The Living Trust is a set of instructions you create to list what assets you own, to advise who gets your assets when you die, and to advise how and when your assets should be distributed.

The Living Trust is a revocable grantor trust, which means it can be changed at anytime and the assets within the trust belong to the grantor. So if you put $10,000.00 into a bank account in the name of the trust you personally can withdraw money from the account. If you are sued personally the $10,000.00 you placed in the bank account belongs to you and can be used to settle a personal lawsuit. Yes, it is very true; your stuff can be taken from the Living Trust!

The Living Trust only avoids probate court; it does not avoid estate taxes. The trust is responsible for paying the correct amount of estate taxes owed.

There are three key players involved in a Living Trust: the Grantor is the person creating the trust to hold assets; the Trustee is in charge of distributing assets specific to the Grantor’s wishes and pay any estate taxes; and the Beneficiaries are the ones that get the goods.

The Living Trust should contain an appointment of guardian for minor children. We all have that relative whom we hope will never be a role model for our kids, so it’s important that we spell that out ahead of time. The Living Trust should contain a list of all the assets you own, including bank accounts, retirement accounts, insurance policies, heirlooms, vehicles, etc. The Living Trust should advise the Trustee who gets what, for example, your daughter gets your jewelry, your son gets the cars, etc. The Trustee should also be instructed as to when the assets should be given, for example, the kids should be age 25 and graduated from high school.

A good trust will also include a Medical Derivative. This informs medical professionals how you wish for them to treat you in life threatening conditions because loved ones are too emotionally involved in the moment to be able to follow your wishes. For a clear example of how this does happen in real life, research the Terry Schiavo case.

It is important for you to understand that the Living Trust is you, the assets are yours, the estate taxes are owed on the assets, and the assets can be taken in a legal action.

We do not believe that the Living Trust should be used as a land fill for all your stuff, as some legal persons may advise you to do. The Living Trust is a clear roadmap for the distribution of your estate and for your final wishes, so NexStep Innovations does encourage everyone to implement a Living Trust. And if you already have a Living Trust, NexStep Innovations encourages you to re-examine how you’re using it and to find out if you could be using it better.

If you wish to discuss your personal need for a Living Trust please feel free to contact us for a consultation.

We are sure everyone has heard about those little things called Wills. Wills have been around for years. You’re also all aware that smart legal people have been building people’s faith that Wills keep family heirlooms in the family. And of course everyone understands how gracious and kind-hearted those smart legal people are to make Wills affordable for everyone. We all buy into this right? WRONG, only those who have NOT been punched in the kisser by Probate Court still buy into this grand deception that Wills are the best tool to pass your assets on to your heirs.

We at NexStep Innovations have heard the stories of probate court told so many times; they are all devastatingly sad, riddled with family assets being liquidated to cover estate taxes, loved ones coming to blows over who got what or suing each other over dollars, families financially ruined due to the cost of having a smart legal person represent them in probate court.

The Secret Truth: A Will is a bunch of useless papers. It doesn’t prevent the estate’s assets from being frozen for months or years. It doesn’t provide clear direction for the distribution of assets. A Will can be contested by beneficiaries. A Will doesn’t give medical people directions in emergencies when loved ones are emotionally unable to make clear medical decisions. A Will doesn’t provide for additional beneficiaries. A Will doesn’t provide a roof, clothing or food for minor children. It doesn’t protect from divorces or future divorces, and estate assets are not protected from legal actions.

Wills are cheap for a reason; smart legal people make more money representing your beneficiaries in probate court than implementing strong legacy planning. So it may cost you $99.00 to have a legal person draft a Will; however, it can cost Thousands for that same legal person to represent your beneficiaries in court.

Many people out there don’t know what probate court is, so we want to briefly explain. Probate Court determines the total value of your assets after you are no long living. The Court will then determine the total amount of estate taxes the estate will pay and bill the estate for the service of determining the total value of your assets. The Court will then liquidate whatever assets are needed to cover the owed taxes, court fees and your family’s smart legal person’s fees.

NexStep Innovations LLC believes that the fundamental intentions of a Will are good; however, the implementation, protection and misrepresentation by the legal person of the Will are bad. In truth we do not promote one specific vehicle for everyone when it comes to building and protecting your assets. We believe in creating customized strategies that are specific to you, your beneficiaries and your assets.

If you wish to discover the best ways to protect you, please contact us.

Individuals often tell us that they have been told by their legal or tax advisor that they are too small to incorporate. After talking with these individuals further we discover that the answer of  “You’re too small”  is really just a way for the advisor to discourage further conversation and discussion because the advisor has no education, experience, knowledge and/or clear understanding of incorporating.

A lot of Business owners, for some reason, believe that every legal and tax advisor has knowledge of every single area of law and taxes. Which is simply incorrect; it’s kind of like saying that a chiropractor could prescribe you medication for a bacterial infection. He’s a doctor, right? All legal and tax advisors specialize in specific areas of practice, so not every legal advisor will be able to give qualified advise about incorporating, as it is a specific area of law. The majority of tax advisors specialize in personal 1040 tax preparation; that does not qualify them to advise you on corporate or LLC taxes.

One of the main reasons why an advisor might say to you “You’re too small” is because stating the truth is like saying, “I will lose the money I am making off your business because I am not qualified or capable to handle your business, if you choose to incorporate.” By stating the truth your advisor would be making your business a priority over their business’s financial benefit and they are not going to do that. Professional advisors do not like admitting lack of experience or knowledge, so they will say what they need to in order to keep your business and feel superior. In addition, most legal advisors do not grasp the tax benefits of incorporating and most tax advisors do not grasp the liability benefits of incorporating. Neither cares about the benefits of the other side, because it isn’t their area of specialization, but you should care as both taxes and liabilities affect you and your business.

The choice to incorporate is yours; the choice is not your legal advisor’s or tax advisors. You should know that there is no such thing as a specific dollar amount in your bank account that triggers the need to incorporate. There isn’t a specific amount of liability that requires you to be incorporated and there is no such thing as too small to incorporate. You should also know that there are benefits to incorporating that you may not receive due to the industry your business operates in. You should be advised to the upkeep needed to ensure the integrity of the incorporated entity. You should understand the risks involved if the incorporated entity is mismanaged. You have the right to be able to make an informed decision. You may just have to replace your current tax and/or legal advisor, and it is ok to do so.

At NexStep Innovations, LLC we don’t believe in providing curious business owners information about incorporating that is self-serving. We don’t believe in bulling business owners to do business with us. We don’t offer “have-to-do-it-now” specials or “first-time caller” discounts. You’ll never have to file a restraining order against us because we don’t specialize in stalking. We do specialize in incorporating, so if you would like to speak with someone, call us today to schedule your consultation.

Question: Can I put my personal residence into my corporation or LLC?

Answer: Sure, there isn’t anything that says you can’t put your personal residence into a corporation or LLC.

But, there are a few things you should know before you do that. The first thing is we wouldn’t ever recommend you putting your personal residence into a corporation or LLC since we believe putting your personal house into your corporation or LLC is a very bad idea.

One of the main goals of setting up a corporation or LLC for your business is to separate your personal assets from the assets and liabilities of the business. When you put your personal residence your combining your personal and business assets which means if the business losses a lawsuit, then they could take your personal residence to settle the judgment. The possibility of your business being sued is great, so the possibility of losing your home is great. Not our idea of protection.

Another potential problem with putting your personal house into your business entity is that you can create some very real tax problems for your business. The entity would be required to pay taxes on the sale of the home; you get the luxury of paying long-term or short-term capital gains taxes on the sale of the home; then as the equity in the home increases, it must be claimed as profit on the tax return of the entity and the entity must pay taxes on the profit. Doesn’t sound like protection, it sounds like a great way to pay taxes, more taxes and even more taxes; but hay if you like paying taxes go for it.

Lastly, if there are mortgages on the property, since the incorporated entity is not you, the mortgage company or companies can ask you to pay the loan they gave to you in full immediately.

You do have options for protecting your personal residence as well as any business properties or investments properties. You can contact NexStep Innovations LLC and we can discuss options to protect your home or investment properties.

Question: Can a Corporation or LLC have a D.B.A?

ANSWER: Yes, an LLC can file to obtain a D.B.A or Fictitious name. You can complete a D.B.A application in the County where the LLC is transacting business, but be cautious when completing all documents to ensure that the D.B.A. gets structured under the LLC. By filing the D.B.A. under the LLC, the D.B.A. gains liability protection from the LLC.

Watch your eggs! Huh? That’s a really crazy FYI; however, let’s take a look at the following: John Doe decides he is going to purchase rental properties and open a restaurant. John opens an LLC to handle both ventures, under two different DBAs. One of his rental properties has a lawsuit; by holding both ventures in the LLC, the restaurant venture will also be liable for those legal actions. When you place all your business venture eggs into one basket, you’re putting the whole basket’s assets at risk.