Trust, Green Tree Trust, whatever it is something that's unique and in most instances, you can keep your name off of it as trustee. Even now, owning real property, you got to get a little more creative, because on the title, the property recorded at a county, they want to see the name of the trust and the trustee's name. So you might have to have a kind of a acting trustee for you so that your name stays off public record. But other than that, the trust can own your LLCs, your corporations. We want it to own rental property through your llc, be the beneficiary of your life insurance and your retirement accounts and all sorts of goodies. I'm going to give you these seven reasons in a moment. But the privacy is a big deal. And when you die, it stays private. It helps you stay organized. When you have a trust, the trust becomes a way to really have a bead on your overall wealth and the legacy you're trying to leave. Also, you avoid probate, meaning no court is going to stick their nose into your life when you die. And probate can be very expensive in some states as even a percentage of your estate value. Next, it helps you leave your assets in a creative way. So you can be really tricky. They call it dead hand control. Your hand comes out of the grave and just messes with your family. So you can put special rules in there that kids get money when they're 25, 30, 35, when they go to school, don't go to school, get good grades, don't get bad, you know, just start a business, get married. You can put all these rules so that money drips out to motivate your family or kids to do things that you want. Now, some of you are like, well, I don't have any kids. Oh, that's even more challenging. Where does your stuff go? Does it go to your mom, your dad, your brother, your sister, your aunt. See, the state has a consanguinity chart that tells you it's a big word, consanguinity. But the state is going to take over and send the money where they think it should go. And that's why you see in the movie sometimes this niece or nephew getting money from their great aunt or great uncle. How do I get money from them? Well, they didn't have a plan, so the state just divvied it up amongst the family. So if you're single and no kids, you may think, well, I don't need to trust. If anybody needs to trust is you. Because where in the hell is your stuff gonna go? You don't have a spouse there with their hand out or kids out there with their hand out. Your stuff's gonna go to the state and the state's gonna divvy it out based on state law. It's not pretty. So you get to leave your assets in a very creative way. And then the final benefit of a living trust is a lot of other pieces come with it. You're going to get a will, powers of attorney for health care, finances. Pull the plug. If I'm a vegetable, I want a list of all my assets to be personal property of where it's going to go, like the piano, the guns. You can also put provisions in your trust for your pets. Who's going to raise my dog or my cat? 60% of Americans have a dog or cat. When you die, who's taking care of your animals? Guns. Another big one. Your media assets on your itunes collection or prime video collection. You've got to leave passwords and information for people if you want that stuff to live on. And don't even get me started with cryptocurrency. And your keys, your private keys, where's that list? If you died tomorrow, would someone know how to get that? Or is that just gone? So the living trust gets you organized. It gets you all put together. Now, I'm just going to show a diagram of this, and then I'll give you the seven reasons when you need a trust. And I'm going to tell you, 95% of you listening, you're going to hit one of these boxes. So what the living trust looks like in the trifecta is your revocable living trust. Revocable living trust is down here. Here's your 1040 tax return. And we divide your life in half and we put your operations over here. And your operations would either be a side hustle llc or you've converted it to an S corporation. So you've got your company, Ordinary Income on this side, Ordinary income, you might be selling a product or a service. We want those businesses owned by your trust on the right side, which is your assets. We want the trust to own your home, to be the beneficiary of your investment accounts, your crypto, I'll put Bitcoin, B, gold, silver. We want life insurance to end up in your trust. And then we have your LLCs that own rental property. And over here we have your 401k, your IRA, your Roth and your HSA. All of those cool tax strategies. We want every one of those to have your trust as a beneficiary. You should own nothing in this equation. I want your trust to own everything. Now, there's no asset protection with this type of trust. We can add that bell and whistle later. But even my most wealthy clients with intense asset protection, all we've started with the revocable living trust. And then they're going to add additional structures and barriers where needed. So we can add all sorts of goodies for asset protection. But the revocable living trust is revocable. You get to change it. You are the trustee and this is the symbol for change. So you can change it anytime you want. So that is the estate plan. That's where a living trust fits. Now, drumroll, please. This. These are the seven instances. And I'll give a quick reason why these seven situations when you. Absolutely, it's obvious, it's clear as day, need to get your freaking trust done. By the way, when you get out there, I'm going to just say this so you're not worried about it. I'm not. I don't have some big sales pitch for five or ten grand to go get your estate plan done. And there's lawyers that charge that and more. We have a special every year coming up here on Memorial Day where we knock a couple hundred dollars off and you can get into an estate plan for as low as 1600 bucks, 1500 bucks. It's all on our website. I'll make sure the link is in the description below. Kqoslawyers.com but we do estate plans across the country. If I have a client walk in the door and they're worth $10 million, they pay the same price as a young married couple that bought their first home and they're 25 years old, same cost, 1,500 to $2,500. And if any of you are paying more than that, for an estate plan, you better have a darn good reason for it. All right, here are the seven instances or reasons why you would need a trust. First, you own real estate. You own a home or you own rental property. If you own a home or have rental property and you die, even if your spouse is on the title, you might have that jacked up. It may be tenants in common without rights of survivorship, who knows? Happens all the time. You're going to have to go to court to get that real estate divvied out according to state law. A living trust, no court, no probate. Boom. So real estate is a big one. You want to make sure that it's simple and it's easy. And a living trust, okay, you say, well, Mark, I don't own any real estate. Okay, do you have any children? For any of you that have children right now, ages 1 to 90, well, I don't know, you could be 118 and you have a 90 year old child. That'd be pretty crazy. Anyway, if you have kids, young or old, you've got to have an estate plan and a living trust because you do not want to leave an 18 year old 500 grand from a life insurance policy or an old 401k or the sale of your home. Trust me, if my parents had died and left me 500 grand when I was 18, I would not be here today. Probably be in the Caribbean, long flowing hair, running on a beach, delivering towels and suntan oil to Scanli Cloud. Okay, sorry. I was just going off into what my life really could have been, but. But instead I'm a boring tax lawyer, so maybe it wouldn't have been a bad thing anyway. Okay, number two, that was children. If you have children, you need a freaking living trust. Three, you own a business, so you have an LLC or a corporation. If you have any business ownership at all and you die, who's going to handle your business? Who's going to take that business and collect accounts receivable, sell the assets, liquidate, blah blah, blah. Well, a court's going to get involved and could very well take over. So if you have a business. Okay, now some of you may go. Mark, I don't have real estate, I don't have children and I don't have a business. Okay, do you have a retirement account? Do you have a 401k or an IRA? Where's that going to go when you die? Well, I named a beneficiary. Oh, is your beneficiary, they just going to get it outright? Do you have rules for that. Are you going to give it to charity? You want to give them the money with provisions, or you're just going to give it to them? If you have a retirement account, you may want to be creative and intentional about who's going to get your old 401k that you worked your ass off for, but you don't have that. Okay, do you have life insurance? That's number five. Do you have life insurance? Who's going to get your life insurance? And are they mentally prepared for it, financially prepared to handle it? Why not put it into a trust and divvy that money out over time? Is that trust money going to take care of your pets, take care of special people in your life? Number six, do you have cryptocurrency? Do you have investments? A stockbroke account, a Robinhood account, a Schwab account, if you have any investments at all, or crypto, you want to make sure that your living trust in the appendices or the exhibits and has the documentation of where these assets are at and how a trustee can go get them and then distribute them to who you want. If you're not organized and you die, there are so many assets that are just lost and given back to the state or just disappear. So that's number six. And number. Now you may say, I don't have crypto, I don't have investments, I don't have children, don't have real estate, don't have a business, don't have a retirement account, don't have life insurance. Wow. You can't check any of those boxes. The final box is you're old. Now, the question of old is very subjective, but if you're old, you might want a living trust. So if anything happens to you, someone can manage. You don't have much here, so you can't check any of these other boxes, but they can handle your affairs, your Social Security, and just take care of you by having powers of attorney to handle your income and assets if you're a vegetable or incapacitated. So that's my seven reasons. So if you cannot check any of those boxes, well, you can just do a handwritten will and wait until one of these seven things happen, and then you're going to need a trust. So if you've got a little bandwidth, it doesn't hurt to get it done now. All right, so before we go to questions and I'm all yours. We can talk about estate planning, we can talk about the trifecta, but let me just say in three weeks on June 6th in Salt Lake City, we are doing a three day tax and legal workshop called Tax and Legal 360 with parties and food, three days of breakout sessions where you the business owner are going to make thousands and thousands of dollars getting better organized. There's going to be CPAs, enrolled agents, lawyers, financial advisors. Networking with you is for professionals and business owners where they all come together and work together to get a better result with their American dream. You can watch it virtually online or you can come in person. We're going to put down in the chat here or the description 360 +1 so you can bring a friend for 30% off once you buy your tickets. So kind of a Bogo thing. And we have 360 premium another code that would give you 20% off the premium ticket. By the way, the general admission ticket is 500 bucks for three days of content, 20 speakers, 24 different breakout sessions and eight main stage sessions panels. It is going to be incredible what you walk away with knowledge wise. I've said to so many people, if I don't save you your cost of coming in taxes in the first year, I'll give you your money back. Is that legit? And talk about wealth building, asset protection, let alone tax savings. You cannot afford not to come. And I keep it in language that people can understand. This isn't a stick up your butt accounting seminar where you want to fall asleep and shoot yourself in the head. It's going to be awesome. All right, so we got some codes there down in the description. If you want to get your estate plan done, go to kkos lawyers.com let's make sure that's down in the description too. And you can schedule to get an estate plan done if you need one. All right, our first question. Zach, what do you got?

All right, happy to be on here with everybody. So the first question of the day is coming over from Instagram from Big Mac. He asks, isn't a trust taxed higher than an individual for retirement funds?

Yes, if you have an irrevocable trust. And that is not the trust we're talking about. A revocable living trust does not pay taxes, does not file a tax return. Everything you own flows onto your 1040. Now once you die and if that trust lives on and doesn't distribute everything within the first year and you might keep it and start distributing it when you when want to or not, there are ways to avoid the trust tax rate of nearly 40%. The trust does have a high tax rate, but that's Only for when you have a trust that's going to grow and build and live on after you're dead while you're alive. A revocable living trust does not pay taxes. It does not even file a tax return, but it gives you all these benefits. It's beautiful. That's why I'm saying every American needs a living trust at some point or another. And I would say 95% of them right now based on those seven criteria. Next question, Zach.

All right, next question is from William. Over on YouTube. They ask, what are the pros and cons of investing in REITs, real estate and dividend stocks?

Well, those are three very different things. Let's see if we get that down. REITs, those are called REITs. And then the other one was just plain old real estate.

Real estate and dividend stocks.

Dividend paying stock. Well, the I, I'm going to tell you honestly, of all three of these, the one that is the most sought after by my wealthy clients, the ones that I, the what I invest in, what I see rich people invest in, what the majority of wealthy people invest in. What gives you the most flexibility, makes you the most money on a return on investment, gives you the most control. Can we go whiteboard when I'm writing over there? And so of these three, the one that outperforms all the others and is the most profitable, the most flexible, the most common with my wealthy clients, you see it coming. Real estate. Now that could be single family homes, long term rentals, short term rentals, commercial rentals, storage units. It could be a variety of real estate in different asset classes. But people, the tax strategies are insane. They're awesome. And the ROI is incredible compared to stock dividends. Womp, womp, womp. Now Warren Buffett says, you know what I love get rich slow. Warren Buffett's like, we don't get rich quick, we don't get rich fast. We get rich slow by just investing in stock that we believe in, companies we use, and if they pay dividends, we reinvest them. In the long run, there's nothing wrong with that. And I'm not saying don't buy stock whether it pays dividends or not, but a stock dividends, your rate of return might be 5 to 10% at best. And that's it. There's no creativity, no tax benefits, no tax strategies. So that's number two on my list, and it is way, way down on the list. The last of these, which I am not a fan of, is the reit. That's a real estate Investment trust. You know why these were created so stockbrokers could make money selling you real estate. That's all it is. It's a structure that owns real estate, multifamily condos, commercial buildings. Billions of dollars are in REITs. And all these little people down here are like shareholders of stock. And you can buy into this REIT that owns real estate and get a rate of return that you have no control over. Again, if you do, I would be shocked if you had a 10% ROI on a REIT compared to even the s and P500. So they're there. You can't 1031 these things. They're just, I'm just not a big fan of the reit. I that'd be number three on my list if there's probably someone that's got a pro, but I've got a long list of cons. The one I would want all of you to focus is right here. Just real estate. Buy that cute little rental down the street. Start a fix and flip, start a rehab, start using and learning about real estate. That's what rich people do. So easy schmc. Next question.

All right, next one is over on Instagram from lgrc. They ask, do my wife and I need one trust or separate one?

Oh, great question. I would say most commonly a revocable living trust is a joint trust, husband and wife. I'd say 80 to 90% of the trusts we do here at the law firm are a joint revocable living trust, husband, wife. The times we do separate trusts is for a prenup or a post nup. So let's say both parties come to a marriage, they've got their own assets, they already have trusts, and it's just easier if they each keep their own trust. And then they maybe even create a third trust for stuff they're going to build together. So one has their trust for their family, one has trust for their family and then a joint trust for everything else. And that can work, but I would say that's 10% of the time because you're going to have a situation where it's a second marriage and or a prenup. Not that second marriages aren't common. They're very, very common. But a lot of times unless there's a prenup, it's just easier to combine everything into a joint trust. You might be doing a separate trust for some asset protection, but that's very challenging too. So I just say 80, 90% of the time you're just going to do a joint rlt. It's the way to go. Next question.

All right, next question. Over on YouTube from Harshall, they're asking essentially, will they be violating any self dealing regulations if they invest their solo 401k in their W2 employer via private placement? So they essentially want to know, are there any. Are the regulations different for ira?

I will say it's not self dealing. What you're looking for is the word called prohibited transaction. It's literally called prohibited transaction. Self dealing is a whole other. That word's used in other instances. So I'm going to rephrase the question for Everybody. Can my 401k or IRA or Roth invest in the company where I get a W2 and work? Maybe they're doing a private placement that's called a ppm. Maybe they're creating an esop. Maybe they have. It's a publicly traded company and you work for them. As long as you don't own more than 50% of the company, your 401k or IRA can invest in that company or whatever it's doing. Once you have control of the company and you're getting a W2 from it as well, your IRA and 401k cannot invest in that company. That would be a prohibited transaction. If you're asking this question, you're right up the alley of self directing, which we love. And get over our podcast, the Directed Ira Podcast. Directed Ira Podcast. You will love it. Watch the first 10 to 15 episodes on YouTube or listen on itunes and we break down the basics of self directing and cover questions just like this. Love it. Next question.

All right, next question. Over on Instagram from Rev Run, they ask, when does a revocable trust become an irrevocable? Isn't it not at death.

When you die. When you die. Now, if you're married and your spouse is the surviving spouse of the trust, it will live on revocably. That's typical. Husband dies, wife gets the trust. She could run it for another 20 years, then she dies, Then it goes irrevocable at that point. Now there are provisions that we can add. This is where his, hers and ours, kind of a second marriage. It's a joint trust, but it says, oh, when the husband dies, he wants to carve out a certain amount of money for his children from his prior marriage and say, okay, that becomes irrevocable and everything else is revocable and goes with the surviving spouse. So you can carve out some irrevocable provisions. But that doesn't automatically happen unless you do it. So Great questions, everybody. Are you having fun? Woo. Let's hear it. Man. I love it. It's good stuff. Next question.

All right, Yakko on YouTube asks, They're a sole proprietor and they just opened an LLC this week. Should they close the sole proprietor?

There's no way to close a sole proprietor. It just dies. Now, if you're. Let's say you're talking about a dba. A DBA is not a sole proprietor. A DBA is a registration that says you have the right to use that name. If you go open an llc, the LLC takes that DBA and the name is now gone. It's no longer a dba. The name goes with the llc. Okay, so that's point number one. A DBA is not a sole proprietor. It's like a trademark in a local state. And that DBA could be transferred to the llc. So that's. So when you set up the llc, by doing so, it automatically kills the dba. You don't have to do anything. The second thing is, you say, you said, we have a sole proprietor. We just formed an llc. Do we shut down the sole proprietor? The better way I would phrase it is the sole proprietors operations are going to be transferred to the llc. So from now on, your sales and income and expenses are going to go through the new LLC and its bank account. So to shut down the sole proprietorship, the only thing you do is file the final tax return, which will be a schedule. Well, no, because you're going to have an LLC now. So it's going to be the same schedule C. The last thing you do is probably just close down the bank account. So you're going to transfer the bank operations of the sole prop to the new LLC bank account. You can't use the same bank account because an LLC gets a tax ID number. So the LLC bank account is going to take over and it's going to get rolling and you're going to report it on the same place on your tax return. And remember, people, an LLC does not save you taxes. An LLC does not save you taxes. It's going to give this couple protection from a potential lawsuit. And now they can convert it to an S corporation, which can save them taxes. But the only thing you have to do to close down the sole prop is just close down the bank account. There's nothing to do at the state or Fed. Next question.

Next question is coming in from Facebook, from Cole Jones. They say, I recently won a lawsuit and I'm worried about people coming out of the woodwork or Trying to sue me. Would this type of trust cover my back should this happen?

No, it would not. A revocable living trust is not about asset protection. It's not. So if you just want a big lawsuit and you're sitting on 500 grand a mil, 2 mil, 5 mil, whatever it is, you want to meet with an asset protection lawyer right away. And we want to know where you're deploying this money. What are you going to use it for? Where can we put it? To try to protect it from a potential lawsuit. And you're still going to have a revocable living trust. But the revocable living trust is going to be coordinated with your asset protection plan. Now, the attorneys at my office, please, please be careful. Do not rush out there and buy the first freaking Wyoming company, Nevada company, Delaware structure from an influencer that's not even a lawyer trying to sell you this garbage. Get a second opinion from anyone that promises you amazing asset protection. They're going to go, oh, you can. The trick is to, you know, control nothing but own everything. Oh, we're going to set up an irrevocable trust and hide it here or there. We're going to set you up offshore. We're going to do it. You are going to get sold. So much garbage. That's why I've written a book trying to protect people from this crap. And they're going to charge five grand, ten grand, fifteen grand or twenty grand. I can't remember the last time I charged a client more than 10 grand. And we must have thrown in 30 different projects and hours and work. We just. It's crazy with these asset protection ripoff artists will charge. You can tell I've got some angst here. So before any of you go out and spend that type of money on some promise of freaking asset protection. And they're going to schmooze you hard. Hard. They're going to make me sound like I'm cheap and don't know what I'm doing. And they're better and smarter. Please get a second opinion. If you call our law firm, KQS Lawyers, you can have an asset protection comprehensive consult for fifteen hundred dollars or less. And we'll give you every frequent option on the planet to help protect your assets. And then you can choose what you want to do. You may set up a couple trusts, maybe a few grand here, a few grand there, you're done. There's not that many options. Be careful. Next question.

Next one is coming in from YouTube from Isabel, and she wants to know your Take on On Self Insured Life Insurance or MFTA Insurance.

Mfta. Oh, I love it. Another acronym some insurance company dreamt up to sell freaking life insurance. The same crap that's now not insurance isn't crap, just saying it gets oversold. Max Funded Tax Advantage Life Insurance. You know what mfta? You know what the acronym stands for? Max Funded Tax Advantaged Life Insurance. It's Whole life. It's the same shit that's been getting sold for the last 50 years and they just came up with a sexy name for it. Oh, I got something special. A Max Funded Tax Advantage Life Insurance. Yeah, it's vul Variable Universal Life, IUL Indexed Universal Life, Whole Life or a variation thereof. Now, before any of you financial advisors life insurance agents get pissed and send me hate mail, I'm going to say this. I love life insurance as an investment strategy, as a death benefit strategy for the clients that can afford it in perpetuity and have the wealth and assets to sustain the ongoing premiums or a one time premium. But the problem is all of these crappy life insurance agents that sell life insurance to every Tom, Dick and Harry as the next best thing to slice bread with people that are in debt. They get people to drain their 401k and retirement account to go buy life insurance. These people don't even have savings or a funded Roth or a funded 401k or a rental property. You may go, well, life insurance is better than rental properties. Really? I'll go toe to toe on that one because I can sell that rental. I can do a 1031 change, I can get tax benefits, I can grow it, I can build it, I can improve it. Life insurance. Yeah, let's talk about the big winner there. And anybody that's selling you a plan like this is someone that's getting a freaking commission to sell you that policy. Go talk to someone about the MFTA that gets no benefit from you buying it and who has a fiduciary duty, which means a lawyer or, or even a CPA to give you the advice that's the best for you. You'll get a different answer. Now, is mfta, whatever the hell they're calling it this week, bad? No. But you better have about nine other things in your life dialed in and have money coming out of your ears before you go do this thing. Man, I'm fired up today. I'm sorry.

Yeah, you are. Love it. All right, next one is on Instagram from Hudak. They're asking, should someone's s Corp be separate from the multiple businesses someone owns. For instance, the law firm separate from a consulting firm, from the main S corp someone uses.

So should they have different entities for different operations and they want to know if they should have multiple S corporations.

Should someone's escort be separate from the multiple businesses someone owns?

Yeah, let me state it this way, and I agree. I'm just going to say it a little differently. So if we go to the whiteboard and let's look at our trifecta. When you talk about an S corporation, we already know we're going to be on the left side. So we're talking about operations, we're not talking about holdings. S corporations are about operations. So your option one is you're going to just have all these businesses being ran out of One S Corp. You got URLs, you got trademarks, you got DBAs, you've got all these different operations, services and products and widgets and blah blah, blah. You can do that. But the person asking is saying, seems a little messy. I've got all these different operations flowing into 1s corp. Now what I do like is you have 1s corp. The last thing I want is a different S corp for every one of these options. So that's option one. Now, what I'd prefer, and the person asking this question is right on. So I really like this, is we're still going to have one parent S corporation, and then that parent S corporation is going to own subsidiaries. Now, I put subsidiaries above the S corp. So you might have an LLC that does land development, an LLC that's a law firm, an LLC that's a restaurant, an LLC that's an online marketing business, an LLC that does your books. So you can have all these different LLCs flow into 1s corp. Now you're getting protection from one another. And you can exit these in a creative way. You could have other partners of certain ones. Maybe you have a partner of this one and that one. These you own 100%. And you can have a game plan that's built around each one of these that's unique to that structure. And then they all flow down into your S Corp, where you take a W2 and a K1. So this is what I prefer. And it sounds like that's what you were asking, and that definitely is the way to do it. Talk to one of my tax lawyers and they can build a trifecta, a color diagram and go through the protocol for you to do the same thing.

All right, well, we'll go ahead and finish up with these last two questions here. This next one is coming up from Stirrup knowledge over on YouTube. They're asking, can a mortgaged house be placed in a Medicaid trust?

Yes. In fact, I thought you were going to say a living trust. So if we go back to our whiteboard here, you might have a revocable living trust and you're going to have it own your home. Now, your home might have a mortgage. That's okay. You're going to deed the property that was, it was in your name or you and your spouse's name. You're going to deed the property over to the trust. There's no due on sale clause. You don't have to call the bank and ask for permission. Just freaking do it and the bank's not going to care. I have talked to so many banking attorneys over the years and I've never had a client face the due on sale clause. This is such a normal process. So you're going to use a grant deed in the state of California, a warranty deed everywhere else. That's normal. And you're going to get this property transferred from the person to the trust. Now they added a twist. They said a Medicaid trust. Ooh. Now sometimes you can have a Medicaid trust right here or you can replace this with a Medicaid trust. Now a Medicaid trust is a whole other ball of wax. A Medicaid trust means you're trying to hide assets essentially or spend down mom and dad's or grandpa and grandma's assets so the government, the state will give them Medicaid. Now let me repeat this. Some of you may think, oh my gosh, I don't want grandma and grandpa to drain all the money in their bank account for hospice and the old folks home. I want that money. So I'm going to get mom and grandpa and grandma on Medicaid or mom and dad on Medicaid and let the state pay for everything. Do you think the state's thought of that strategy before? So what lawyers have tried to do in the elder law planning arena is they take grandpa and grandma's assets and put them in a Medicaid trust to try to lock em down and use the look back provisions of three or five years, depending on the state you're in, and try to hide assets or lock down assets so the state does not see them as grandpa and grandma's assets anymore. We're trying to get them away from grandpa and grandma and we put them in this trust. And yes, you can deed A property with a mortgage doesn't matter. Here's my cautionary point. Before you go down this path of setting up a Medicaid trust this weekend, just take one or two hours. Choose three assisted living facilities. Go walk in, walk around. And when you walk in, ask them, is this a Medicaid supported facility? And how much does Medicaid cover for the hospice and the care? If I was to admit my mom or dad or grandpa or grandma, I will tell you, nine times out of 10 you're going to be shocked, probably moved to tears and physically jolted at the care you receive. That Medicaid will pay for it is not pretty. Medicaid is a need based benefit for poor people. That's what it's for. I'm not trying to be rude or mean, but if you're trying to structure your life so you can live on Medicaid, I wanted to say something quite rude. I won't think twice. Try to figure out a better way to take care of your own long term care. Your needs or mom and dad's or grandpa or grandma's, then having them live under Medicaid provisions. It is not anything you would wish on your worst enemy. It's not pretty. So planning your life around Medicaid is something I will not do. Our firm does not do it. I don't believe in it. But people that need Medicaid, I want them to get it because they need it. Trying to help someone shoehorn their life into it. Use your own damn assets to pay for your stuff. Am I gonna get hate mail today? Probably.

Maybe. Well, we'll go ahead and wrap it up with a good one from the fan.

Good. A good question.

Yes. Over on Freaking a. They are 24, married with a 65k salary. They have a Coverdale school account created by their parents with over $140,000.

What kind of account? Coverdale School covered out with 140K.

That's what they say. What is the best way to keep as much money when withdrawing?

They're 25.

They are 24, married with a 65k salary.

Okay. And are they still going to college? Can you get that,

Nathaniel? If you want to clarify that in the comments below.

Yeah, I need a little more help here. And here's the thing. I love Coverdells. And

Nathaniel just said they're out of college.

Oh. Oh, okay. And Aston, Nathaniel? Well, his parents set it up for him, I'm sure. Okay. A Coverdell is meant to be used for college. If you don't use it, you're at age 30, it's distributed to you and taxed. So you can just sit it out until age 30. If you take it before age 30, I believe you're going to pay a penalty plus tax. So you want to. Now what I just confirmed here, this is correct. I'm like this. Your parents that set up the Coverdell can change the beneficiary of the Coverdell. And this is what I'd recommend you do. You go to your parents and go, hey, I'm done with school. We got 140k sitting here. Can you change the beneficiary to our, now our little granddaughter or grandson? They have a kid, right? You said they have a kid, didn't they said they had a child. Married.

They are married. They do not.

No kid. Okay, so the next snowstorm or, you know, cloudy night, you're gonna get it on and nine months from now you're gonna have a new beneficiary for your Coverdale. That's your game plan? Yes. I'm advocating sex and procreation here for your tax plan. So I want you to have a little baby and then you're going to go to mom and dad and go, hey, take that Coverdell and kick it down to our kid. And they can change the beneficiary, the person that set up the Coverdale, to Anyone under age 30 that is in their lineal line, which includes their spouse, child, grandchild, sibling, parent, niece or nephew, son in law, daughter in law, da, da, da. Now I would be careful going to your parents and say, hey, we're not going to use this money before age 30. You can change the beneficiary. They'll find out real quick. They could change it to a niece or nephew or someone else. You don't want that. You want the money to go to your kid. So make sure you get pregnant, have a child, then bring this up with your parents. You got five to six years to get it done. Then once you have your second or third child, your parents can go back and, and change it to a three way beneficiary. You want to know the coolest part here is you're really creating a legacy. You're going to have this account live on for your grand, your children, which are your parents, grandchildren. And the Coverdell can be self directed. You could do hard money loans, you can buy crypto, you can buy real estate. If that Coverdell is not making 15 to 20%, you need to get on it. So the Coverdell is a self directable account. They are so much better than the crappy 529s. So this $140,000 Coverdale, holy crap. You could have it worth a half a million in the next 15 years. Now your kids are going off to Harvard or wherever. So please learn how to self direct that Coverdell. Have a couple kids and have your parents change the beneficiary to the grandchildren. Oh my gosh. This is probably the most exciting, most exciting call I've had today. So this is. You got a lot of opportunity there. Meet with one of my tax lawyers to get some advice on the process and move your coverdell to directed ira.com go to our podcast Directed Ira Podcast to learn more about how to self direct your Coverdell. Well everybody, thanks for being here. Get over and sign up for the 360 event of the year. It will be in Salt Lake June 678 and 9434 days of parties and education in the tax and legal space. 500 bucks for a general ticket. It's a tax write off to come business owners, tax professionals, legal professionals around the country. It is growing like wildfire. Each event has grown by 30%. This is going to be a big event. We're excited to see you there. Look down in the description for some discount codes. Keep living the dream.