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:
🖥Websites🖥
Digital Ascension Group - https://www.digitalfamilyoffice.io
Beyond Broke Mastermind - https://mastermind.beyondbroke.com
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Twitter - / beyond_broke
Linkedin - / jacobclaver
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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
00:00Welcome back to the series. This is going to be the third and final video discussing the
00:04different considerations that you might have when you're deciding what to do in the short term here
00:10to mitigate potential tax implications and set yourself up for long-term success
00:15if you do have a decent holding in digital assets. So again, you know, these are some of
00:21the considerations I've written here. This is just a general scenario. Nothing here is financial
00:25advice. It's all for entertainment and educational purposes only. Always consult with your financial
00:30advisor, estate planner, CBA before making any final decisions. So we'll get into it. This individual
00:37is 32 years old. They have a very high income. They live in New York or California. You know,
00:44$300,000 a year. They are single. No family, no kids. They set themselves up pretty good.
00:52They rent an apartment in New York or California. They do not own their home like some of the other
00:59people that we've talked about before this. And their objective is to establish and set themselves
01:05up so that they can make sure that they are in a position once they do get married to set their
01:11family up for generational wealth and creating a legacy. Their current investment in digital assets
01:17is $150,000. And so, you know, longer time horizon than somebody else that's a bit older in age like the two
01:25previous videos. You know, if you're 45 or if you're 65, if you've got a protracted time horizon, this person
01:32doesn't necessarily need the income today, right? They can hold these digital assets for an extended period of
01:37time, wait for the appreciation to happen. So their immediacy of action to set things up
01:44probably isn't as great as somebody that might be, you know, looking to leverage the assets to reduce
01:50income faster or, you know, might be looking to retire sooner. This person's a bit younger. So
01:57high income, the consideration here that may play into why they would want to establish an LLC or a trust
02:05now are two things. So again, they've got $150,000. This is all outside. It's all non-qualified assets.
02:14It's not an IRA or a 401k or another investment vehicle. This is in their personal possession
02:20that they've made these investments. And then the location where they live. So California and New York,
02:26New York in particular, inhibits your ability to purchase a lot of different digital assets. It's
02:31the most stringent financial jurisdiction here in the U.S. Those two states have the highest state taxes
02:35here in the U.S. So with that consideration, this person may want to set up an LLC. If they're going to
02:43continue purchasing, they believe that the assets, let's say they did 100x from where they're at,
02:48they're going to be looking at 15 million. That is above the gift tax threshold here in the U.S.
02:53of 12.92 million. You're probably going to want to keep a portion of the digital assets that you have
02:58in your personal name in an LLC, you know, moving into an LLC outside of a trust just because, and I think
03:06I mentioned this in another video, when you set things up, paying taxes on the income earned by the trust
03:13is cheaper to do at a corporate level. So it's often nice to have some type of management LLC or
03:19corporation that is paying the taxes on behalf of the trust to allow the assets that are invested in
03:25the trust to continue to appreciate and be traded with no tax implications. They compound much faster
03:31in that vehicle if it's done that way. So, you know, if this person just left it as is, let's say
03:37they did get 100x on their investments, you got 15 million, maybe they do move the 12.92 million
03:43into the trust. They keep, uh, what would that be? 3.2.1 million left there in the LLC. They can put
03:53that to work in some capacity in order to generate income. Same thing with the assets in the trust,
03:57and maybe they use all of the income in the LLC to pay the taxes on behalf of the trust and allow
04:02the assets there to continue to compound at a significant, faster rate. Um, anyway, so let's
04:08pull it back. Uh, why would they set up an LLC in Wyoming or trust in Wyoming? Uh, what benefits
04:15would that have? Well, for this individual, they're not married yet. So setting up a trust now can be
04:19very, um, advantageous to make sure that they're not going to be commingling those assets with whoever
04:25they do marry later on. Um, you know, obviously you want to have a good prenup lawyer. That's
04:31something that we can help you with the digital extension group when the time comes for you. Uh,
04:35if that is a necessity, we have great connections there. Uh, but if you are going to be able to,
04:40you know, get your things into a trust previous to the marriage or even entering to that relationship,
04:44you, you're really mitigating any of those risks for other people's ability to,
04:49you know, maybe come into the relationship with poor intentions. Um, you know, things happen.
04:55I'm not saying people have poor intentions. I'm just saying that there are gold diggers out there,
05:00men and women, not just on the female side. Um, this obviously I didn't designate sex here.
05:06This could be a male or female, uh, that's making this income at this age with these investments.
05:11And, um, you just want to protect yourself. And that's really what it is. You know,
05:15you just want to mitigate risk and set yourself up for success. Um, so with the amount of income
05:20that this person has, um, their investments in digital assets and their situation, they have a
05:25lot of different options. Um, if they did have the income and the means setting up a trust now
05:32is likely a really good option for them. Again, you know, price point on that's going to be somewhere
05:37between $3,000 and $25,000, depending on where they set the trust up and all of the bells and
05:42whistles associated with it. We often see people here in the U S setting things up as a Wyoming
05:48digital asset protection trust. We have capability to help you with that. If that's something you're
05:53interested in. Um, but you know, and the LLC, why would they want to do that? Well, that would
05:58mitigate, uh, the potential date taxes that could be involved and would allow them the capability to
06:04have much more ease in purchasing the assets, um, through an account established in the LLC's name
06:10versus, you know, especially if they live there in New York. Um, you're probably, again,
06:15going to have to have a VPN that broadcasts to Colorado or Wyoming or wherever, um, a closer
06:21spot to where you filed the LLC. Um, but in doing so, you know, you would be in uninhibited in your
06:28capability to purchase other assets or, or create exchange accounts that you might not have the
06:34capability to do there in New York. So just some of the considerations for this individual, um,
06:41that they really have a wide variety of options because of the level of their income and their
06:46position, uh, versus some of the other people we discussed before, you know, they don't have kids
06:51yet. They don't have a wife yet. They don't have a mortgage yet. They may not have a ton of other
06:55debts. Um, they're just earlier on in their life and their journey. And again, um, they can have a
07:00higher risk profile, um, or their risk profile would be leaning more toward high risk versus, uh,
07:09somebody that might be closer to retirement, wanting to make sure that they have wealth
07:12preservation versus, versus wealth creation. So they can take more risk with their investments,
07:17um, and set themselves up for the longterm. And if they lose it, then they have a lot of time to make
07:24it up, uh, because they do have a high income. This individual would also be considered accredited
07:28here in the U S. If they had had that income for two years, they would have the capability to get
07:32access to, uh, private equity and those types of investments. Um, they obviously, and they may have
07:39other accounts, you know, we didn't discuss that here. They might have, um, you know, 401k or other
07:44investment accounts in other places. They might own real estate outside of where they rent. Uh,
07:48they could have other assets that qualified them as accredited if that amount was beyond a million
07:52dollars. Uh, cause obviously, you know, they don't have equity in a home because they rent. So
07:57anyway, if this is you, if this meets some of the criteria, uh, again, would love to work with you,
08:05help you establish an estate, be proactive with your digital assets here in the short term.
08:09Um, you have a lot of options in comparison to some of the other people.
08:14Uh, you could even just live this, leave this in your personal name. Um, again, the only
08:19consideration there is going to be, um, the ability to take profits when it comes time. You're not going
08:25to be able to reduce those tax implications. Uh, this person might've held these digital assets
08:29longer than a year. If they have, there are long-term capital gains. If they purchased them in the last 12
08:34months, it'll be short-term capital gains, uh, when they do liquidate those positions.
08:38So you just got to be cognizant of those, um, you know, those decisions. And again,
08:43because they already have such a high income, uh, and they are located in those states,
08:46it's probably really, uh, in their best interest to go ahead and establish at least an LLC
08:52outside of those jurisdictions so that they can use the income that they are going to cash out if
08:56they are going to take profits. Uh, again, longer time, time horizon, they may not even take profits
09:01this cycle. We'll see. Uh, but if they did choose to do so, that's going to put them in a really high
09:06tax bracket because of their income already. Um, unless it was long-term capital gains, and it's
09:12going to be, you know, if you're over 550, uh, you're going to be looking at 20% of those. But again,
09:18uh, if some people, it's up to them, they may just want to pay that and go on about their business,
09:23not worry about it. If you are concerned with mitigating tax implications and making sure those
09:27assets are protected and the income that you receive, uh, is going to be, you know, fostering
09:32this generational wealth like this individual, uh, an LLC here in the short term would be kind of the
09:37minimum criteria. And because of their income and their situation, I think a trust would probably be
09:42in their best interest. So went through a lot. I know it's like drinking through a fire hose
09:48on some of these. Uh, if you need to watch it again, please go back and do so. If you have any
09:53questions, comment below. Let me know if these are helpful for you guys. We're happy to run more
09:57situations and create other series like this. Uh, if you do want to schedule a consult with us,
10:01you can do that right here. Uh, and if you want to check out other videos in the series,
10:05that's going to be right here. Uh, and with that, let it go. If you haven't yet,
10:10please like subscribe and we'll see you on the next one.