In this video, we'll be discussing the best options for protecting your crypto wealth. Join us to discuss the differences between LLC and trust structures and which one may be best for you. Don't leave yourself and your digital assets vulnerable - watch and learn the best ways to safeguard your wealth!
#cryptoinvestor #digitalassets #cryptowealth #cryptotax
Find more from Jake Claver by visiting the links below:
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Digital Ascension Group - https://www.digitalfamilyoffice.io
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#cryptoinvestor #digitalassets #cryptowealth #cryptotax
Find more from Jake Claver by visiting the links below:
🖥Websites🖥
Digital Ascension Group - https://www.digitalfamilyoffice.io
Beyond Broke Mastermind - https://mastermind.beyondbroke.com
Social media
Twitter - / beyond_broke
Linkedin - / jacobclaver
TikTok - / jakeclaverqfop
Facebook - / jakeclaverqfop
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LifestyleTranscript
00:00Hey, welcome back to the second video in the series on being proactive with your digital assets,
00:06looking to get them into an LLC or trust prior to price appreciation, and working through the
00:11different constraints that you might have in your life that would allow you to evaluate that and
00:16decide what's going to be best for you and your family for the long term. So today we're going to
00:22get into the constraints I have listed here, and you know if they apply to you that's great. I just
00:28want to say as always, nothing here is financial advice. Always consult with a financial advisor
00:32before making any investment decisions. Everything here is for entertainment and educational purposes
00:37only. So let's go ahead and get into it. So this couple, again I have the privilege of you know
00:45meeting with a lot of people that are looking to be proactive, talking them through these different
00:49constraints, and helping them evaluate you know the different possibilities that they have. So this
00:56couple, they're 45 years old, you know we're pretty close to it, they have a combined total income
01:01of $150,000 between the two of them. They're located in Georgia, we're another state that has
01:08moderate state tax, not New York or California, and they also don't have no estate or no state taxes
01:15like maybe Texas or Florida. This is somewhere between you know two percent and five percent
01:21state tax or state income tax that they're going to pay. They are married, so they're going to be
01:28filing jointly or with head of household on their tax returns. They have three children that are
01:34dependents, and we'll say that they are you know a variety of ages all the way from four to 15. Okay
01:44um they are homeowners, but they do have a mortgage, and we're going to say that they got this at the
01:51bottom of the market. They've got you know uh three percent on a fixed rate mortgage uh over 30 years.
02:00Um their objectives when uh their their digital asset investments go to the moon are um they want to
02:06start a business, they want to create passive income, and they want to do some charitable work
02:09through a foundation. So I'm going to run down um all of the different options that this couple
02:15might entertain, and then walk you through why or why not they might choose some of those options.
02:22So oh the other piece here, they do have $150,000 invested in digital assets, and half of that $75,000
02:30is in an IRA or an individual retirement account um that they can't draw on or really leverage until
02:38they're 59 and a half. Again as always we're going to be cognizant of the gift tax threshold. We think
02:44these assets are going to appreciate substantially, and so again that's that's kind of why we're even
02:49having these conversations. If you didn't think that then you probably wouldn't be so worried you
02:53would just pay your taxes. Uh but if you are concerned about that then obviously you want to um
02:59get those assets into vehicles that would allow you to at least increase the amount that you're able
03:05to write off against your income or protect those assets in some other manner. So we're going to
03:10have we're going to walk through the three different things that they could do here. Um because they
03:14have philanthropic interest we're going to include a foundation uh or charitable remainder trust in um
03:20how we're going to walk through this uh outside of just the scope of what we would normally discuss
03:26which would be an LLC or potentially an asset protection trust. So we'll go ahead and go walk
03:31through the LLC. Uh if they do that they've got 75,000 that they could move into that
03:36you know um if they are going to take profit that might be a good idea. Again you know because they're
03:43in Georgia and they do have state tax if they filed that LLC uh in Wyoming um they would be subject to
03:50the state taxes in Wyoming which there aren't any. Uh if they do wanted to protect the anonymity and
03:56um get the assets out of their personal name an LLC would make a lot of sense. And again if they're
04:02going to take profit be able to offset some of that income by purchasing vehicles or deploying that
04:07capital into starting a business or other investments that could create the passive income
04:12that they're looking for. So great option there. Uh again you know an LLC is going to cost you
04:17somewhere between three and eight hundred dollars to get set up. Um now let's let's get into the trust
04:23side of things. Would would a trust make sense in this situation? Why or why not? Well if you get
04:2912.92 million per person that you can move into a trust with no tax implications. Let's say that they
04:35got uh 100x on their digital assets and their investments. Well in a combined total they're going
04:43to be looking at 15 million. So between the two of them they get 25.84 million that they could move
04:48into a trust with no tax applications. Well beneath that threshold no problems. And and again half of
04:54that's in an IRA. So 7.5 million in their personal names. Um they move it in there no problems. So
05:04trust probably doesn't make sense in this scenario to spend the you know three to twenty five thousand
05:10dollars that money could be invested in the digital assets and appreciate substantially and the offset that
05:16they're going to get on the taxes for setting up the trust now. Hmm there might be benefits there you
05:23know if they thought that they were going to pass away very quickly. Maybe maybe one of these
05:26individuals is ill. Um I could see a circumstance where that makes sense or uh let's say one of the
05:32this is another scenario that I have seen a few times. One of the children or a few of the children do
05:37have um mental issues or something where they're on SSI and if those children get a certain amount of
05:44income they they lose their benefits from the state and so we do work with individuals in in that
05:49situation to make sure that things are structured in a way that those children can maintain their
05:53benefits but also get the benefits of a trust. Uh and so those are just some circumstances in which
05:58that might make sense but in the broad with a broad brush stroke if those things don't exist
06:04an LLC could definitely make sense in this situation but again we're going to touch on the fact that
06:09they want to start a foundation and have some charitable interest. So let's say we do see
06:14significant price appreciation. They do take profits. They want to set up the foundation. Um
06:19if you are going to take a good amount of profit and you do want to offset those tax implications
06:23a charitable remainder trust might make a lot of sense in this situation. You could form a foundation
06:28then set up the charitable remainder trust make a donation to the charitable remainder trust. You get
06:33a lot of tax benefits there but again that only makes sense if you're going to be donating
06:37in cash. Okay there's a certain there's stipulations on how um the cash has to be invested inside a
06:46charitable remainder trust in order to meet the qualifications and get those tax benefits
06:50and if you're going to be wanting to keep the assets in kind to be able to leverage those
06:54to produce income for yourselves maybe not so much on the making sense size there. So but you can set up
07:02the foundation um or charity and there's two different types of of charities or foundations
07:08there's there's a reason there's a differentiation in the name. Um so charity is going to be a public
07:14entity uh and a foundation is a private entity. Uh if you make donations to a charity you can donate up to
07:2260 percent of your annual gross income um in cash and then up to 30 percent in kind or in assets
07:33and you can offset your your tax implications there. So let's say they saw the 7.5 million um
07:39you go crazy liquidity event awesome for them uh and they're they want to cash out a third of that and
07:46then they're also going to donate a third of that in kind to the charity or the foundation that they set up
07:52well I guess it would so sorry I didn't tell you the other part. So say they set up a foundation
07:56you can donate up to 30 percent in cash of your adjusted gross income to the foundation or the
08:03private entity uh that has philanthropic interest or 20 percent of your just gross gross income um
08:10in kind. So if they're going to set up a charity they can donate more if it's a foundation can donate
08:16less. Um so let's let's revise that a little bit let's say they want to set up a foundation they're
08:21going to take 20 percent off the table so they're going to sell what does that end up being if it
08:24was 8 million uh it would be you know 1.6 that they'd be selling so a little bit less than that
08:31we'll say 1.3 is about 20 percent ish of 7.5 um and so let's say they're going to make that same amount
08:39and they're going to donate that amount in kind to a foundation that they set up and so now they've
08:45offset their taxable income for the year they're and and they have money or assets in the foundation
08:51that they can um you know continue to leverage and produce income and do really good things with
08:56and they can put their kids on the board and pay them a salary and you know all the other things that
09:01the wealthy families do not knocking it uh I think it's a great way to um you know protect your assets
09:07and do a lot of good in the world so um that's just some of the other ways that you might think
09:12through this so in this circumstance they might not need to do anything previous to price appreciation
09:18if that's all they thought they were going to get if they think they're going to get a thousand x on
09:22something something crazy um yeah probably need to at least get it in an llc uh and then can make
09:28a donation from there but if if this is their main point of interest the the philanthropic focus
09:35which a lot of people I meet with it is um they don't need a whole lot themselves they want to
09:40live a comfortable life and take care of themselves and their family but they really want to give back
09:44to their community or a certain cause and they feel really compelled to do that you might not even need
09:49to set anything up here in the short term you might just wait until price appreciation happens
09:54set you up a foundation uh cash out some to your personal name be able to use that to pay off your home
10:00and and so let's talk about that their mortgage here um I've talked about this before
10:05but some people want to pay down debts they their quality of life is lessened by this debt that's
10:16hanging over their head regardless of the interest rate okay three percent is killer it's like getting
10:20free money uh so for me personally I would just pay the minimum on that puppy for forever uh but for
10:29some people they don't like that looming debt and they want to pay that off and so that's what I would
10:34say in that circumstance if you're just a numbers person and it makes sense for you to just continue
10:40to make the minimum payment on the fixed 30 year at three percent cool you can put that money to work
10:45that you would have paid that you would have made three percent on by paying off your mortgage
10:49to work somewhere else right you can put it in a savings account right now and earn five percent on
10:52it okay um so in the numbers context it does not make sense to use the the appreciation and the
11:01profits that you make on your digital asset investments to pay off a three percent mortgage
11:04doesn't make sense but again if that stress hinders your quality of life it completely makes sense
11:11so it's person dependent so we're going to say you know these individuals they they want to get rid
11:16of that debt they're old school they don't like having debt and they want to pay off their home
11:20and know that they're secured uh even though they're still going to pay taxes and insurance
11:23the other stuff on it um and that's going to pull out of escrow anyway um they want to pay that off
11:31so when they cash out that 1.3 some of that's going to go toward their mortgage um they want to put
11:37their kid through school uh they want to put into college fund to make sure their kids are set up
11:42they want to do some other stuff like that and they want to start that business right and so then
11:45they can move the money into the business at that point take the deductions there da da da um so
11:51really you know if i'm having this conversation with them and we've been through their constraints
11:57um it might make sense for this couple to just go ahead and wait for price appreciation
12:02because they do have the philanthropic interest and they because they do have the philanthropic
12:07interest and they do want to donate a portion to a private foundation or a charity that they want to
12:12set up post liquidity event um and that's their primary focus that's probably the direction that they
12:20would go so just continue to dollar cost average don't really need to you know spend a bunch of
12:25money now on an llc or a trust and set things up because you can do it post liquidity event
12:30and be able to offset your taxable income pay down your debts and live a happy life so
12:36hopefully this was valuable for you again not everybody needs to do these things pre liquidity
12:41event depending on what your long-term goals are uh and hopefully you know this has been
12:46valuable in that context if you do have philanthropic or charitable interests uh it might not be necessary
12:52for you to go ahead and set things up now so um if you haven't yet please like subscribe let me know
12:59what you think in the comments below and we'll see you on the next one in the series
13:03we'll see you on the next one
13:25you