EP 545 – Protecting Your Assets With Estate Planning With Brian Price And Jennifer Gligoric

NCS 545 | Estate Planning Asset Protection

NCS 545 | Estate Planning Asset Protection

 

Asset protection is a notoriously murky field because people don’t necessarily get the knowledge needed to do it properly, in a way that truly protects them. Estate planning is one of these lesser-known solutions that grant you high levels of security for your assets, especially if you’ve been able to acquire multiple throughout the years. Brian Price and Jennifer Gligoric of Leafy Legal Services come on to run the gamut of estate planning as a form of asset protection with host, Scott Carson. Despite not everyone seeing estate planning as a form of asset protection, Brian and Jennifer prove otherwise, backing up their knowledge with years of stories. You never know what’s going to happen to you, so you may as well make sure your assets—and family—are set and secure.

Listen to the podcast here:

Protecting Your Assets With Estate Planning With Brian Price And Jennifer Gligoric

A lot of us are working towards the end of the year and towards sprouting new things in the first year. I’m excited to have two amazing people from Leafy Legal Services joining us to talk about some of the year-end things you put in place and some of the things you can put into the future. We’re honored to have a Brian Price and Jennifer Gligoric. Tell me a little bit about what you guys are doing over there.

We provide asset protection for real estate investors. We make sure that we can hide your assets for you legally. This is not for any shady individuals out there, but we make sure that we layer protection for you and that is difficult. If someone wants to sue you, you get into having a vexatious litigant or let’s say you do a buy and hold and you’re right next to a neighbor and you’re excited for your renters. They turn out to be crazy, which happens sometimes. Being able to sue you is an endeavor that attorney’s going to say, “It’s not worth it.”

We try to structure things along with the state plans and other retirement options that are specifically tailored for real estate investors or entrepreneurs to provide you the maximum protection. In the end, we also set up structures that help you in your business, grow it, and be more profitable. When you do things the right way, these boring little things that you set up in the beginning, it’s amazing how they end up helping you later on. Think about things differently and grow a lot more exponentially than you would have if you just wing it.

Brian, do you want to add anything to that?

We do state planning as well. It’s another offer that we help people to make sure that when things happen. Life is weird and you never know what to expect. Having an estate plan in place, a lot of people think a will is enough, but depending upon what your assets are. Usually, you need something a little more comprehensive. That’s another service that we offer to help people, especially as we’re coming into the year as well. It’s the best time to get that all settled as we go into the new year.

You give the gift of planning to your loved ones.

It’s a little bit more than that. Most people think in a state plan is just a will, but they don’t think about the eventuality of what happens if someone gets hurt. Let’s say you’re an investor and your partner is your spouse, but they become hurt. Do you have your directives in place? Do you have a living trust? Do you have things set up with an agent trust and the beneficiary of that trust is a living trust? When you have things set up properly, you don’t have to worry. You already have a game plan.

Having that game plan in place is important. I’ve talked to people and they’re like, “I don’t want anything to happen to me, so I don’t want to do it.” I’m like, “The people who do it are the people that it never happens to.” It’s the people who are looking at their texts and they fall down the eight-foot hole. They’re in traction and nobody’s running their stuff because they have nothing in place. You need to get that. It’s an important thing to do. It’s not as expensive as you think it is. It gets everything tied up and it can help you your taxes and things later on.

The idea is to know how you’re exposed and a lot of people want to ignore it. It’s easiest to ignore. A lot of times when we’re not sure about something or we’re afraid of something, the first thing we do is hide from it, which is normally the worst thing to do especially if something happens. You usually want to get some advice and some understanding. At least know where you are exposed or what you could be doing better. Especially at the year-end, there’s a lot of stuff changing and new things are happening. It’s always good to be understanding where things are going, even if you do have some asset protection or estate planning, it’s always good to be up on it. If you have someone that you’re speaking to on a regular basis, that’s great. If you’re not, then you should be speaking to someone probably every six months to a year if you have some asset protection. If you don’t, then you talk to someone.

A lot of people think that you have to be rich to think about these things. Our attorney works with a nonprofit for lower-income people. Sometimes, if the only asset you have is a house, you’re going to want to think about wanting to have a plan for that. There was a family that has a house and they did not have a lot of money. They’re going to low-income services where he’s doing pro bono work. They had a great grandfather that had several hundred acres and it was a lot for them. That was the only pothead in this acreage. No one had ever set up an estate planning or any plan on record. They’ve lost it because of some piddly tax issue and it ended up not being a lot of money.

When you want to think about generational wealth and let’s say all you have is the grandma’s house and everybody else is busted. You’re all renting and you have nothing else, but you have that. Being able to come up with the plan and take care of that, it can be the difference between generations still in the same hamster wheel of a loop and some kid getting that chance to leverage that and make a difference. This estate planning is for everyone and that’s one thing that I’ve found.

I’ve told my story a bunch of times and I told it to you, Scott when you came to our show. I was a pregnant homeless teenager and I come from a great family. You think I had a silver spoon in my mouth, but at that point in time, everything crapped out. I met lots of people who ended up in the system that they didn’t need to end up in it. The mindset of poverty put you in there. They’re just small little tweaks. The thing I’m learning about is that the way poor people are taught about money and savings is not the same way other people are taught. It’s the difference of what a poor person would say, “That’s a risk you can’t take,” and someone else would say, “That’s a risk you have to take. If you don’t do that, you’ll never get ahead.” It’s making those choices.

We help educate people when they call us to talk to them. We get investors that are in consortiums and they are doing multifamily. They’ve got buy and holds and they’re doing flips on the side. We’re doing big plans for them. We get the person who is like, “I just got out of the military and I’ve got a little bit here. I don’t know where to start, but I want it to all go into the lawsuit. What can you do for me?” We’d set up a basic series LLC under an anonymous land trust, so at least they could feel that protection that they’re not going to lose it. If they make a mistake, they don’t have to lose everything because that happens a lot.

People get in the game and they go onto BiggerPockets. They’re learning everything they can, but still, we’re all going to make mistakes. Don’t let that mistake be something that completely wipes you out and you can never get back on your feet again. One lawsuit where you end up shelling out $10,000 to $50,000 on attorney’s fees and if you don’t have that, that’s it for you. If you are not an attractive person to even sue and you get passed by, what a world of difference that makes. We try to educate people and show them that an ounce of prevention is worth a pound of cure. Once you get sued, we can’t come in at that point. You’ve got to go through that course.

You talked about using an anonymous trust. I know my readers are like, “What? You set an anonymous trust. How does that work?”

NCS 545 | Estate Planning Asset Protection

Estate Planning Asset Protection: A lot of times, when we’re afraid of something, the first thing we do is hide from it, which is the worst thing to do.

 

A lot of times, anonymous trust can be put for multiple things, but most of the time, it’s for real estate where you can put that LLC that owns an asset anonymously. What we mostly have our clients do for structuring is have a parent LLC, which then owns other LLCs that have anonymous trust incorporated into a certain property that they own. We put that property in that LLCs name under an anonymous trust. We show people all the times when a customer comes to me, it’s like, “I own X number of homes, but I own them in an LLC.” We can bring that up and we can show, “We see a mall right here and they’re all exposed.”

If you’re sued, lawyers are going to do the same thing and say, “Let’s pull the public record. What does this guy own? He owns this LLC that owns these ten properties.” Whereas if you had anonymous trusts, it would see the properties would come in because you have to buy them under your name. As you transfer over into an anonymous trust, it would show that those other corporations have these anonymous trusts of something that is in a public record.

It’s a complicated legal theory that’s why you have to have someone to do it, but you don’t want to do it yourself. When you’re thinking of it, you’re operating under an LLC that you have. However, that LLC is going to be managed by an agent trust. A trust is a private document. It would be like someone trying to sue a savings account. Typically, trusts have lots of people who want different things that stop and trusts aren’t even filed, so it has this name and then it stops.

Your name’s not on that. That’s where you may be running it, writing the check or maybe like, “I’m here,” but legally that’s not who’s managing it. Let’s say you’re running a regular dropship eCommerce business, then you would have an LLC that’s managed by an agent trust and then the beneficiary of that agent trust is a living trust that’s underneath your estate plan. They’re not going to find, they’re only going to go to that one LLC if they are able to pull it up and then it stops there. You’re not an attractive candidate to sue. That’s what we’re talking about in anonymity.

If you’re off chopping up bodies and keeping them in big mass graves like some psychopaths summer, then you’ll have the might of the government that comes to you and something like that is going to stop it. That’s not even a series LLC. A series LLC takes it even one step further than that to the ultimate ideal protection for real estate investors. You’re doing things under a managing LLC, but then you have another anonymous land trust that is created. You have a managing person that you’re not on. Underneath that, you have the series parent LLC and then underneath that, you have children LLCs. They have children trust and then your properties are underneath that.

It doesn’t even have to be properties. Let’s say it’s a whole car collection or an art collection that doesn’t change. That can go onto an LLC up to sixteen LLCs under that. It’s a powerful structure. All you have to do on your end is your accounting has to be straight and if it’s not, it should be. We show you how to do that and then you get with your CPA and they take care of it from there. A structure like that, if you’re driving down the road and you get into a fender bender, then you don’t have to worry about the first thing that sharky attorney doing. He’s pulling up all your information saying, “I’m putting a lien against all these properties,” because it’s all public record. If you don’t have a structure like this, it’s public record. All those things have to be filed. You do have to buy it under your name because you’re using your credit. We don’t want you to think you’re buying property under an LLC is expensive and odious, and a difficult task to do.

Let’s fix that real fast. I don’t want to spread that lie. No offense. I’ve bought hundreds of properties over the past years without having to use any of my credit. There are lots of different ways, especially when you look at the environment on what’s going on out there of subject to investing, wrap-around mortgages with owner financing or buying the loan, you don’t need credit to do a lot of that stuff. I get where you’re coming from, Jennifer, but I don’t want to even strike that point.

For regular buy and hold, there’s a lot of stuff. It’s not as easy to go get a loan under an LLC, it is for a regular person.

I agree, but a lot of our readers out there aren’t going, “I’m going to the bank for a loan on a property.” That’s the part I’m trying to get, especially dealing with investors where they’re doing many things creatively. They’re using other people’s money, using their self-directed IRA funds to fund the purchase or doing joint ventures. I haven’t bought anything in my name in many years, for the most part. It’s all in three entities. We’ve been talking about a series LLC and I know not everybody is familiar with that. I have one and I use it extensively, but a lot of people don’t know about it. Is this something that’s exclusive to Texas? How many other states are offering it?

Eighteen states have their own series LLC. Alabama was the last in 2005 and other states are pending. Puerto Rico is a territory, but it’s another one that uses it. However, we prefer Texas because Texas taxing is attractive for investors and the climate here to be able to not have a state tax. Everything else that goes along with having your corporation set up here is attractive for businesses to begin with. That’s why we prefer I get that.

Share what a series LLC is. How is that different from a regular LLC?

A series is one entity. It is one major holding entity called the parent LLC, then underneath the parent, you would have children LLCs, which are completely different entities legally, but they’re held underneath this parent. Underneath those children, they have their individual trust and then underneath those trusts, that’s where you hold the property. All that paperwork goes into the series LLC.

It’s not that complicated. A series LLC is the main parent and you can add multiple series to it. Those would be considered the children LLCs. We want to keep it simple for everybody here.

We did it simply, but when you’re setting up a series LLC, there are arms like clauses that are set up. The idea is onion layers. You want an arm’s length from other entities because what you don’t want to have is how people used to structure it with multiple different LLCs. You have ten different LLCs because that’s like a house of cards. Once you find one and you find your name, then they all can fold. You need arms like clause of separation between the two and that is built into a series LLC structure if done correctly.

It’s labeled differently, so it’s a different series. Series A is independent and those assets that are in that is independent of series Z.

NCS 545 | Estate Planning Asset Protection

Estate Planning Asset Protection: The way poor people are taught about money and savings is not the same way other people are taught, and that affects the choices people make.

 

Your accounting is going to be different. You’re going to have the operating agreement for that. For any LLC, you have to have an operating agreement. In that operating agreement, you define certain things. You want to make sure that operating agreement. You have the language and the wording that talks about the arms-length separation between how this will operate. If for any reason that will come into play, let’s say Florida has one case where they were not able to in the end, but they were almost able to break open a series because Florida does not recognize the series LLC. Somebody used another state. It was not Texas to have a series LLC there, but because of the operating agreements that were in the child and parent series, and how the accounting was done, it showed that there was a separation between the entities. They weren’t operating the same.

The thing that I’m sure people are going to be asking as they’re reading to this is like, “Do I have to pay to file a new LLC every time I create one of these?” What costs are we looking at for people to create a series LLC?

For a series LLC, you can start out at around $5,000 if you have a property, and then it can go up from there. Let’s say you’re going to want ten properties. Property transfers are difficult. You have to have someone to research the deeds. You have to go in and every different county is going to be different. As everybody knows who has done closings, there are some counties like Cook County, New York City and Orange County in California that asks for many ancillary documents. It can be expensive to do a single property transfer. Property transfers are going to run you anywhere from $750 down to $250 depending on if it’s a regular county. A good cost for that is around $550 to $525 for property transfers, so that’s going to add from there.

If you want an estate plan that goes, that would be up from there as well because you’re going to want to roll it in. If you’re going to have multiple properties like that and you’re in this business and this is what you do, the last thing you want to do is to become incapacitated and not have a plan on what to do with your business. You’re going to want someone to take care of that. If God forbid anything happened to you, you’re going to want to have a pour-over will. At the last minute, let’s say your company is buying notes, buying properties and doing stuff, but that’s not specifically named in the will, then you’re going to want to be in the pour-over.

An ideal client for a series LLC is somebody who’s got more than one property and who is buying property or notes on a regular basis.

If you have a plan to get a couple of properties, even if it’s just one, you might as well start out with that. Get your structure set up straight, understand how it is, and get your accounting set up to work with that structure and then after that, it’s just calling up the person like calling us saying, “I’m buying a new property over here. Take care of it.” We take care of it for a nominal fee.

It keeps you protected from the beginning. We’ve had people that came to us after they’ve gone through lawsuits and lost everything. Knowing what went past, they’re starting over and they’re like, “I want to start outright. I want to make sure that I have my ducks in a line and everything is great in the world.” I want to make sure that the set up was right. It’s like, “I’m going to be doing this. I’m going to be buying four properties a year. I know what I’m going to do therefore I want to get my structure in place now.”

Anybody that’s looking to do that, it’s worthwhile to get it done ahead of time because then the headaches of what you need to do and transferring things over. A lot of times, you do it yourself where you’re trying to get all your structuring there. You realize you buy your first property thinking you had everything done, but then you go back and you talk to someone like us that says, “It wasn’t quite the way you need to do IT.” It’s good to get advice before you even start, even if you haven’t and you’re thinking of it.

It saves you a lot of money. You can just pay for the structure and then you’re not hit with, “I have ten properties and I need them all transferred over right now.” That’s expensive and it takes longer to do that. If one at a time, then you can take care of that. You’re going to want to do the thing that’s most cost-effective for you, too.

Anybody having an LLC in or outside of California’s going to pay their pint of blood of $800 filing fee every year to local or independent, even if you live there or outside. That’s why I’m willing to imagine that California doesn’t recognize series LLCs, is that correct or not?

No. You need a Delaware Statutory Trust structure if you’re going to be in California, Massachusetts or Delaware. Doing business in California, the way they speak about that can be difficult. You can be hit if you have a couple of properties. How they define Doing Business As is encompassing, they want your money. They have it written in a way that it can be more than $800. You can be hit for multiple properties, late fees, fines, and penalties if you don’t have that structure up. In California, we always recommend a DST and how to get that set to do your accounting for that so that you’re not hit with the Doing Business As. Thankfully, that is a legal structure and that is an accepted protocol for California. You’re not going to get in trouble for that later and it works well for investors.

Brian, are you guys working with investors all across the country or primarily in Texas? What’s your footprint for investors that you’re working with?

We work across the country and every state we can handle. I’m based in Southern California, even though the company is incorporated in Texas. I’m big in California and have lots of hoops they go through, but we can handle all of those. Whatever state you’re in, we can handle and we can suggest the right things for you as well. We have legal people in every state that can help you to make sure that we’re following the rules of your state or even your county, depending upon where you’re at and make sure that you’re on the right track.

Jennifer, if somebody is looking at putting the next state plan together or will and look at some stuff there, I know it’s going to vary on a person-by-person basis, but what’s the cost basis for something like that? For example, I come in, sit down and try to put a will and estate plan together.

We only do one type of estate plan, so we’re not just going to do a will because we don’t think it’s effective and that’s not our clients. Our clients are either real estate investors or entrepreneurs, so they’re not like someone right out of college who has no assets. You’re looking at anywhere from $1,500 up to maybe $2,500, which is not a lot for that, considering that you’re getting all your directives, will, and pour-over will everything tied in a living trust.

NCS 545 | Estate Planning Asset Protection

Estate Planning Asset Protection: Getting your estate plan done opens up for so many different plans, especially for your family.

 

That’s important because the directive is half the battle. You’ve got family members. Being able to direct and say, “This is what happens. This is the money that goes towards paying the mortgage,” even after I leave because we see a lot of that in the note side of space. We’re buying a note where the borrower’s deceased. It’s not funny because the children or the people that take it are not paying the mortgage and I’m like, “No offense. Because mom or pa died, it doesn’t mean that the mortgage does not need to be paid. You’ve got to pay it still.” Setting up those things in a will can help you keep it on probate, which all know that’s a long process.

Probate can be a nightmare and anything can happen in it. It depends on who you get. We’ve heard of it with numerous people on our podcast or just listening to people that have gone into probate. They had things spelled out in a will, but it wasn’t right or wasn’t written correctly. All of a sudden, some eighteen-year-old gets the bulk of an estate and the bulk of all the bills because they’re the only one. You have this kid who doesn’t know what they’re doing and then they just go nuts. They’re ended up with debt because they went nuts. It can go horribly wrong in probate because you want to think that they’re going to care, but they don’t. They just want to see how much money they can get, get through it, take what they can and make sure everything’s settled.

If you get someone who’s a little bit sketchy, some the state or whatever, you don’t know what’s going to happen with that. You want to have these documents set so that they have to be followed and have little wiggle room so that anyone in the future knows what to do with all of that. The last thing you want to do is saddle your kids with bills or a lot of things that maybe you don’t want them to know. There can be a lot of stuff you can avoid, even personal, like issues and things like that. Keep your legacy the way you want your legacy to be. The last thing you want to do is have a bunch of skeletons come out of the closet when everybody’s dealing with grief and other things like that.

We’ve seen throughout history, even the billionaires that came out of the industrial revolution, you’ve seen all of them have lost their wealth, except for the Rockefellers. They’re the only family that’s kept their wealth through generations. They said that statistically, it takes about three generations to take all of someone that is accumulated a large amount of wealth to be gone. If you want to protect yourselves, this is the way to do it. Have an estate plan so that you can have that generational wealth because even the richest families that we’ve had in America have all lost it except for one.

It’s rumored that he said on his deathbed, “Nothing controls everything.”

A lot of people don’t think that they should also involve their kids in the estate plan because it helps them think about their legacy and what they’re going to do. It’s a great teaching and learning tool as well. The last thing you want is for kids to be blowing off college or high school thinking, “My mom and dad are made,” but something happened only to find out, “I don’t have the pot to be in because they’ve spent it all.” You want to think about these things. It’s just your mindset on it that can make a big difference in how well you live the rest of your life and in how you think as well. Set up things correctly.

It’s amazing how many people we talk to and we go through the process of stuff. We’re not financial advisors, but we can also say, “Have you thought about this? We had a guest on our show and he talked to this guy. Have you thought about this with what you have? Maybe you should talk to them.” It changes their whole outlook on anything and they go, “I never knew about that.” I always heard that reverse mortgage is the worst thing in the world until we got a certified senior advisor on our show by the name of Debbie Boyd. She talked about those and how they can change lives.

If you’ve got mom and the only thing she’s got is this house, she can’t take care of it anymore and it started to go down, structuring that correctly and using that as an investment property, you could take mom out of it, get the money, fix the house up, and make it a rental. There’s cashflow in and mom is in a senior living place that she didn’t think that she would afford, her whole life has changed overnight, and her health improves. That one thing like that, I had no idea about it. I’d heard only bad things on the news and she said, “That’s because people didn’t pay their taxes and fees, and they didn’t understand because it was not correctly explained to them.”

There are lots of things that go into a reverse mortgage of turning the property. You’ve got a lot of equity and it’s not a credit-based loan. Both parties are borrowers that are at least 65 or older. It turns the property into an annuity if there’s enough equity there to then pay the owner of the property, in this case, an elderly person, either a payment each month or we remove the monthly payment going out. I’ve seen that in my previous days as a mortgage banker and mortgage broker getting people that were facing losing their home and being able to save their home and stay in a house. I had to make payments for twenty years or able to pull some cash out as a stipend to help them live. In expensive side, let’s face it, it’s getting expensive out there to live as you get older with healthcare and accounting costs.

When you go through an estate plan, you can get lists of some ideas to go. Once you get it done, it’s amazing what it opens up for you and opens up for plans for the kids in different ways and things to structure.

What’s the best way for people to get ahold of you guys to schedule a phone call with you or jump on a website? What’s the best way for them to reach out to you to get more information on the solutions and services that you’re providing?

You can reach us at LeafyLegalServices.com or LeafyAssets.com. Both go to the same website and you can contact us. You can schedule a free fifteen-minute discovery call with us. We also have our free eBook on there for Asset Protection as well. We’re welcome to speak to anybody that is interested or curious about how to protect their assets, estate planning, and any other kinds of questions. We’ll be happy to help you. That’s what we want to do and that’s our message that we want to bring to this area.

Thank you so much for taking the time out of your busy day. I know you guys are busy on the phones and working with a lot of clients, not only in Texas but across the country to help them with their services and solutions out there for their legal side.

Thank you, Scott.

Take the opportunity to check them out. I know we all get busy, but we’ve all got fifteen minutes to schedule a phone call to see if you’re in the right spot and you get the right structure. In that way, knowing is knowledge because we all that if you’re failing to plan, you’re planning to fail. Go out and make something happen. We’ll see you off the top.

Important Links:


Love the show? Subscribe, rate, review, and share!

Join the Note Closers Show community today:

Leave a Reply

Your email address will not be published. Required fields are marked *