Investing and Incorporating into a Trust: A Guide for Ages 30-50

Transcript

thank you so much for joining me today we actually have a really awesome podcast today with one of our good friends and colleagues Manny Blanco who you'll hear from in just a second but today we're talking about investing and incorporating your finances into a trust but really a guide for the ages of like 30 to 50. now I know we said 30 to 50 but I don't know maybe Manny will say this actually is applicable to everybody but most of our viewers are about that age and so usually we're talking about these topics because I think more needs to be said about why we care about this but also what are the benefits to doing all this today we're just going to be covering that as a topic so I want to welcome everyone to our special episode and you know who I am I'm Stephanie Garces Donat I'm an estate planning real estate attorney in Palatine and I'm joined here by Manny Blanco a financial advisor with West Point Financial Group so Manny is a wealth management advisor and has been helping individuals and families build wealth with strategies that adjust basically on the market right that is part of your job so I'm really excited to welcome you so thanks so much if you want to just give us a quick update that's to who you are and introduce yourself to the viewers thanks so much so I’m Manuel Blanco with West Point Financial which is a Mass Mutual company been in the industry now in April is 20 years but I go a little bit further I don't want to count my intern years when I was working for another company but yeah so I've seen the market with a good 20 23 years of what it's done well thanks for joining us today and so I'm hoping you can share some of your powerful strategies as to what you would do especially with the market and the times that we're in there's a lot of changes happening a lot of people are wondering is it the right thing to invest how do I protect my money so we're going to talk a little bit about kind of explaining what a trust is why it's important to also have Wealth Management in your back pocket just for the viewers that are always looking to see what exactly is a trust I always call it like a basket people call it like a car it's essentially it's a legal arrangement for a person who's a trustee holds and manages assets to benefit others whether it's the beneficiaries or the people you have names it allows you to train transfer your assets while you're living or upon your passing with some specific instructions as to how to manage and distribute them and so that can actually be very powerful and there's so much that can be done with trust we're talking openly what a general trust is so many what are your thoughts about trust as a general topic do you see this come up how does someone who's like between the ages of 30 and 50 kind of benefit from incorporating their assets in a trust at least from your perspective so the biggest thing that I see and especially coming out of covert right and we experienced that for the first time like on a daily basis where it comes to a probate we talk about wills and trust and as people tend to start Building Wealth in their 30s into their 50s they have more things to protect right so we always look at trust as one thing is that you want control of how people get the assets that you built and how you pass them on to the next Generation right and then also do you want to protect it from predators which is one of the biggest reasons to people like to open up Trust And for those of you that are wondering what exactly is creditors we always think about like as attorneys people that are trying to get money from you Google that are owed money so that could be credit card companies it could really be any anybody that just says hey this person owes me and they've passed now but I still want to collect so that's a creditor let me ask you this man I know you mentioned facilitating assets through a trust but for those of our viewers that are new to investing what do you tell people about effectively managing and preserving their wealth and keep in mind that some of our viewers and actually current and past clients of mine will say oh we only make x amount a year we don't really qualify for these things and you know how this goes and so my thought is you're never too early to start I actually disagree when people say that because I think everybody has a legacy whether you like it or now we all have a legacy to protect and so what do you say to those that are questioning is this a good fit for me well when we look at Estate Planning and Trust planning really we look at it in two different lenses one is a for the purposes of taxes right so we're talking about people who are worth multi millions of dollars so they want to be able to reduce as much money as they take it to Uncle Sam and the other you brought it up is Legacy planning well planning we jokingly say you control the acids from the grave and how it gets distributed to the people that you want because the joke is that the first generation builds the wealth the third generation loses it all right so what happens yeah and so that's how we look at if they plan is like yeah as you're building your wealth and you're creating things and there's life changes you want to be protected you know you talk about the creditors we didn't talk about like the divorce too yeah of course the way we can Warehouse these things just to basically plan to what might or might not happen in the future but we're still in control absolutely and one of the things too by the way I always help the viewers is trusts are so important and so so different they have so much value so a lot of times people will say I need a simple will simple will is what I like to say okay a simple will doesn't afford any privacy and so I know trusts are huge and that people that are trying to be private or maybe they're worried about somebody kind of accessing the documents that they have so if you have a big estate or a small estate you just don't want people to see who's kidding what a trust is a great way to do that because if you pass away the trust has always been and so remains private which is different than like a will a will typically becomes public record after you pass because you have to file it and so that's the difference there but but those are pretty some compelling benefits that we'd like to talk about so Minnie how do people optimize their investment strategies with you or how do people like optimize what they're trying to do because I think a lot of people have their money either in a savings account collecting the interest and not really doing anything or there's people that have it it's a local bank but they don't really know how it's invested it actually happens quite a bit so how do those folks optimize their wealth especially as a young person or as a person who's nearing retirement there's a lot of things that we talk about sometimes goes into like rules of thumbs right so someone who's 65 years old you minus your age and that's what the portfolio and how aggressive or conservative you should be so just because you're 25 years old and you got 40 years to invest so your means you're going to be aggressive they might not be in you because of the emotion of the roller coaster the Market's going up and down right so we look at the risk we look at time Horizon and most importantly what that goal is right because it's easy to talk about oh my God these Investments are making 100 rate of return and get caught up in that but when it drops 80 percent you're like what did I just do yeah right so a lot of it too as the course of time goes we look at how do we rebalance a portfolios based on how those goals change right because you might be single today not married with no kids all of a sudden now you're made with kids and those are different the risk is different that you want to take yeah definitely so what do you say to individuals that are looking to up the answer in their Investments I think some people like you said it starts to changing whether like kids are getting older or they're getting closer to college or perhaps they're no longer infants anymore and they're at a point where like they could maybe do such a savings or is there anything you help with like Risk tolerance for personifications or different ideas that you give different couples so what do you offer different couples at different stages kind of like General recommendations yeah it's a general recommendation like you know we'll Warehouse money into different buckets your short-term buckets which is immediate needs right but someone who like let's just say you're in retirement right now we want to have one to two years of liquid savings so regardless of what the stock market does you're not depleting this asset medium between you know five to ten and long term which is retirement college education planning things that you know that you're not going to touch and you just want this money to grow and collect interest more importantly it's just a compounding effect that a lot of people don't understand so you know again it's easy to put money in the 401K because they're pulling it out of your paycheck so you don't see it but what else how do we all save money somewhere else or we do see it yeah that's great advice I love the fact that you talk about like savings right because I think a lot of people will think advisors advise me to use my money and grow it but I think good advisors like yourself do give a plan as to okay you always want to invest but you also got to have money over here whether that's for an emergency whether that's for money you immediately need in the next six months as opposed to something like long-term and things like that so that's really good advice so would it be beneficial do you think if we shed some lightest to help people in the age range strike a balance between like growth and protections because some of the people like in their 30s for example they're single you know children and there's people that continue that way for quite some time and they don't know how to Pivot when it comes time so like what is the best way for people to balance those things and how does someone know when it's time to come update what they have whether it's with you or with me or reassessing because I think a lot of people think oh I've invested in good when do people need to reassess what do you think about that I think every about three years to look at everything but again if something changes overnight you want to be able to have access to someone like yourself or me to say hey my life just changed in this direction what do I need to do to my portfolio obviously the younger you are when you start investing the better because you can save a lot less you let that compounding take into effect and you end up with more and a lot of times it's also when it comes to retirement planning it's like the rule of thumbs say 15 to 20 of your income by the time every retire you're able to retire from 85 and so it's really hard for especially for kids coming out of college with high debt is like hey I have this big burden of debt how do I save and this again just into the habit of saving and as your income increases you increase what you're putting away for retirement for your medium terms for the long-term goals short-term goals no great those are great insights and I think for those of you watching that are wondering how do you create a trust to protect those assets it's actually pretty straightforward and usually we offer consultations where you can kind of explain how you put a trust together and the trust is like I said it's a legal way to protect that money and leave it for who you want there's different methods to trust and actually there's people that own properties like I don't know if you see this a lot Manny in your line of work but there's people that own different real estate properties too and are wondering how do I leave that to somebody or how do I protect it from a lawsuit or a divorce and things like that there's a lot of stuff that comes into estate planning that is actually trust focused but we look at the full estate plan and I actually worked a lot with advisors like you Annie especially you because I feel like you won't call away but the idea is that I think if you have a good team as far as like your advisor your trust estate planning attorney you can kind of merge those it's a good team to have and I think when can I work without another and so I always try to convey to everyone depending on your age We'll advise one thing or another but someone still needs to be the expert in the field so if you ever have many people that come to you and say I've been doing this my own the DIY advisor the person that advises themselves what are your thoughts on that yeah so I do have a couple of do-it-yourself advisors and people who say they're doing planning for themselves and the thing is I tell them you're not a legal tag consultant you don't know what the laws are changing you're not a legal attorney and also understanding what the rules are changing when it comes to tax minorities because the way we look at it is that your money the legality and the taxes are all intertwined with one another yes and things are constantly changing so what might have worked 10 15 20 years ago the laws and the rules are different now right absolutely when you said that I was thinking about the most recent changes and that's a good point because I'm sure in your world you see it I know it kind of intermingles but like Texas is a good thing I remember sometimes Federal versus state taxes and depending on the state that you're in or some people have like trust their estate plans are from other states and then they move here or maybe I don't know if you see that where people have accounts and estate plans that create another state were there certain things here that you know we don't necessarily have certain taxes that other states have or we do have certain taxes that other states don't and so you're right about that and I think that's the danger sometimes of people that do it themselves if there is no possible way because they're not doing this every day is a full-time job for them to be up in the know about what exactly has been changing how does it impact them and how do you elect to invest so I I was just curious if you see those because I'm sure you have to convert some clients on your own that are Mr and Miss DIY we see people who retire and they leave the state of Illinois because of state taxes right and they'll go to like Florida right right they have no state or state tax in Florida but you still have an estate federal tax that you have to deal with yes yes yep and that's other thing too it's like depending on where you live and where you reside and you know what's interesting about State planning are like when you pass it's like one of the requirements is where you actually reside at full time and so that could be a question mark sometimes we've dealt with the states in the past we've always said okay does this person actually live here or do they have a vacation home here there's people too that like you said they're snowbirds or whatever but the primary residence is here in Illinois so what do you do with that okay the scary part too is you know bring back cover and someone residing in Florida and who's a snowbird and now they're facing probate into court in two states right yes so what is an estate planning do and a trust it keeps you from being having to go to two different probate courts yeah absolutely and actually it's funny that you bring that up because I think that's part of the estate plan we do have individuals that come to us with multiple homes and there's always a plan right because that's where I think as attorneys we provide the most value because we're going to say look I would do this here and over there you could do this over there now a lot of times as attorneys we even know people or refer the client now to someone who's local Council someone that knows the laws in Florida or in Alabama wherever someone is from but the point being that there's so many ways to avoid it pretty easily if you just work with a team that does the heavy lifting for you and I'm sure the accounts are the same I'm sure like did you ever deal with people with different accounts and different State Banks and things like that are you having to facilitate those how do you guys usually yeah so we do and a lot of times especially if they have an accountant so we'll get on the phone with the accountant right to understand what their local state laws are and everything and then so how do we incorporate into the plan that they're trying to put together that makes sense and I think one of the most important things about putting together an estate plan is again working with an advisor that understands this and is taking the time to kind of think okay what is the assets that you have and where are we going so I think you mentioned a lot about portfolios and like reviewing portfolios but do you ever have individuals that are 30 year olds or Millennials that are kind of like I don't really know if I want to do this I'd rather just invest it into Robin Hood stuff like that that people just do it on their own is that something that people should try to do to supplement with something like that what are your thoughts on that so we're doing a lot of times people are just now open to the fact that diversification is Big right yes and we just came from one of the biggest bull market runs because if you think about it when has the stock market been down 20 in the last 10 years right not since 2008 when the stock market was down 37 so now people are open to have those conversations and say hey you know what I can have my investments and I tell them I got clients who say open a problem and be a day trader all you want but this is the money for these goals and these plans so you have fun with the money that you want to manage and we'll take care of everything else for you yeah I love it man I love that because you're right I think it's all about diversifying and just like you said it's almost like fun money I know that sounds totally funny to say but I have actually had people say oh that's my fun money that's what I have fun with I use that money for whatever and that makes sense because instead of putting all your savings into I'm gonna do it myself and use something like online a platform where you don't necessarily have supervision by anybody I guess you could put a portion of that there too are you seeing that more with younger 30 40 year olds or are you seeing it with people in their 50s as well what is your thought on that so mostly the younger kids right who because if you think about it the people who are in their 50s they didn't have a Robin Hood there was no child swaps or apps where you can buy and sell all day yeah that's kind of fairly new now that's interesting because I know it's new we've heard a lot about it in the last like couple years and things like that but I was trying to remember if this was always in place I think you demystified that for me because I wasn't totally sure and by the way too when we talk about assets and transferring people are always like what exactly is an asset right so just so that the viewers are watching can understand assets could be an ether from like money it could be homes it could be cars it could be anything that you have and so people always say I don't know many if you see this they'll say oh I don't have a lot and I'm like well you have at least a house right or you have a car you kids right people think of assets it's always a monetary what do I have sitting in my bank account with checking and savings but no it's more than that right I ran a guy who had some old comic books he wasn't considering it part of his assets and I'm like no let's get these valued and realize like holy cow I thought something that was a hobby as a kid could potentially turn into millions of dollars for him if he ever decided to get rid of some of these the comics that he has that's wild you know that's interesting there's people that I've known to have whether it's like coins or some sort of like Furniture that's worth a lot there are certain assets that do over time appreciate and I even paintings actually paintings is a big one where I've seen there's like certain artists that the painting will actually be worth more than when it was bought which is really really interesting but from a legal perspective though we always say put your documents in place your trust documents your seat plan because that it's a little way to distribute some of this stuff outside of just money usually particularly after like significant events like a marriage divorce having children we usually tell people like comment update your estate plan think about what you have in there or put it in place I can't tell you how many times people have it on their to-do list and don't actually do it and same with investing I have a lot of individuals that come and see us and they say I really want to invest it's just not a good time or I don't know what to do so what do you recommend to people like that Manny that just need a kickstart to do it so what do you usually say to that people always say you always invest today because you don't want Market time because we don't know what the Market's going to do right there's three things it's up or down or it's flat but throughout history and over time it more than likely it's going to end up higher than what you started with when you were 30 years ago but I also wanted to talk about you brought up the word appreciation and with trust so you have assets that have a potential to appreciate yeah it's good so even though they're not worth a lot today to protect them in those trucks because all of a sudden when they do take off you mention different art what if this artist all of a sudden becomes Mexico and so something that you've got for 10 bucks is not worth 10 million so that's amazing one of the questions that comes up a lot from some of my clients maybe using yours is what do you recommend for someone that's because they know right now like you said things are up to down also with the bangs what's happening in the media you see the things kind of folding which is why I also think about what do you say to someone that has lost significant amount of their portfolio in the past year I mean I'm assuming these are people you're talking to every day so does it make sense for them to move their funds to better their Investments or write it out what do you think so we look at some things right we look at qualified money which would be like your 401k IRAs things are dictated by the IRS codes those we probably leave alone they're non-qualified money your fund money and stuff like it might make sense right now to sell out a lot because you're going to harvest some of the taxes right so now we reduce your taxable income from the Investments that you just created for yourself so depending on what type of assets we're talking about that's where we say okay yeah you know what move this so we can take the benefit of the write-off to let it grow down the road makes sense yeah that makes total sense and it's interesting for your perspective that because like the consumer thinks I'm losing money what should I do but you literally just answer that question is yeah like you said from a tax perspective does it make sense to do that does it make sense to change to taxable income sometimes it's a good thing depending on where you're at so how about a business if business owners tend to have a lot of questions can someone's business contribute to a trust and invest pre-tax dollars and people always ask that so what are your thoughts on that so the quick and short answer is no right because there's tax rules and thought but as a business owner you could Grant your shares you can gift as the correct what you could gift your shares to the trust to reduce your taxable estate in the future but something like a 401k is like retirement plans they're going to be separated inside of a trust so if your business does become a liquid well guess what your employees and everybody else they're protected from those assets you got to keep them separated it's great to hear it from your perspective because like for me I think about it the way you do like everything is separate but you're right I know and people will assign their shares a lot of times or people that own businesses together Progressive an estate plan because they want to make sure that okay if something happens to me and they sell this business this money goes somewhere other than in Probate or it's a probate asset all of a sudden and because nothing was in place so that does happen quite a bit there's two types of trust right the revocable trust yeah the question is that when people come to you or which one should I do Stephanie should I go revocable or irrevocable so actually it's funny that you said that because the question to that is so not easy because just when you think someone understands that you're revocable versus revocable which really the biggest difference is when you can change which is revocable you can revoke at any time you can make changes and there's like the irrevocable which is basically essentially when you cannot change and but it's interesting because sometimes objectives change I've had people that came in and they needed a revocable and something happens and then all of a sudden the irrevocable makes more do you deal a lot with those many in your site do you have people that come to you more with one or the other or do you see them interchangeably one or the other or actually we're doing both right because one one other trust it gives you a cost up and a step up in basis so with the day you pass away guess what all that growth just got wiped away because of the public basis where the other one doesn't so you're gonna pay taxes based on the value of what those funds are inside of that that's the trust yes absolutely it's always more about we doing this for a tax estate type of trust are we doing this more to keep you protected from creditors divorce and everything else that the trust does yeah I love that you mentioned that so for our viewers what a man is getting into is just like the terms and actually the reasons why you don't want to come see an estate planning attorney to explain to you what the differences are because actually some people go out of their way to request a revocable trust because like you said there's creditor protection there's this there's that but what they don't realize is that there is no quote-unquote tax incentives where it comes to like if you're trying to do like generation skipping type things where it doesn't necessarily fit in one trust definitely fits for the other but you're right it's interesting because people will say I have so many objectives but I always find that never is a one-size-fits-all everyone's situation is so different which is why you want to consult with Manny or myself because otherwise you really don't know you don't really know what's going to happen to your assets if you pass or like you said is the issue of a divorce or something like that which tends to happen quite a bit people that forget about the assets they're like oh I'll deal with it later but it's something that has to be addressed they forget about that that's or they forget to retitle the assets to go into the trust oh sure I'm sure you run into that a lot it's an unfortunate thing to say but like the reason why a lot of attorneys end up really busy in Probate and actually quite frankly even like I would say estate planning if it's possible is that people forget to title their assets along the way so if you have a house and your attorney that your estate plan helps you fund the trust everything's entitled currently and the way it's supposed to then you go and sell the home and you buy something else whether it's an in the state or another state or you acquire more money and all of a sudden you need to have a step up in basis language maybe in your trust it doesn't have it like you said you run into either probate issues tax issues or you just didn't title things right so you're going to have to go to approve it and that keeps the attorney in the probate World busy we have a lot of people that end up having to hire us just for a simple probate because there's something left up and one of the things I've been seeing a lot this might be like a pandemic thing I don't know if you've seen this many but we've had some people that have come to see us because State Farm for example or insurance companies are saying hey this money that was supposed to be given to so and so wasn't titled properly either and so it's not just the house it's like insurance policies sometimes even payouts for employees there's retirement money that employees are owed that are not titled properly there's a lot of stuff to look at we just had a client that came and saw us regarding something like that where there something wasn't titled correctly and again you just run into the issue of do you have to go to probate do you have to not and it's such a big question mark because it depends on the situation it depends what the money is how much so it's always good to put in a state plan together try to re-title your stuff or if you're not sure just come visit us because at the very least maybe just calling and saying Hey did I do this right at least getting a yes and doing some verified it gives you peace of mind I think is the best way to put it so true not the way we look at it in our world is this a beneficiary pedaling or is this an ownership title in a problem that comes with either or yeah absolutely I always tell people like check to make sure you have your beneficiary some people forget some people say I open this account I got so excited I just was going to do the beneficiary thing but I never got around to it also I don't know if you see this many do you see people inherit money sometimes and then they don't really retitle anything in that sense because we've had a couple people that we've known to inherit something whether it's from a spouse or someone else and they're beneficiary and then they don't have a beneficiary each of their inheritance essentially yeah and a lot of times when we're having conversations with our clients and part of the planning process is always asking hey do you expect any inheritance or when someone gets referred to us and say I just inherit all this money and now they're concerned about the taxes that it's going to come with it but yeah we run into it all the time where people don't know how to take inheritance money or when they receive it like how do they add it to their estate and how does it affect their current the tax bracket for example we've had individuals that inherit money like you said it's part of the intake process we ask if you've inherited or going to have you ever seen someone inherit money and then they're sort of questioning whether to put it in a trust whether to invest it just outright what do you usually recommend because I know inheritance they have different rules and laws as to how long you can keep that money so what are your thoughts on that now that we're talking about it because it's a Hot Topic at least for us we've been seeing a lot of people lucky for them they're inheriting money but they don't really know what to do yeah and then inheritance we look at it is it money that's because someone passed away in a qualified account so it's a 401k it's an IRA or something like that you correct they can only keep the money for 10 years before they have to spend it because Uncle Sam still wants a cut of those taxes that were avoided but you can have money inside of a trust because it's being credited protected and everything else but you still have to follow the rules that the IRS guide that out as to whether you can keep this money again it depends is the inheritance from a qualified account or non-qualified account right and so a lot of times that's the questions that we have it's like well I got this money and so our question is okay well where was it before what was it invested in before and that's how we gear the conversation of where it should go yeah and it's a hard question we see it in different ways we've seen people inherit from a spouse we've seen people inherit from a neighbor I've seen someone inherit from someone that they were caring for so it really comes in so many flavors and I think just having the people to help you is vital because like you said there are rules I mean wrong but I think the inheritance world is like constantly changing I thought that rule existed but I also seen different things that like they're constantly maybe it's just the IRS and tax world they're just simply changing things oh yeah so in our world we have reg bi and security AG 2.0 and so yeah they have made some changes inside so that's why especially for a do-it-yourself people they're not keeping up but all of a sudden they go to do their taxes and also oh there's a penalty because they didn't take the money out when they were supposed to that's terrible I always say in the show knowledge is power right the more that you know the more that you grow and there's no way like I said for the people doing it on their own and I always tell people like please please don't do your estate plan by yourself and please don't just invest by yourself without least getting in a second opinion at least once you know because it at least sheds light as to what are the gaps I guess depending on the year Anything could happen and when you pass what are the laws in place then and that's the part that gets a little bit dicey which is why they hire us as a professionals help them with that because we have to keep up with that there's times that I have clients that show up with the state tax documents and I'm like all right what'd you do this oh well I just went on a website and created and downloaded the let's say planning documents for the state of Illinois and they haven't done any changes in the last 10 years to it it's quite amazing and respectfully to those folks I appreciate the initiative I've actually seen more estate plans that have been like what's in them is intended to be right like I know what they're trying to get at but what makes me so sad is when I see these documents that they're not even properly executed to make them valid even if it was like borderline maybe they could get away with it it's not even valid and that's really the number one issue that I see is that it's not valid it might as well not exist and that's a pretty scary thought Manny I don't think I asked you this but if somebody wanted to work with you how do you get paid or how does the free Arrangement work so we have tours that we work with clients one that we're looking for advice then as a fiduciary we charge a financial advice and it's an ongoing relationship throughout the year the other way is if someone just wants something like the other day I did a rollover for somebody and that's all they needed to do so it's like okay we'll do very transactional type of one time thing exactly but when they start asking them about the fees then we start looking at it and the fees can go anywhere from a thousand the highest I've ever charged was almost seven thousands right yeah and just a complexity of the case right because I have some clients who are on the way to be very wealthy but just because they're worth x amount doesn't mean I'm going to charge them a percentage based on that it's more how much time and effort does myself in my back office and my team have to put in together to put this plan in place that makes total sense that's great well thanks so much for that that's great I just wanted to educate people in case they're wondering so if anybody has questions for you where can they contact you phone number or no actually you have visit fine but three one two four three four five two one or email I was gonna say I have your cell but I won't give it out yeah I actually did that once I don't know Friends Podcast and I was getting the strangest questions and everything I'm like no you know what let me filter everything out through my voicemail is there anything that you want to cover that we haven't covered yet that you think important for your position and for someone that's interested in putting together an estate planner working with an advisor over together is there anything that you think we haven't covered I know you talked about especially with real estate and so what I see a lot of people are just doing a quick deed right now LLC oh yes the quick claim deed is very popular everyone loves to just throw the word out there like it's this easy thing yeah so your thoughts does it make sense to do that or does it make sense to do an LLC or put it in there I'm so glad you asked I love talking about this okay so this is the way I explain it there are things that are a good way of doing things and then there's better way to doing things right so a lot of things I think sometimes whether it's cultural or what they've heard people loved it they're the word quick claim deed for putting people on the property a lot of people that call will say I want to put my sister on it because if something happens to me it goes to her so we're going to enter her well there's just so many rules with quick claim beats quickly these are actually very tricky because first there are lenders in this world that do the loans for the buyer where there are specific instructions that say you can't move the home to someone else it's actually a violation of the loan so that's one thing but aside from that even if you start adding people it gets so complicated why because the people you're adding is if your intention is to leave them the home there's better ways to do it whether it's in an estate plan or a transfer upon death there's so many better ways where you don't really run into the risk of two Estates being involved with one home we actually had people that have had up to four to five people on a deed and as you can imagine as soon as somebody passes or somebody gets divorced or something life-changing happens all of a sudden the home is a big question mark and so I'm not a huge fan of just adding people to the Deeds or throwing people's names on there is it's a poor plan for leaving the home to someone else that is not what I recommend a lot of people do it but that doesn't make it better it actually makes it like a I think it's just like the Band-Aid oh this will make me feel better for now but there's a lot of unintended consequences with the quit claim deeds as far as the LLC goes LLC's do make sense especially if you're the investor type we work with a lot of people that are investors so they don't necessarily live at these homes they're renting them and people build like their real estate portfolio it does make sense to create like a series LLC or to do something where you have this sort of Silo between yourself and the home in the event of a lawsuit or things like that and there's still ways to transfer those interests in the LLCs to your heirs by creating an estate plan so I think the LLC does make sense in some ways it just depends on the client what the objectives are do you deal with those a lot on your end as well when you look at it says I'm sure because if people have multiple properties you do on the multiple property and one of the things that we look at is like in a series about LCS right for against texture and being able to do what you want and especially like when you have multiple investors and families involved in property then putting their money together so I think the rules inside of a trust are such Rock Solid rules that when you go to court you already laid out the blueprint we're just following what the blueprint says yeah yeah absolutely and I love that you said they have more rules like the way I always explain trust as opposed to a quick playing we're doing something that's a little bit more laxidasical or not as much protection is there is a lot of protection and Trust regardless of what you put in the trust everything's customizable by the way I've seen that the trust rules where it comes to selling the real estate or hanging on to it or wanting you wanting to pay off the real estate there's so much more protection for the families I actually see less fighting less hassle between the banks and the institutions that are expecting payment on a mortgage when it's in a trust as opposed to the decedent's name and so there's a lot of protection I'm sure it makes your life easier too yeah and then one thing to us I see a lot of like my 50 year old clients who are talking about Legacy planning and wealth but then they don't have the trust and like trying to explain to them okay what you're telling me is going to fall into this no no but I don't need it but trust me because again you want to control it from the grave that's exactly the words I use Manny that is governing from the grave and the good thing it doesn't even have to be from the living trusts for example could be used even during incapacity and so I always thought that was super important because there's two different methods for trust well as living trust irrevocable is a little bit different but the point being that there's multiple uses and you're right you're governing in another way that's very very smart especially when you work so hard to do that and build up your assets and speaking of assets actually we just had a question that came in on the Facebook live here someone is asking if sneakers are considered assets and I don't know if you know about the sneaker World sneakers are definitely not cheap items and so someone has collected sneakers for those sneaker heads that are watching what are your thoughts on that do you think that person should think about protecting those assets definitely and especially you know their authentic Jordans and stuff like that I jokingly tell one of my friends if you ever lose your job you can start going to eBay and selling these shoes that you've collected for the last 20 years and you got a couple hundred thousand dollars just sitting there right so don't sweat the small stuff because at the end of the day we have to sell one of your gym shoes you'll get some pretty good money for it because again and assets is not just money it's something that derives a value and to someone who doesn't like sneakers and I use Jordans because those are the more popular ones but they look them well they're just Jordans right they're not products they're not Manolo shoes they're not Gucci they're not Louboutins but in the sneaker World they'll go for more than what Louis Vuittons go forward or anything like that yes absolutely this actually hits close to home I know multiple people that are quote-unquote sneaker heads and for the longest time I was thinking people actually pay these prices but they do I mean the day that that Jordan is not in style I don't even know if we'll be around because they've been in style since they came up and the value of a Jordan sneaker and like you said people that don't really understand like basketball or sneakers may not even care about it but there is a community there's literally like people that are in the sneaker world that do see the value no different than people that are into paintings or people that enter cars or whatever the case may be like you said assets can come in all different ways and not just money now have you ever worked with someone like that Manny that had more like the tangible item as opposed to the cash yeah I had a lady who had a ton of Louis Vuitton and I forgot what the other brand of purses are that were vintage that she got from her mom that she inherited so it works they'll come to me a second but right so Louis Vuitton has been around forever in a day and she went look at what the prices are and they were all like multiple thousands of dollars some of them like 100 and 200 000 dollars worth because of it being the brand it is so those are the things that we want to protect and make sure that she's able to pass them on to her heirs or if she wants to sell again now we're going to talk about the taxes that come up with selling something like that yeah yeah that's interesting I love that you said that the taxes that come from that because I think those are the things that the people that do have the tangible items don't think about and if you sell it during your lifetime I know that there obviously is something to claim on it but Mandy what are your thoughts on people that say no I actually want to pass these down is there any benefit to those tangible items getting passed down as opposed to selling up during their life there is we talk about life and death and with that and we'll bring in the trust you're able to get a cost up in basis right so all of a sudden now something that might have been worth a hundred thousand is worth from that point on to you is what you're going to pay taxes not on the value that is derived when this person bought the purse for 100 bucks and now you know you'd have to pay taxes on 999 000 worth of gains and that's another thing too we talk about the between capital gains short-term and long-term gains and what the tax consequence and the different levels of taxes that you have to pay on those things yeah it's quite amazing isn't it that when we see step up and basis the fancy way I think for saying you basically benefit your heirs in many ways they avoid having to pay more taxes on something if you would have properly planned before so I love that you mentioned that because again for like Louis Vuitton's if you've ever gone to a Louis Vuitton store I mean I definitely have and I she's a little small personal little purses that are in at least eight thousand at the gate and that's now who knows what it'll be worth five six years from now my daughter's got a nice little coin purse that she pulled out on vacation and this lady saw it and she's like oh my gosh it's a Louis Vuitton with the little purple flowers that value to them was 10 times more than what it cost when we first got it for her that's amazing that's cool I love that that's really fun it was it just goes to show again just knowledge is power the more that you know about those things the better off you're going to be especially if these are assets that are increasing in value over time which is quite amazing I mean thanks so much for joining us today I really appreciate it obviously if you're a wealth of knowledge so anyone that's interested in Manny services please reach out to him he's a great person to work with but he also knows a lot of stuff so it's nice to just talk about things and I wasn't thinking we'd talk about sneakers and Louis Vuitton but hey I'm sure people are interested to hear it because people may not have the cash but they definitely like to splurge on the tangible things there's nothing wrong with that nothing at all and they don't realize that they're staying on Gold Mine sometimes exactly I love that and I think some of our viewers will be happy to hear that because like I said I have a lot of clients that have the tangible stuff but not so much the cash but like you said you're actually sitting you just don't know it so thank you again for joining us and thanks for having me yeah I know it's a pleasure to have you and it's great to just talk shop but also just talk about like the basic stuff because again a lot of our viewers are just here to watch and we use our platform to kind of educate and I think hopefully everybody learns something today thank you so much to our audience for tuning in if you want to contact us you have our information on the screen below and keep in mind it is essential to can consult within experience financial advisor and estate planner specifically if you live in Illinois just to make sure that everything is correct everything from your assets to where you want your things to go upon your passing or God forbid you become incapacitated we have a plan for that so I think preparing is better than not for any unexpected events so make sure your content don't leave it up to chance well and we say not having a plan is a different plan might not be the right plan but it's still a plan this is that's such a nice way to say it I usually call it like jumping out of a plane without a parachute but that's just me awesome well thanks again for sharing this strategy thank you yeah definitely and if anyone has any questions feel free to chat us after the show and thanks for watching I hope you guys have a good day and we'll talk to you soon take care