Now I'll tell you that I don't have Ben here at the moment, so I can't promise that I'm gonna get otter started properly. Oh, you know what to think it's here. Nevermind
Doctor genius otter.ai
I see it yay for me okay, let me get this started recording in progress well Happy New Year everyone and welcome to another abundance group just call for business trusts. Today is supposed to be a business trust training. But since we missed our business trust q&a call last week or this week I think it was maybe it was yesterday. Thought I would start us off by doing q&a And not training. Anybody have any business trust celebrations before we get started? I do. Tell me I do. So this is Diana and
Julie. spent an hour with us on her vacation time getting four of the documents notarized to be able to record this week from our living trust and our LLC to put into divisions of the business trust.
guys are party bloopers. Anybody do you want anything exciting? For New Year's had a great meal. Last year and it was really good. Okay, so what kind of how did the how are they artichokes? Cooked,
marinated and caught your brain and you're actually
so whole artichokes have just started show carts. Just the hardest. Gotcha. I make stuffed artichokes. I also like to make fried artichoke hearts so it did a little bit both.
Yeah. Anyway, any other celebrations? How'd you guys celebrate New Year's
watch the ball and we have fireworks every year. But the fireworks were crappy this year. Every one of them was red and green was kind of boring. But usually it's nicer than Fourth of July. I don't know if it was because of the hurricane causing issues or what but it wasn't the normal amazing fireworks that we have every news. Okay, so we have a couple of questions asked in advance. I'm going to take the second ones first. They're both from Luigi. She asks, Should I use QuickBooks class slash location? For bookkeeping? For divisions of the business trust? It depends. So if you have real estate in separate divisions, I could see using the class so you only have one QuickBooks account and just use the class to track each one's book separately. But in active businesses, businesses with active business income, sometimes even need a new EIN number. And if that's the case, I think you really need a separate QuickBooks Online account. Would you agree? Blaize? Yes, I would. So it depends on what you're doing. Yeah, depends on what you're doing in the division, but just real estate. Okay. Maybe you don't need a whole QuickBooks Online account for it. Class last location should be fine. But if it's a business that has different partners than other divisions, or it has its own EIN number, like I've got several restaurant owners that own multiple restaurants. They're totally separate from one another. You really want separate Quickbooks online accounts.
Got it. Thank you.
You also asked about a case study involving an MLM. So guess what that means? That means you get to be the case study for mlm yay for you. I don't have any business like that. But I need to know more. In order to get into that Gotcha. So who is in MLM that I can use as a case study?
Nobody does MLM. Okay, so let's make it a hypothetical MLM. How's that? One of the programs I know Lou refers people to is ACM. They have lots of different things that they offer. Health insurance being one of them. So let's use ACM for a minute.
I sign up for it, but I never use it.
So I've signed up for it. I have made purchases through it. But I haven't really promoted it yet. Do you guys or to anyone else? That's a good example. So it depends on how you're gonna run your business. If you're gonna make ACN a big part of your business, so you're not just gonna get $100 Check once a month kind of thing. Then it could make sense to have a completely separate division. That is your ACN business. It just depends on how you're gonna do it. It's active business income. It's not passive income, because it's network marketing. Now, in most network marketing companies, you're going to have a couple of different ways that you have income sometimes it's from people you refer making purchases. But there's also other times where the people you refer, then go out and refer other people. And I've had one CPA one time who told me that if it's your downline sales that are causing you to get paid, that that's passive, not active. Liz, would you agree with that? Yes. So the challenge becomes if you only get 110 99, from the network marketing company, how to figure out what part of that came from your own direct referrals versus your downline. That's trickier. And you may have to figure that out on your own with good bookkeeping. When your checks come in, or when there's a deposit comes in. Document what part came from what because that can really make a big difference when it comes to taxes. But it doesn't work any differently than anything else. Yes, set up a division. Use the divisional instructions that in the business just subfolder of the commands as folder. Decide whether or not you want to get a DBA for it and whether or not you need a separate EIN number for it. You don't have to have a separate EIN, and you don't have to do a DBA but you can if you want. Now, for most network marketing companies, they hate paying entities. They want to pay people so you're gonna have to argue with them a little bit, in many cases, to get them to agree to pay the division and its EIN number or the business trust cin number and not pay you. Other than that, it's very straightforward. But that's one the business side than the trusts. Does that help Lou? Yes, definitely. Thank you. I know where to start. Yep. And if you're using time Alliance, if you're going to set up a separate division to run your ACN business, I would contact Pam Alliance and have them open up a sub account for that division. They'll just make the bookkeeping that much easier. In that case, I think I have to set up a DBA not if it's done as a sub account, only if it's done as a completely separate account. Okay, but when you if I don't set up a DBA then I can just give it a name without but I still have to apply for DBA for my main trust, right. For your main interest. You would need it Yes.
Yeah, okay.
But if you're not getting a separate EIN number for it, you shouldn't need to do a separate fictitious name. But why would you? Okay, I do have this Subak sub account in the bank. Okay. Yep. All right. Thank you, and use the divisional certification of trust. Tell them that you want the name on the account to be the DBA Name and not the business just name. Given the way that the divisional certification of trust is worded. They shouldn't have a problem with that. Okay, and then people can just pay directly to the name of the division and not to the business just DBA the division. Now, yeah, I never knew I could open a sub account. That's good information. It's not a completely separate account. It's tied to the business. Trusts account. And when you have a sub account, you can even decide whether you want the money to sweep up to the business trust account. Yeah, do this with a Pay Pal account. I have several sub accounts and some sweep up to the parent some dope. Well, in this case, I can just do internal transfer, right? You can. You just want to have a way to track things separately. And it's easier to do with a sub account rather than a main account. Okay. That's good to know. Thank you.
Did I hear right? We need to have a DBA registered for the overall business trust.
Well, that's not a must. It's a can. But usually, in order to open a business bank account, not a personal bank account, they're gonna want to see that it's registered with the state in some way, shape or form. So as an example abundance group just it would file a fictitious name filing. And it would be abundance group trust, DBA abundance group trust, just that there's something on file with the Secretary of State's office in order to get a DUNS. Number, it will require you to also do that same fictitious name filing for the overall business trust. Otherwise, you can't build corporate credit for
it. Okay, and did you say without it, we cannot have a business account. Do you mean bank account?
A business bank account? Most banks won't open one without it.
That was prime prime alias we can
they open it as trust account? I can't remember whether they did it as a business account or a personal account. Honestly, does anybody here have a prime Alliance? Business account for a business trust and not done a fictitious name filing
I did.
Me too. It did. Okay. So and you're definitely it's a business account. Not a personal account, right.
I was gonna go get my paperwork. It's in the other room.
Me too. I just set it up last week.
It is a business account. Todd.
I'm I'm not positive. I was going to grab my paperwork as well
as look on the prime Alliance website. Let's see what I find that.
I have one through a local bank and I did have to do a DBA fictitious following.
But that's not the same as prime I really want to find it for primary
forms and disclosures. That's what I
need deposit account application for trusts?
Now what it doesn't tell you on the paperwork, whether it's going to be a personal or commercial account. Do you know
see is it says Keep it simple business checking.
Okay then it is a business checking. That's awesome. Okay, who said Gina? Oh, it was just me. I saw the paperwork in the ice trying to read read it to you get Okay, so let's keep it simple business account. And you probably don't need to do a DBA for Prime Alliance. But for sure you will not be able to get a DUNS. Number without a DBA has to be filed. And likewise, if you want separate corporate credit for each division, those also have to be filed as DBAs. I have one person that I know of who tells me they got separate corporate credit with just a fictitious name filing without needing a separate EIN number. But my reading of the Dun and Bradstreet website suggests that it needs to be a separate EIN number. I haven't personally tried to open corporate credit or open a DUNS number for a division only for the overall business trust.
What was been starting up to you is something that he didn't have to get the corporate credit or something.
Huh. Ben got a credit card in the name of his personal trust. When he gets here tonight, it's one of the things I want to ask him about while he's here is I think it's reporting against its fight his FICO and not against a Paydex score. Okay, Tisha, okay. But I do have really good news in that respect. There's a company out of South Carolina that uses private money lenders to fund hard money loans and syndication. And he's going to join us, I think, on the 20th which is a Friday because at least in the southeast from Virginia through Florida. They will lend to our trusts and nationwide for long term loans for real estate. He thinks he can get this to happen with the trust. So he he's going to join us to talk about both the private money opportunities to be a lender as well as the opportunity of getting real estate funding and they do everything from single family multifamily commercial. Sometimes they're actually partners in it. Sometimes they're not. He's got a bunch of different ways that it can happen. But with so many of us wanting to establish credit for real estate. I thought that might be a good contact to bring in and talk to us. Be here at the beginning of a call on the 20th I have my way. That's what I've asked them for. I also have someone coming in on Friday the 12th for about 20 minutes. He is the founder of a public charity. They are raising money for a new project. They're building a really cool facility here in my area and it's to help with both taking care of stray animals as well as educating people, whether it's educating veterinary tax, whether it's educating just individuals who want to know more about taking care of their pets. So really cool project, and he needs to raise $2 million for it. So it's a really good place for us to make a grant. So I thought I'd have him join us on the 12th only be here for 15 to 20 minutes.
The end of the 12th is a Thursday, the 13th Sorry, that's alright, just wanted to
I just keep forgetting it's Friday the 13th and I don't want to call it the Friday the 13th so I keep calling it this.
Okay, so I have a question. Go ahead. Like if I have a business I already and it already has established credit and I put it in the business trust that should that credit, the credit established should already be there. Right. So what is it the
trust Hold on? When you say put it in the business trust. You can't really put a current Entity into the business trust. You can tie the two things together depending upon how you want to do it. So one way of doing it is set up a new division. Have that division have a professional services agreement with the entity. So the money still comes into the entity 95% of the net after payroll and expenses then belongs to that division. So that's option one, option two set up a division, make that division the sole member of a Wyoming continuation LLC. So you take your existing entity and turn it into a Wyoming continuation LLC. Then once it's established you amend the operating agreement to name the division as the sole member. Done That way you keep the same EIN number is keep the same inception date it keep the same name. So if you already have corporate credit established for the entity, it doesn't change wild. It's exactly the same as what you had before. The only difference is net profit now gets paid to the division because it's the sole member. So that's a pretty great solution to keeping the existing corporate credit and still being able to have 100% tax mitigation on the income.
Yeah, that's my plan was Wyoming. I just haven't gotten everything done. But yeah,
thank you very much.
Yep. I do have someone working with that attorney. That I found recently. Her name is Jessica. I have someone working on for Wyoming continuation LLC is at the moment. He's moving LLCs that were originally established in Texas to Wyoming. They should be done by the end of this week. I will keep you guys posted on how that goes. Her prices are really reasonable. She'll do all of it for $399 plus the actual state fees. So you'll need a Certificate of Good Standing in the state that originally existed in sometimes there's a fee for that it's usually 30 to 50 bucks. Then you'll need the State filing fee in Wyoming which is 80 bucks when you file for the continuation LLC. So 399 bucks plus another 120 ish and It'll all get done for you. It's a very easy drop in the bucket to have somebody else do it because you're gonna need to have a registered agent in Wyoming anyway. And registered agents are usually two to 300 bucks anyway, so for an extra 100 bucks somebody else does all the legwork and takes care of it all.
I will definitely like her information when it's available.
Yep, I'll let you know after I find out how she does with this.
Great thank you.
She do them if you don't have a way of you don't have an existing LLC for continuation will she start up one from scratch in Wyoming?
I'm sure she will. I don't know what her fee would be.
Okay. And if she she becomes a Registered Agent,
she does and the registered agent fee is included in that 399 bucks.
What does she charge annually thereafter though they don't. I'm sure they do. They have to file again each year. In Wyoming.
There is a renewal fee. I think it's like 50 bucks and she charges 150 for the registered agent fee. Okay, so not bad at all.
Gina How about us folks in California Would that also works
if you're in California everyone California Randy it's still a good idea to move your LLCs to Wyoming rather than keeping them in California. Because if you keep them in California, you're still gonna get stuck paying stupid Franchise Tax Board.
Right California Franchise Tax Board. My understanding is though, even though we have a separate LLC now that we're originating our business out of they still have the tentacles to get us.
It depends on how it's done. Okay. So if you are the sole member of a Wyoming LLC, then yes, because you're a resident of California, they would be able to get their tentacles into you. But if you have a common law trust with a situs in these United States of America, the geographic region, not the country of the corporation and it is the sole member of a Wyoming LLC. What gives California right to do anything to it?
No. That sounds like a I gotta go to court to prove and get a ruling kind of situation.
Know that you could go to court and get a ruling until an issue arose. Right. I'll look into it further and make sure that there's some California case law on it.
Okay, because our plan is to collapse corporations as we roll our debt off, pay it off on because we have SBA loans you have to pay that off.
Not LLCs.
Not positive on that. Okay, so at the end of the name does it end in anchor does it end in LLC, LLC. Okay, at most then you have an S corp election.
No, we don't have that.
And it's just a straight LLC. Okay.
So if you want, you could send me over your SBA paperwork. Okay. As long as the entity itself continues with the same name, the same ein the same Inception dates. I looked at one a couple of weeks ago, and it's based on that loan and every loan is different. There was no issues with changing the sole member of the LLC. didn't cause any issues with the SBA. Send me over your loan paperwork on the SBA loans. Okay, take a look and see if that would create an issue. If it works the way this other one did. You don't even have to wait to pay off the loans to be able to do this. You could simply move it from California to Wyoming using a Wyoming continuation LLC. And once it's in Wyoming, then amend the operating agreement to name a division of the business just as its sole member. And I really do think that gets you away from California Franchise Tax Board.
That would be tremendous. Okay, I'll say that.
Let's look at your SBA loans first. All right, we'll
do Thank you. So
make sure you're welcome. Who else has questions about this? And I promise as soon as I have a positive outcome from this attorney, I will let all of you know who she is. It will be on the Webinars page.
Anybody else
do you think you'll know about Jessica by the end of this week? Is that what you said? Gina?
Yeah, Thursday or Friday is when to expect to have results from it.
Okay. I am very interested in on two aspects one, Wyoming LLC for my daughter's active income and one for a continuation LLC from our LLC in Illinois. Good idea and I think my daughter will need a personal trust in order to make this work as well Correct. With her active income,
yeah, she would. Yep. Okay, there's no other way around it.
So we need to talk about that. too.
That's easy. Just text me. Okay, I'll do the same thing we did for Kyle.
Okay. And then. Oh, you already you already know that you got my documents for you? Right?
Yes, correct. All right. Thanks. Yeah. Do those involve the business trust? Yes. Oh, well, if they involve the business trust, we can look at them right now. Is that okay?
Yeah, that's fine.
Let me make sure. Before I open my big mouth that they do not have identifying information on
it does have a ti n. Yeah. So
I just got to make sure I blocked setup.
Which email did you send it to? Both of
yours the DGG and your other one just because I want to blow up both your email inbox as well please do.
It's got to be there. Somewhere.
I sent it.
Got it. Got it. Okay, so, in your email, you say, I think this content works for both a decanted Land Trust and a brand new division. So is it the one that I created? Is that the one that you use to use?
So this is the affidavit of trust is Yeah, because I think we had some thought process that we might need to do something different with the affidavit if it was a decanter Choice versus a non decanter, meaning it's brand new. Yeah, I cannot find a reason to make a difference. Oh, I love you. Tell me otherwise in what's there.
Up this
meat just move it down. So nobody sees that part
are y'all talking about Cynthia did you send her all of your decanting paperwork
Well, it's not really camping. It's for purchasing a new property. That will be a division of the business trust. So it's not specifically for decanting. It's basically an affidavit of trust that would go on public record. Yes, the divisional certification. of trust and then the articles of formation.
So what I have now is the divisional certification of trust
that's fine. Did you notice what I put in yellow highlight I see.
So my Ruston and I know you don't want to hear it but I'm still on this land patent allodial title thing. So I'm trying to gear up or grab some more my documents that doesn't. The real estate is is not is not the real way to own the property. It's not real estate. If you're looking at the true context of land patents and a low deal title, so that's why I got that predecessor one that was just a typo. In your in your original
okay step
two, when you put it and it's improvements, that's like a house on it.
Correct? Correct. So when you when you talk about the land a land pan is just exactly that the land, right? So it's not necessarily you're not talking about the real estate, you're talking about the land with an improvement on it, whatever that may be. Could be a, you know trees. Right? Real Estate, it could be a piece of property it could be a structure. Yeah. But it's the improvement on it is why I use that term.
Okay, so and that's just all the divisional paperwork. So do you think anybody would have could go in and say, well, there's a house on there. And you didn't but you know, you're not including the house?
Well, if you looked at your property taxes, notice how they identify it on your property tax, they refer to as the land is taxed at one rate and the house or the structure called an improvement is taxed at a different so we got it so tax assessor's understand that differentiation. Absolutely.
That is not an issue at all.
Okay, what just asking?
Yeah, no good question, but that's where I'm taking it from. I've had enough property tax appeals with my local tax assessor's that I pay attention to the words they use.
Good, thank you.
So this yellow highlight that I assume said nor instead of not,
no, no it did. I just identified and highlighted because I wanted to drive home the point that it's have
dacha
No, sorry, I use I use my life for different reasons. I apologize. Yeah,
silly. Get me all confused. I don't
know. I'm sorry. So notice that the only interest over there was the personal trust.
I did. Yep, this looks fine.
Now what was which one document was that you pulled up?
That was divisional certification of trust. Oh, I thought that's what your first one was? You did first one was affidavit. Okay,
so wording wise, do you see anything that you would see that would cause a problem between using it for the candidate trust versus Hey, I'm hurt.
No. Okay. Looks totally fine for both. Okay, great.
I think that makes it simpler for everybody if we don't have to use a different affidavit. Yeah. The only reason I'm using that is because I don't want my divisional certification of trust on public record because that identifies the business trust and its beneficiaries
understood that
so my last one was the articles of formation
I'm just gonna
only thing I would change. That's a minor change in the articles of formation in paragraph one, F, property and assets, including land common improvements, and tangible intangible or intellectual property.
Just add the word improvements after land. Yeah, yep, you're right. I forgot that. I agree. Thank you. Oh, this was the wording there that I put in there because we weren't decanting it. This was originally to be camping. So I just changed the words that they asked for the purchase of land and it's approvement. Instead of properties, I just said land masses Should I not use that?
I'm just trying to decide on that
I would say land parcels okay. And improvements there on
land parcels and improvements there on. And that was in paragraph was that paragraph two?
Yes. And all other lawful business activities that should be fine. Okay. Yep, that looks good. You are all set. Okay,
at paragraph three do you think we should have put in you know how many units of class for example, a units instead of just 100%
Well, I did have units in your unit. Did you see that?
I did and the way that you specified it. You made it only able to issue Class B dash two units of beneficial interest. Yeah, I don't know that I would do that. I would have it issue a total number of units. But then I wouldn't specify what kind of units where you specify the kind of units is going to be in the operational rules or even in an addendum to the articles of formation. Because you have to show who those what the classes and how many units are issued to each interest holder. Ah, okay, this paragraph in paragraph three is really a paragraph that is designed to give you what the maximum number of units The Division is allowed to issue. So just like in an LLC is operating agreement is going to be allowed to issue up to a certain number of units. And usually, it's more than the number of units that are being designated based on a capital investment made by a member.
Gotcha. So I just tied it to the purchase price because that represents its basis.
Yes, I understand that. Okay. So what you can do here is initial capitalization and sources of capital. So leave it as the division is hereby authorized to issue a total number of I'd make it 3600 units of beneficial interest and just make it 3600 units. Okay, and then add a second paragraph underneath actually know in the second paragraph, the initial interest holders are the name the trust and then after it of Class B dash two units.
Actually, how would I say it?
I'd say 3563 units in parentheses with a face value of 285,000 slash ad dollars per unit close parentheses to faithful wisdom, trust by its trusty blah blah blah. And maybe up at the front if you're issuing 3853, class B dash two units with a value of
okay, I'm gonna have to rethink that wording. There I'm putting that in here. Can you bring the document back up? You're talking about paragraph three, same
paragraph, paragraph three. That's underneath that first paragraph. There is the initial interest holders are in three blank lines. Yes. So on those three black lines is where you show how many issues how many units were issued. To that interest holder. And what the value of it would be.
So basically what I have up there right after 3563, I change it to 3600 and take all that put it below it. Yep.
And below it, you're gonna say issue 3563 Class B dash two units of beneficial interest, come up with a value of 285,000 Slash $80 per unit, comma, two, and then the name of the trust come up by its trustee with the name of the trustee. Hopefully otter picks that up properly for you. Okay, I hope I help ah, let's go see if
How do you but this this is gonna look really stupid but I don't know how to get the otter
in chat. There is a link to it. Okay. And it will take you to the live transcription where Ah Oh, I see it here. It's asking me to sign in. It's making me sign in this time too. It's never done that before.
You just close it. Do I
just close it and it will just show up.
Oh, so basically ignore it. Oh. Oh. Just did mine. That's too funny
Okay, so I put a put what you should have it say in chat Cynthia. To make it easier.
Fix the capitalization and what I'm giving you but the wording I'll be right. Okay.
And I'll round it up to 3600 as you suggested,
no, for this paragraph. It needs to be exact. Okay. All right. It's for the first paragraph that you rounded up.
So down in where you identify the who it's issued to is why make it the exact correct there you go. Thank you.
Thank you. Yeah, that's it wouldn't have been able to do that without it. You'd have to go listen to the replay.
Desert Gina, all this article formation at the very end we have no notaries if the trustee of the division is the CO trustee of the business trust, we can just have one person there instead of a couple of people, right?
Depends on how you want to do it. So for a lot of loose students who have other people as trustees of the land trust when you go to do the articles of formation, it's not really appropriate to have that individual on the Articles of formation, because the articles of formation need to be done by a trustee of the overall business trusts. Who is also an it they can or cannot be divisional Trustees has to be a trustee of the overall business trust that signing on behalf of the business trust for creation of the division. So that other individual would not be there. And if you happen to be a trustee of the overall business trust, whether you're the initial trustee or a co trustee is irrelevant. And you're also going to be a divisional trustee for the division that you're creating the articles for. Then just show both titles, which is why on here it says business trust trustee and divisional trustee and you don't need any other signatures. You only need the one trustee of the overall business trust. And they don't have to be the person that's going to be the divisional trustee that could be somebody else. And the reason it can work that way is remember that all signatures in the business trust and the personal trust R and slash or so there's no requirement to have more than one business trust trustee create the articles of formation you only need one business just as the creating. So if you have two trustees in the overall business trust and in the division, business trust trustee number one is going to be a divisional trustee. You can have co trustee. Number two from the business just sign the articles of formation they don't have to be listed as a divisional trustee. Does that make sense?
Yeah, yeah. Um, so if I form a new division, cliff is a co trustee of the business trust and I want to just to have his name on the division. So I can just have him to sign a trustee and divisional trustee if that's a new division. Right? And I don't know. But if it's the canting from I will have say the another person as the Land Trust trustee already, when we form that division, for example, I can sign as trustee and a division or trustee, and then the nother person does that another person you'd assign as division trustee in this document?
Not possible because if you go to rulebook, the trust document itself, it will tell you that the only people that have the power to issue articles of formation are the business trust trustees, not divisional trustees. Divisional trustees get the power from the articles of formation.
Got that got that so when we do decanting the land trust in the formation there's no original land trust trustees name in it if they're not in a business trust. But where do
we No, no, no, no. Okay, they're not on the signature line of the articles of formation. But in the body of the articles of formation it should have a place and if I didn't do this, yeah, I'm write it as the names of the trustees.
Paragraph one C. Right. I'm looking at it. Okay.
That's where you name them in a whoever the divisional trustee is that's also a business trust trustee and any other trustees for the division.
I say so. If we did Kent from the Land Trust, the original land trust trustee has to be the one see? Correct. I got it. I appreciate it. Thank you.
And the divisional trustee that's also a business trust trustee has to be there as well. Sure, even though they weren't a co trustee in the original land trusts,
I got it but then can say Cliff who is a trustee, a co trustee of the business trust, can he be the trustee and I'd be the successor divisional trustee.
Sure. Okay.
So, Gina I did highlight that in the back of the formation of, I'm sorry, articles of formation in the place where the signature block is for the very first time you had just trustee and divisional trustee I clarified it by putting in business
I noticed that is that okay? Totally fine. Okay. Doesn't change the meaning one iota trustee and divisional trustee meant business trust trustee and divisional trustee.
Okay. I wasn't sure I was a little confused by that. So I did it for my own purposes of clarification.
Well, perfect.
All right. Thank you.
And if you want to do that, anybody else you're welcome to do that. You don't have to do that. But you can.
Awesome. Thank you very much. I hope this was helpful for others as well.
Yes, it was.
That's why I decided to do it on the call and not just send you an email. Okay. Thanks, Cynthia and Gina. You're welcome. Anybody else have documents you need me to review? Let's do it now.
This is Rita I do because I'm on the creation instructions. Number four it says convey the beneficial interests of the personal property trust on a bill sale to the personal trust and then number five personal trust conveys beneficial interest to the division on a bill of sale. And those are in the canting and
I don't know they're just regular old bill of sale.
But some of them say I mean some of the bill of sales that says that that says real estate say they in the wording you know that you you have permission to live there until so it's like your personal home. So I really couldn't find the one that are really needed to use. And I just don't want to use the wrong one and have to redo
commands conveyancing.
So that only happens on the bill of sale personal residence
or the other ones.
So the other ones down below it just says
Bill of Sale. Just the ordinary bill of sale. There's two of them
yeah they even have the exact same day but they're very different in size. Yeah, let's go see
oh, here's the difference. So in the one that's all capital letters in PDF format, there are two cellos. And there's a spot for a legal description of property in the one that is upper and lowercase characters, there's only one seller and it's just description of property, not legal description of property. But you'll notice that I also gave you a word version. So in the short version, if there's only one seller, great, it's perfect the way it is. If there's two sellers, great. Then copy the seller information and have a second seller information line. And if it's for real estate, change description of property to legal description of property. And then you're all good.
So to clarify, when you're moving it from your personal trust, if that's where originally it was, and you're decanting it to a vision division of your business trust you still needed to if you haven't done it, you still need to put the original bill of sale your quitclaim deed to the personal trust, make sure it's done. And then go through the process again to now move it from the personal trust to your division. Correct.
So you got most of that right except that you added and your quitclaim deed, quitclaim deed does not get done. It's the canting there's no deed needed. There's only two bills of sale required from the ultimate beneficiary of the land trust to the personal trust, then from the personal trust to the division of the business trust.
Right, okay. I'm sorry. Yeah, you wouldn't need a quitclaim deed to get to do the decanting part.
Correct. Okay, gotcha. So read it. If there's you and your husband, or both sellers. Then you're gonna use the one that's in all capital letters. If it's just an entity or just you, then you can use the one that's an upper and lowercase characters Bill of Sale one. Just depends on how many sellers there are.
And the seller is going to be the Personal Property Trust name.
Well, it's going to be whoever the ultimate beneficiary of the land trust is. Okay, so usually, that's not a personal property trust. The Personal Property Trust might have been named in land trust, but you may have a beneficiary of the land trust that's a personal property. Trust, then the personal property trust as a beneficiary. That's your living trust. The ultimate beneficiary of the land trust is not the Personal Property Trust. It's the living trust. Right? People the Personal Property Trust might have a beneficiary as the individual or it could be an LLC. Whatever the ultimate beneficiary is, is the starting point for these bills of sale.
And so on the business since we're transferring it, from the personal property, choose a personal try. Try so it's us basically selling it to us. I mean, right, conveying, so you're conveying your beneficial interest on a bill sale beneficiary
hold on who's the beneficiary of the Personal Property Trust.
That is John and I are living trust
your living trust, not you individually. Right. And your living trust is a revocable living trust with both of us beneficiaries. Yes. Then the ultimate beneficiaries are you and John? Correct. So in that case, you have to use either the one that's in all capital letters since there are two sellers or the Word document for Bill of Sale and just modify it but if you use the one that's the template, dash bill of sale all capital letters dot pdf, then John would be listed as seller number one, Ram reader would be listed as seller number two, my friend Mike Tucker, you're gonna have one little issue because it says paid in the form of a demand note. So this document works perfectly for you and John, to convey to the personal trust, because it's going to be paid in the form of a demand no. But the next piece is going from your personal trust to the business trust division. That one has a different bill of trust. That one I would use the word document. The reason I would use the word document is because it's not paid in the form of a demand note. It's paid in the form of units of beneficial interest and a basis account.
Oh, can you put that in the chat again?
Yes, so
if I can do it. Wow.
Okay. Bill of Sale to the vision change Darn it.
Hey. So, if you use the word document, you're going to change the words paid in the form of a demand note to instead read, paid in the form of Class B dash two units of beneficial interest and the basis account. Beautiful
because the personal trust can only have class B, right? Because as he does to you, right, right. That's I'm saying personal truth. We're talking
about divisions, divisions, issue Class B units, not Class A units. But for the personal trust, it can only receive Class B dash two or B dash three units. It cannot assume B dash one or B dash four units. Right.
Okay, so who can have be one?
An individual. So let's say you had a business partner and your business partner was a 50% partner. Your business partner doesn't have a personal trust doesn't want a personal trust. And they just want their interest in the business to be given to themselves individually. And they would also be able to manage the trust with you. You would give them B dash one units that have voting rights and management rights, but they aren't a trustee. Okay, in divisions is a big important piece guys in divisions. You cannot make an individual a trustee a divisional trustee and an interest holder in that division. The giant no no it'll turn that division into a grantor trust.
Can you repeat that part? Again, you can
in any one division. You cannot make an individual both a divisional trustee and an interest holder. Remember that there's two sides to the fence when it comes to trust when it comes to arch trust at least on one side of the fence are the trustees and the trust protectors on the other side of the fence are the beneficiaries. Same thing holds true on both the business trust and its divisions. On one side of the fence is a divisional trustees. On the other side of the fence is the interest holders. It can't have one single individual let's call him John Doe, be both a divisional trustee and an interest holder in that same division cannot do that.
So is it okay to list your your business trust name and your personal trust name in it as the interest holder?
You would never need the business trust as an interest holder in a division. You would only need the personal trust as the interest holder. That's totally fine.
Yeah, and like him, like in the baking team. So I had to put the original interest holder which was the personal property trust so I could get so I could remove them so I put them in even though I take them back out.
Yes. And take them back out you're gonna appoint new interest holders.
Yeah, I did. Yeah. Divisional trustee adds. Its personal trust is interest holder. Yes. Forms. Okay. I'm pretty sure. I think I've got all my paperwork right
in another word interest holder does not need to have any management voting rights.
No interest holder can be a B dash one interest holder would be that you interest holder b There's three or B dash four.
Right. I just tried to get my head wrapped around was that the interest holder being the person to trust 100% with the two unit so unlike Alright, so there's nobody in control many manage or voting but it's okay.
So, the management in that case when there's no b dash one interest holder, then management remains solely in the divisional trustees. Powers. Right. I got it. Thank you and that's what's unique about this trust that that's a very unique piece. Right in an LLC, management rights and voting rights happen to both the manager of the LLC and its members. If there's no classes of units defined in the operating agreement, right they both have management rights and voting rights. In the divisions of the business Trust, the trustees are tasked with management and if you have a B dash one interest holder, that B dash one interest holder can also have voting rights and management rights. So they work in conjunction with the trustees, even though they don't have any of the other trustees powers. Because divisional trustees have lots of power right so if you have a B dash one interest holder, they have voting rights and management rights but they are not a trustee. One of the things that individual cannot do is remove any other interest holders, because only divisional trustees can make that decision to do that.
Okay, the trustee can remove interest holders, yes, but not the neither Class A or Class B one interest holders
Correct. Well Class A one or Class A one is interest holders in the overall business trust and the only person that can remove a Class A one business trust. interest holder is the trust protector of the overall business trust but in a division class B dash one interest holders, they can be added any interest holder can be added or removed by any divisional trustee
and then positive that that's made clear in the overall business trust.
Yeah. And data Gina, you are going over the Bill of Sale earlier. The Bill of Sale has the personal residence personal property business property business property equals rental properties.
So business property is like in a dental office, the equipment, the chairs, the tools, etc. Okay if you're in the business of real estate investing, it could include real estate, but it doesn't have to.
Right. So if we use Land Trust, I mean, if there's property in the Land Trust, we use the capitalized bill. Of Sale and adapt that Right? Correct. Okay. Well, my question is, Just now you were going over Cynthia's document, the first document you go over, went over I couldn't find anywhere. It was the affidavit
of trust. The only place it exists, is if you go into the conveyances folder, the fact that I just do no no, no, tell me I didn't do that. Hang on. I just screwed up and closed something that I shouldn't have closed. Let's see if I can find it. Get back to it for me
Nope, I can't think
sorry, I accidentally deleted because my folder I may try and get back to that
no okay. So if you go back to the conveyances folder, then within the conveyances folder, go to the business trust folder. Then from in there go to the decanting of land trust folders in there you're going to see divisional affidavit of trust 2022
That's right. Wait, I'm in the decanting Land Trust and where do I go again?
In the decanting of land trust is called divisional affidavit of trust 2022.
Okay, yeah.
When do we use Academic when do we use certificate?
So, it depends for loose students. Who are fussy about privacy. Who don't want to show the name of the business trust or the name of the business trust trustees on public record. Then when you file your then you create an affidavit of deed I'm sorry, an affidavit of trust, to include as an attachment. If you're filing a new deed, some lose students, well actually file an amended deed just to amend the affidavit of trust that's on public record.
Do we have to file affidavits was the was the deed? I guess maybe I should ask Cynthia.
It depends. So if you're buying a new property and therefore the seller is someone completely different, unrelated to you, then the new deed should have an affidavit of trust as an exhibit. If you're decanting a land trust into a division of the business trust, then it's really up to you whether or not you want to update the affidavit of trust that's on public record. You should absolutely positively have something either a divisional certification of trust or an affidavit of trust that you create and execute and keep with your divisional paperwork. But you get a choice as to whether or not you want to update it on public record or not.
One of the things I found in my notes Emily from when we talked about your during the camping is that because most of the streetsmart people have an affidavit of land trust recorded Yeah, that has the word land in it, right. So talked about is creating the division with let's say it's called the XYZ Land Trust. But Land Trust was land was not part of the name in your original it just was called a land trust. What you could do is call it the XYZ land trust in your new Devitt division, digital trust right. So that it matches and you wouldn't have to necessarily go back and pay like in my case 60 bucks to record a stupid damn affidavit, when I've already got
1268 here right so yeah, but I never recorded affidavit trust, even for the land trust.
Okay, really?
Yeah, never.
So, so that can only become a problem. When you sell the property, and you can't produce this thing that was created back when you had the deed recorded, right. Oh, I guess there was a few back in the early day when I was being obnoxious and not following through to the letter that I didn't record the affidavit of trust because I was anal about people knowing about it right. So well, now I see the error in my ways. Could I have gotten around it? Probably because I did have the affidavit I just didn't record the thing. But the affidavit was dated and notarized the exact same date as the deed was.
So the problem that could ever happen is when we sell the property and you cannot find the document for the title company, correct without the
app, right. That's where you could run into trouble. Okay.
Yeah, I see what you're saying. But the title company here, I'm telling you, you can provide anything that was there, we just satisfy
it. We'll just just go back to the you can go you can go record the affidavit yourself. Like in my case, it's egregious to pay $60 for every single property I got
to do that's what I'm saying in Philadelphia is I want to record this to 260 Oh, that's just ridiculous. Yeah, so I think I'm not going to and also when we sell the property for the land trust, I mean, I create a line chart before I met Lou, so I had run like grants paperwork. So I just basically provide them the entire document of the trust and to satisfy them.
Oh, yeah, I wouldn't put that on public record.
Yeah, but no poverty record I just give it to a title company.
I don't get I don't give a that. I don't give anything more than a certificate of trust. If we're talking about the lead Chester business trust. Or if we're talking about grantor trust, they never got my declaration of trust. Nobody, even the title company or title attorney never got that.
Right. But you know, because it's this. It's a really bad Land Trust paperwork. I don't even care at that point. Just like here we go. Right. Yeah. Yeah.
Being in Pennsylvania. too. We've only ever when we do a closing provide the affidavit of trust. And yes, it does get recorded along with the change in name of the deed.
Right, change the name of a deed. I got that. Yeah, I mean, we'll do
that. Right. You take out the word land in your affidavit because of Pennsylvania.
No, they don't have a Trump nobody had any trouble with that. Okay. All of our closings were with it. They they saw obviously because we had to get the land trust notarized. They saw it. But we only gave them the affidavit of trust if they wanted anything beforehand. Right. And that's all they kept. Gotcha.
But on property records, you don't have the affidavit of trust on the property. Record.
Yeah, they do. They have the the name of the land trust, comma, who the trustee was.
That's on property record. Yes.
Right. And so the office, the the offices, the deed, the register's office, has the land trust in file.
The Affidavit of trusts on file not the land yes itself.
Yes, you're correct. I am sorry. I misspoke.
Right. I did I recorded into land trust in 2014 or 15. At that time, they didn't even ask me who the trustee is. And so on property record. There's only the land trust the land trust name without even the trustee I think is after truth on the 16th or something. They start asking for the trustees name to be recorded on the public record. So for me, I only have the land trust and nothing else knowing that no affidavit, no trustees name.
Well, if there's ever an issue with that property, right.
I understand.
It's gonna be an issue because I'm
gonna definitely record the affidavit trust.
So understand why you want to do that. Number one, to have just the name of the land trust with out the name of a trustee. I could walk into the recorders office and do something to transfer that deed to myself, or don't want to my entities, and nobody's gonna stop me because there's no name of a trustee to tell them that. I'm not the person that has the power. Right. That's a big problem. Like, I would fix that yesterday. If that's if you have properties that don't have the name of the trustee on public record. Fix them immediately. Cynthia, don't you agree?
Yeah, you're running a risk there and there is a
giant risk. There's people stealing properties, left and right. So that's problem number one. Now, I could walk in knowing that there's a name of a trustee, and I could end them paperwork that I created. That says, I'm the successor trustee and I'm now in power and without the affidavit of trust, there's no one that's gonna challenge that because there's no way for them to know the successor was right. That's another huge risk
in your area. Dr. Gene out there is someone who did just that and ended up with over I think it was $2 million worth of property.
Oh my god.
Yeah. So for me to fix it can it can it first, then just you know, do correction deed recursion with the affidavit trust? I want to declare it into the division first.
Yes, that's totally fine to do that. Okay. Thank you,
and make sure you specify the successor trustee as part of your affidavit. For example, He was just talking about the trustee but not the successor that can be dangerous just in the exact same reason genius just brought up.
Right. And Emily, it might be cheaper, because it's a Scriveners error. There Scrivener correction so maybe they will do it. As a different price.
Say they're going to do a correction deed.
If you do a correction deed and listing the correction deep that it's being filed to correct a Scriveners error. It's probably going to have a lower price and I agree with Kevin I think it does. I will let
you know. I will do it and let you know. It's okay for myself, the successor trustee right
away even if they charge you full price. 200 bucks is nothing compared to if they steal your property.
Yeah, true. In your case. If you've got either of those scenarios, no trustee or no successor trustee, it is well worth the 260 bucks per property to file it. I am so serious on that.
Okay, so okay, I can make Cliff the trustee myself the successor trustee for all of them.
Sure. Okay.
Again, strategy wise, we don't we don't put ourselves as trustees. Not streetsmart wise we don't
I don't have anybody I can trust. You
don't have to trust them. Normally. You know, people that will be your trustee and you can be there's just a lot the information.
There's a lot of us, Emily,
you guys got a whole group of you in Pennsylvania. You can be trustees for each other. I mean, a big group there's probably over 20 of you right, Diana?
Yes. Oh, yeah. In Pittsburgh, but Emily is on the other side of the state that will still we could still do it Emily.
Yeah, but my my understanding is this is a well protected. So it's a different you know, it's a different divisions name with my name. So I just, I can say I'm a professional trustee. And nothing to do with me. That's my understanding. So for land trusts, I understand we need different people to be the trustee my understanding for personal trust and this type of trust we don't need
right you got to be careful because of your license unless you want to lose your real estate license or any other fiduciary license and that's tied to the Pennsylvania. You want to be careful about what you just said.
How does it relate it to my license? My realtor license
because you basically what you just said, professional trustee, you're now a fiduciary?
Yeah, but I definitely can be fiduciary with my realtor license
only circumstances defined by state law. So you got to be careful and getting out as you just want to be careful. And that's why, you know, Dr. Jain is sort of putting certain parameters out there, you know, because we're going to do we have free will, we're going to do what we want to do, but I'm just saying you just want to be careful because there's risk.
Part of the reason why we create different names for divisions of the trust, just like we did for Land Trust was so that it can't be traced was just as easy to start tracing people by name. How many different places does Emily show up as a trustee? Ooh, I bet you they're related. Ooh, let's go after her.
Or even sucks. I don't know, Steve, for that matter. Yep.
But I don't have anything. Why do you go after me?
They don't know that to begin with. So then you're in a defense mode rather than offense. What we're talking about as an offensive move. Not go after her and now you got to prove it's not anything to do with you or that you don't have anything. What we're doing is offensively now not putting you out there anywhere. There is a difference.
Emily, you This is Rita you might see how thing how people search your the records, the county records and see how they file at trustees because if they file trustees names first, then they can see every property that you're tied to. If they if they do the the name of the property, you know that you have it in and then by you know, then such and such as trustee, they're not as likely to find all the properties that you have even though with the new personal trust, you know, our risk or not, is is like they were when it was just a land trust. But that's how I kind of looked at ours is because I don't mind my name being out on there, as long as they're recording the name of the trust, you know, trust first and then by you know, so and so as trustee. I don't have a problem with having a couple on there. But if you have all your properties listed under your your personal trust, then your your name is out beside everything and they know they know how to you know they they just have a way to track you down.
I do understand it, but I doubted you and I really want to hear you saying is but I mean I mean my understanding is I don't need to worry about it because the type of trust but I also understand what other people are talking about. I do
Totally agree. I mean, it really is ironclad asset protection, but it still creates a target on your back when your name is all over public record. The more properties you have, the more you have a target on your back. And not that they're going to be able to pierce to get assets held in the trust. But why have to go through the hassle just because your name was on public record? I understand. Yeah. That's all everyone's saying. I think. Yeah.
Yeah. Hang on one second. Hold on one second. And nothing says you can't go find somebody else that you can put into power for just the purpose of doing the recording of the affidavit and the correction deed. And then five minutes later, remove them. They don't have to stay there forever. Right.
I mean, that was that was in the paperwork that Louis supplied us because they signed me you could get rid of them as fast as you put them in the public record but you you had that ability because of the paperwork that was in all of loose paperwork to be able to do that.
Okay, now I'll take any question. Go ahead. Was that Leanne? It was Rita, Rita Go ahead.
Under the conveniences under the decamping the operational rural side do not use
still don't have the operational roles finished because I've been working on the new chest. I apologize. I'll come back to it. Soon as the new trust and the demand note system are complete. I will go back to the operational roles. I thought about assigning that task to one of the new attorneys. But I don't know that they're familiar enough with our trusts to actually do it. So I just gotta get back to it.
We like you doing it Gina. We trust you.
Thank you. And I really want to shorten it there's so much gobbly gook in it because it came from an operating agreement. I don't think we need all of that. Especially not in an operational roles for decanting of land trusts or personal property trusts. I think we can shorten that a lot.
That would be great. It's like 37 pages.
I know it's it's ridiculous. And it doesn't need to be there. It really is meant to have operational rules that are meaningful. And when I say that, I'm not talking about legal jargon to give it or legal status. I'm talking about how you actually operate your business, which is not legalese at all. It's like an Operations Manual, right. And that part of it, I really can't write for you. But I can give you some paragraph headings with some blank lines so that you can put it in there for yourself. So I'm going to take out a lot of the legal gobbledygook that's more for an operating agreement than for operational rules. And give you some guidance with section headings and blank lines that you can either leave in and fill in or take out because to me, an Operations Manual is way more important than the legal gobbledygook that's in an operating agreement. Okay, any other questions?
Sorry, I was on mute. I got a quick one that's not related to the business just but it's a status update. I may have missed it. I'm sorry if I did, crummy provision in the personal trust.
Yeah, that's what I'm working on. I'm working on the updated personal trust and the updated demand notes.
Okay. Perfect revision as part of that update.
Yes. Okay. That's the whole reason I was doing the update in the first place. Right. And I gotta tell you, all clients knew that that's what I've been working on the last few weeks. And I had so many people, the week before Christmas, reached out insisting that they had to talk to me before the year end. That between the people that insisted on it, and all the texts that I got last week, I was quite disappointed in all of you. This update of the trust is really important. It's important for all of you to get it. And yet everybody bombarded me so much. I didn't get more than 30 minutes of uninterrupted time, any day in the last few weeks. So I apologize, but it's it's kind of the group's fault as a whole. Anyway, and I also apologize that there's still probably over 40 people that I couldn't get into calls last week that so many people reached out wanting to do urine calls. Guys, you can't do that to me. Again at the end of 20 through it all. It will not be good. Anyway, so what did I want to tell you at the end of this call? There are two more business trust trainings I want to do one more is a case study day, but it is more for active business income. So Cynthia, one of the things I want to do is an information business. So let's use your coaching business. As the example if that's okay with you.
All right, I was on mute. Yeah, do you need something from me?
No. Okay. Just need for you to be here to interact with me as we go through it. And then the other one I want to do would be either a restaurant, chiropractor, a dentist, someone that has active business income, it's more of a traditional brick and mortar style business. So if anyone has any suggestions on who we could get here to help me do that would be great. So we're gonna do that next week. And then the week after, provided I can get Dave Phillips to join me. I want to do a business trust bookkeeping call in greater detail, more of a case study than anything else, like, Okay, how do you do this? How do you do that? Because we already went through that what the Chart of Accounts looks like, but more of a case study. On the accounting side of things Blaze will help and Dave will be here too. So there will be two more business trust training calls that we do. And then when I get done with all of those, then I'm gonna take one week off, and then we're gonna come back and we're going to redo almost all of the regular personal trust training podcast. We already have the updated trust walkthrough so I don't need to do that call. But we'll pick up right after that. And we're going to redo all the rest of the trainings. Because I've had a number of people bring to my attention that if you look at the regular personal trust training podcast, it's silly because every time I show a screen and it has the trust in it, it's not the trust that we're talking about. And it's confusing people. So I'm gonna fix that. Plus, the accounting parts need to be updated because we've learned so much in the last three years since I did the original ones. So that's what's coming up for our Tuesday calls. This Friday. There will be no call because Ben and I will be in Tampa, interviewing hotels to find the one that we're going to hold our live event at. So no call on Friday, but we will be here tomorrow. Other than that, I think I am good.
Thank you. emails when you cancel too. I appreciate that the updated when you say that we're canceling for that day, that helps a lot.
Good. And shall we will do that again for Friday's call.
Okay, so you need me to be on online for next Tuesday. Correct? Yes, please. Thank you.
Okay, guys, have a great rest of your day. And I will see you guys tomorrow. Do Happy New Year. Happy New Year. Everybody.
