Hi, This is Lee Phillips.
I want to talk to you for two seconds as a small business
owner.
You've got your business.
It's probably your most valuable asset.
I think that it's your most valuable asset.
It's your biggest pain in the butt,
but it's your most valuable asset.
You go down and you do estate planning, you go see one lawyer
or you go to one internet site or whatever it is.
You get your trust.
You get your will, and that's great.
You avoid probate.
You go to the lawyer, you set up your LLC.
You do your LLC on the internet, wherever you get your LLC.
And you are the officer or director.
In LLCs they're called members, the owners, and managers,
the officers and directors.
If you've got a corporation, you're the officer, director,
and you're the stockholder.
And you own your little company.
That's great, no problem.
However, we never interface the estate planning
with the business planning.
The lawyers don't do it very often,
and certainly the internet sites never put the two together.
We've got to put the two together
for you, because your business is an asset.
It will be probated when you die.
So we've got to avoid probate, and the fact
is, 95% of the businesses in the United States, they fail.
When the owner dies, it's over with.
One of the major reasons is is the family, the heirs,
the guys who were taken over the business,
they can't get it through probate fast enough to sell it
or to actually operate it, because the court's going
to be in on all of the stuff that's going on,
while your business ownership is in probate.
And it's really hard to manage your business
through the courts.
So the way you do it is you set up your living revocable trust,
and then you are not the member anymore.
You're not the stockholder anymore.
The living revocable trust is the stockholder.
Now, I've got another couple of YouTube videos
on how to do this.
If you're going to be a Subchapter S, either as
a taxation of your LLC, or a taxation of your corporation.
If it's Subchapter S, you've got to have a very special living
revocable trust.
Otherwise, the IRS comes back and says, no, no, no, no.
You're a chatteris the C corporation.
We're going to recalculate all your taxes,
and that's a disaster.
So you have to have the right trust,
and you have to be able to make it so that the business is
owned by trust, not by you.
And there's a lot of things we've
got to do to get from here to here to make it
so your business is not going to be probated when you die.
But you can kind of tell I get a little wound up about this.
This is important, because the family loses
dad's medical practice when he dies
because by the time we can sell it,
it goes through probate all the clients, they've gone bye-bye.
So we've got to get it so that there's
an instant transfer when you die of power in the company.
No probate.
Whoever you pick can go on and manage
and can sell the business, practice, do whatever they need
to in order to wrap up your estates
or to carry on the family business.
So this is critical.
We've got to interface estate planning and business
structuring, and that's very seldom
done for the small business person.
So I'm going to lead you through a series on trusts,
and you've already done the formalities and stuff
of the business.
That's great.
We've got a series on how to do the formalities
of the business.
Make sure you get the tax benefits.
Make sure you get the asset protection,
but we've also got to make sure that you do the estate planning
right.
This is Lee Phillips, and I'm passionate about not losing
your business or dad's business when
dad dies so that you can take the business
and not have it be stuck in the courts.