Trusts and Real Estate, Part 4 of 4: The Asset Protection Trust



The asset protection trust is more accurately called the Domestic Asset Protection Trust or “DAPT.” It is a highly protective, irrevocable trust and less than 20 states even allow them. Utah is one of the! Assets owned by this kind of trust can be protected from lawsuits, debt collection, judgments, bankruptcies and even divorce.

This is a different kind of trust than the family trust. In the family trust, you leave your assets to beneficiaries, like your children. In the DAPT, you actually leave the assets to yourself as beneficiary! That means they are still your assets; but they receive the protection as if you’ve already given them to someone else. That’s the key difference. However, it’s not for everyone.

First, this is a complicated and detailed trust. It’s usually more expensive to create and maintain than the other two types of trusts. Second, while you do have access to the income from trust assets, you cannot take “regular” distributions. So, if you need that income to live on and pay monthly bills, you can’t put those assets in this trust. There are also restrictions on who can authorize the permitted distributions.

Frustration Is High Right Now



I've written a fair amount over the past few weeks about all of the specific provisions in the CARES Act, related to economic stimulus checks, various tax savings strategies, financial implications, and then some.

And I will continue to be covering these topics in the weeks ahead.

But today I want to address you around this particular social moment we're in right now.

Yes, I'm a tax professional -- I'm not a counselor, religious leader or a psychiatrist, obviously -- but in the course of the last couple months, I have had the privilege to speak with MANY people about their finances, their mindset, and how they are responding to all of this.

Because you can pick your problem -- there are PLENTY all around us.

We have clients all over the map on just about every issue -- from virus measures, to civil liberties, to economic concerns, to re-opening, to medical concerns, to ... you name it. 

And almost NOBODY is satisfied about, well, anything.

I'm reminded of the old curse: May you live in interesting times.

(And do you want to know something fittingly ironic? The source of that curse is supposedly China ... but even THAT is unclear. Yes, these times are "interesting".)

What we are really seeing is a breakdown of trust, and it's happening all over the place. Trust in social and governmental institutions are at an all-time low, trust in the media ... even lower. Trust in our friends is even breaking down.

So much of this is driven by social-media-fueled anger and envy ... but let's not pretend these 
trends just suddenly "cropped up" after the invention of Facebook.

Our cultural agreements are fraying around the edges.

Which is why I keep coming back to this: how you carry yourself and your own mind is the 
most important aspect of this current crisis.

This has implications for your wallet, your family (if you have one), your friendship circles, your business (if you still have one), and your future.

You have a choice TODAY about how you funnel your energy and your attention. How will you 
treat those who disagree with you (on important things even)? How will you organize your lockdown-restricted day?

Unless your vocational calling requires you to run down various rabbit holes of viral pathogens 
or nefarious cabals out to take over the world ... ask yourself:

Does this information that you are consuming help you accomplish the mission you've been given in life?

Are you moving your family, your career, and your soul forward through what you are doing right now?

If the answer to those questions is still "yes", great.

But if it isn't ... may I humbly suggest the following:  

Rise above.

Yes, this can be especially difficult in this cultural moment. Yes, you might be massively affected by what is happening right now in our world. But YOU decide what drives YOU. Nobody else can do that for you. And will you move our local world forward? That's what we're trying our best to do here, with our tax clients and our blog friends. And I hope you'll join us.

BE THE ROAR not the echo®


Janet Behm
Utah Real Estate Accountants
(801) 278-2700

"CRISIS Action Plan" for my clients and friends:
1) Don't marinate in other people's panic. Be mindful of your social media consumption.
2) Continue to stay financially and logistically prepared for worsening situations.
3) Make sure you have some ready, liquid assets, if you are able. (I.e., cash in the bank, and in hand.)
4) Set aside plans for any big spending until the dust settles -- but especially look out for your small business owner friends and vendors.

Trusts and Real Estate, Part 3 of 4: The Family Living Trust


The family trust is to most common type of trust used in the United States. Most people have at least heard of this kind of trust and many have created one. The first thing I want to say is that EVERYONE needs a family trust! Whether you’re single or married, with or without children, or have small or large estate, you need a family trust.

The family trust is the core of your overall family protection plan because it is designed to own, control and allocate your assets after you die. Without a trust, your estate will end up in probate even if you have a will. Probate is an expensive, public court process. It typically costs more than a family trust. Your estate and property become public information. And the court will end up dictating who receives your assets.

Most family trusts come in an estate plan package of documents. You’ll get a “pour-over will” that works in coordination with the trust, powers-of-attorney and the health care directive. This last document is also called the “living” will that provides end-of-life instructions to family and doctors in the event you’re on life support. These documents are designed to function in different circumstances and at different times to help control your assets.

Time for Some GOOD NEWS



It feels to me that we're all in need of some good news.

I have some great news for the young (ish) and the old (ish), but before I get there, I'd like to encourage EVERY person who is reading this:

Keep your head in the game.

Yes -- we can so easily get caught up in seemingly nefarious schemes on every side. Whether you are Team ReOpen or Team StayLockedDown ... there are data points and new stories plentifully available to bolster your case.

But what are you doing about what YOU can control?

That's the game right now.

Many people receive these emails that I send out. But of all of them, in point of fact, there might be only a small handful that have actual power to enact change by influencing minds or implementing action.

So, what are all the rest of us doing?

Trusts and Real Estate, Part 2 of 4: The Real Estate Trust



This article continues our discussion of trusts, specifically the real estate trust. First, only a couple of states, like Florida and Illinois, have true “land” trusts. I won’t get into the legal details on how they are different, as that gets complicated. Just know that unless you live in these states you are NOT using a land trust. This gets confusing as many investors attend educational events where these trusts are taught or sold without distinguishing them.

The rest of us have something a little different. We call these trusts real estate trusts, asset holding trusts, property trusts or the like. They are really just simple living trusts but should be created by a knowledgeable attorney. They are designed to hold title for privacy purposes and facilitate transactions such as wholesaling or even selling real estate.

Trusts are a kind of legal entity (like LLC) that can own things. They can be a named buyer on a purchase contract and be named on county land records. Because trusts are not registered with the state, no one will know who owns them. That’s where the privacy comes in. They do, however, have a trustee (think, manager) who will be named on county land records. So be aware of that.

PPP Forgiveness and Your Taxes



Well, if you were wise, you probably saw this coming.

Turns out ... if you received a PPP loan, that the expenses you pay from the proceeds of this (forgivable) loan ... are not deductible for businesses.


The IRS just released new guidance to this end (which is being protested by CPA associations). This reduces the value of this "loan", depending on your tax rate.

And it's a good lesson for all of us: Congress can do whatever it likes. And it doesn't need to tell you in a timely fashion. It can come in at the 11th hour and change everything.

Welcome to my world.

That said, your tax pro can do certain things on your company's taxes (with your cooperation) to reduce the impact of this new IRS guidance.

Trusts and Real Estate, Part 1 of 4: The 3 Trusts Used in Real Estate



All investors will certainly hear about the use of trusts in their real estate business. Most investors may encounter these trusts in some way. A few will use them regularly. The fact is, there are a number of different kinds of trust used both in real estate and our personal lives. This set of 4 articles will highlight the types of trusts most commonly encountered by real estate investors. Here we generally cover the 3 trusts used in REI, and then we’ll follow up with an article on each one.

The first one is most commonly called a “land” trust. This is not super accurate! Only a few states actually have true land trusts as they are very specific types of trusts authorized by the state. For the rest of us, we use property trusts, real estate trusts, holding trusts or the like. These are simple revocable (changeable) trusts designed to simply own real estate—either by contract or title. These trusts are used for privacy purposes and to facilitate many REI transactions.

The second trust is the standard family living trust. This is a much larger and complicated trust as it’s designed to define, control and allocate your assets after you pass away. You can think of this trust as a traffic copy, directing things when you can’t. You should work with an asset protection attorney to create your family trust because this should be part of your overall asset protection plan and work with your other protection vehicles, like LLCs.

Scammers are Everywhere Right Now



Anytime (like now) that there is a rollout of government assistance, you can count on two things:

1)    Bumps in the road (it's hard to manage many millions of people needing help)

2)    SCAMS

I haven't yet heard of any of my clients or friends being taken in by this stuff, but I did want to alert you to this dynamic.

How to make sure your check is the right check.

Most of the Economic Impact Payments (i.e. stimulus checks) have been direct deposited by now. So if you have NOT received it, you might want to check the status using the tool the IRS has set up here:

Some who did not set up direct deposit, or for other reasons, might receive a check instead. That said, a couple things to note:

Beware! Traps & Snares Ahead...



So, you got that stimulus check (or, as the government wants to call it, your "Economic Stimulus Payment")...

What next?

Please use these funds wisely.

If I could sum up my advice for next steps, it would be this: act like you did NOT receive this payment.

And, yes ... some of you have not yet received it.

If that's the case for you, the IRS has set up a tool where you can check your status:

And there are plenty of other links on that page to help ensure that the IRS has all the info they need so that you do get it.

Now ... if you did get this check (and even if you didn't), may I offer you some advice?

The 5-Primary Ways Your Business Can Get Help Right Now



I'd like to simplify things for you today.

There is so. much. noise. right now about how to survive (even thrive) in the midst of this very difficult season.

"Pivot" they say.

And yes, if you are running a business, these times call for a bit of a shift. Only a very small amount of businesses haven't been affected in some serious way by this ongoing crisis, and if you need somebody else to tell you to pivot at this point, chances are good that you are already in trouble.

I've already been writing to my clients a great deal about this dynamic, and I hope you have been finding these messages helpful. We will continue to be out in front on these matters, simply because things are constantly changing, and we are uncovering new information and new benefits (and how to receive them).

It's all getting very complicated.

That's why I hope you see why I'm working so hard to be in communication with you right now.