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Wealth.Lawyer™ | Wealth.Attorney™
1-877-Win-4-You™ | info@Wealth.Attorney ™
Expert California Attorney, Over 33 Years Experience;
Rated 10 out of 10, Superb, Most Honored Attorney Award
Law, Living Trust, Small Business Protections Library Resources, Blog and Estate & Asset Protection Videos
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Educational Living Trust Legal Resources by Expert California Attorney Rich Rydstrom
Topics: Living Trusts, Trustees, Beneficiaries, Filing out Living Trust Choices
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The Peace of Mind Roadmap™ - Living Trusts
By Rich Rydstrom, Esq. 1-877-WIN-4-YOU Join Free Living Trust Club Link
TOPIC: LIVING TRUSTS and related documents
Reference: The 13 Secrets of the Rich or Informed! ™ Article and Video Series re Living Trusts. Answer a
few questions and fill out the blanks to start your analysis on a path to Peace of Mind through use of a
Living Trust and related documents. This is a non-exhaustive exercise to help you gather an
understanding of the basic issues, options and choices you might consider when talking with an attorney
for estate planning and use of the Living Trust. This is not an exhaustive intake questionnaire.
PRIAVTE AND CONFIDENTIAL
Preliminary Questions:
Section 1 - Items YES OR
NO:
Why or Why Not?
1. Do you want to AVOID Court
Probate and its expenses, costs,
risks and delays to the extent
possible?
2. Do you want to use Court
Probate?
3. Do you want to AVOID the RISKS
of your family having to SELL
your home or other property to
pay off debts in Court Probate?
4. Do you want to use a LIVING
TRUST as a device to AVOID
Court Probate?
5. Do you want to Pre-Define the
many life contingencies and
issues including how to handle
your property and health
matters during incapacity, or at
death?
6. Do you prefer to have an
attorney handle these matters
by consultation and drafting of
the Living Trust and related
documents?
7. Do you understand that the
California Statutory WILL
requires Court Probate and does
NOT contain a NO CONTEST
CLAUSE to lessen lawsuits or
attacks on the estate and
property?
Section 2 - Items
Who might you nominate or appoint
to these positions in your estate
plan?
Notes: Why or Why Not?
1. Trustee 1 Spouse 1
2. Trustee 2 Spouse 2
IF Trustee 1 and 2 are not available to
act:
3. Alternative Trustee 1 Alone or as CoAlternative
Trustee
4. Alternative Trustee 2 Alone or as CoAlternative
Trustee
5. Alternative Trustee 3
(Corporate Trustee, such as
First American Title, or Bank
of America, or WFB, etc.)
Alone or as CoAlternative
Trustee
Beneficiaries to receive your
property:
6. Bene 1
7. Bene 2
8. Bene 3
9. Bene 4
Contingent Beneficiaries to receive
your property in the event NONE of
your Beneficiaries above are available
to take.
1. CBene 1
2. CBene 2
3. CBene 3
4. CBene 4 – Charity Legal IRS
Registered
Charity Name
Nomination of Guardians of your
Minor Children:
(Same as
Alternative
Trustees (1 and
or 2) named
above in priority
order)
5.
6.
Attorney in Fact (“AIF”)
Appointments for Trustors/Makers of
Trust
(Alternative
Trustees 1, 2)
Attorney in Fact (“AIF”) for HEALTH
CARE
(Alternative
Trustees 1, 2)
7.
8.
Attorney in Fact (“AIF”) for ASSET
MANAGEMENT
(Alternative
Trustees 1, 2)
9.
10.
OTHER NOTES:
Peace of Mind Link
Video Living Trusts Easy as 1,2,3 YoutubeLink
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The 13 Secrets of the Rich or Informed™
Step-By-Step Blueprint Edition
Living Trusts, Plus! @WealthAttorney Youtube Channel Link
By Rich Rydstrom, Esq. (California Attorney, 33 Years’ Experience)
1-877-Win-4-You ™ | Info@Wealth.Attorney ™
Enjoy My Blueprint to Wealth Protection Entitled: "The 13 Secrets of The Rich or
Informed", the Blueprint Edition.
13 Secrets of the Rich or Informed Text
Education Resources by Expert Attorney Richard Rydstrom
Estate, Business and Asset Protection Guide: Link
I first wrote this article as my personal cheat sheet when I was working as a Beverly Hills
Celebrity Business Manager for some of the most famous or informed people in the
country. This article grew and grew over the years and now it covers the common and
the special devices used in California Estate, Business, Asset, Litigation and Retirement
Protections.
This is a non-exhaustive list of devices, and not intended as legal or tax advice. I believe
that there is a great value in working with an actual attorney and other professionals, as
a Big Team, over any online sales system for many reasons. One, online state default
forms do NOT include all options to define your unique disposition plan, and do NOT
allow protections from litigation or contest protections. (See Will vs. Living Trust)
When discussing these planning matters the following devices and alternatives should
be discussed with your attorney, wealth building and protection team. This list is a nonexhaustive list and only given as a tool to afford easier discussions with your
professional team. Your first step in the right direction is to put together a team, which
should include an estate, business and asset protection attorney, CPA, insurance agent
(re life, disability, buy-sell, long term care, business interruption or income
replacement, etc.), CFP (Certified Financial Planner), money manager or investment
advisor and a brokerage. This article is not intended as legal, tax, accounting, financial,
money management or insurance advice, and as such you may not rely upon same for
that purpose. It is recommended that you hire an attorney experienced in this area to
plan your business, estate, and protection matters.
I help protect family wealth without fear & anxiety so you can achieve peace of mind!
Does peace of mind sound like your objective? Peace of mind, by leaving nothing for
chance is certainty, not uncertainty, and that is the ultimate goal:
• Peace of mind in pre-arranging your family and asset disposition affairs.
• Peace of mind in protecting your financial affairs.
• Peace of mind in protecting your wealth.
You can name many more, but you get the idea.
13 Most Common Business and Estate Protection Planning Tools or
Devices!
1. Revocable Living Trust (or Living Trust). The public knows this device as a
Living Trust. The Living Trust is most often used to avoid Probate, its costs and
delays. In tax circles it is called the Section 671 Trust or disregarded tax entity
trust. It is generally a tax-neutral device. However, you may use this trust to
invoke maximum estate tax exclusions for the husband and wife, and to add nocontest clause to protect against some third-party challenges, but because its
revocable, the Living Trust is not an asset protection device, until the death of the
first spouse and the creation or funding of that trust as Irrevocable. With proper
business and estate protection planning, the living trust is commonly used to
hold 'select' property and all of your (personal) property "interests".
In larger estates, it is often advisable to put certain assets in various other devices
(e.g., LLC, Children's Trusts, Life Insurance Trust, C or S Corporations, Private
Retirement Trust, IDIT, Pensions, etc.) for asset and risk protection, as well as for
tax reduction reasons. Interests assigned into certain other devices may be
assigned to the Living Trust. Contrary to myth, generally it is not intended as an
asset protection safeguard, at least during life (while it is revocable). Assets held
in your living trust are not protected from the reach of creditors. (Ca. Prob. Code,
Sections 18200, 15304 (a), 15304 (b)). However, you can achieve some measure
of property "characterization" protection (as separate or community property
agreements, etc.) if the husband and wife maintain separate living trusts with
property agreements.
Most persons commonly use the living trust in business and estate protection
planning as a central planning device or quarterback. It is part of most business
and estate protection plans, as it can avoid probate and act as the directing
authority for all or most of your property disposition plans, including certain
investments. Although certain investment accounts are considered "POD"
accounts may avoid probate (or "payable on demand" accounts), you should
coordinate PODs consistently with your estate, business and retirement plans,
which includes your Living Trust. For some estates, this device alone is not
sufficient as a business, estate and asset protection planning solution. To have
maximum effectiveness, it should be used with one or more of the other devices
or techniques mentioned hereinbelow.
2. Pour-Over Wills. This device is used in conjunction with your Living Trust. It
directs property disposition to the Living Trust to avoid probate. It is intended to
be a "catch-all" over property left out of your Living Trust for one reason or
another. Each client will generally use one Pour-Over Will.
3. California Advanced Health Care Directive (Durable Power of
Attorney). This document is used primarily to direct your attorney-in-fact on
how you wish to be cared for in the event of certain illnesses, incapacity, or
disability. It is like the so-called Living Will. Different states have varying rules
on such device(s). Protect Wealth with Simplicity YoutubeLink
4. Durable Power of Attorney for Asset Management. This document is
used primarily to direct your attorney-in-fact on how to manage, run, control, or
dispose of your assets (or certain assets) in the event of certain illnesses,
incapacity, or disability. In the event of disability, this document is critical. It will
allow you to direct the person(s) of your choice in making business decisions over
certain real or personal property (and businesses). It can be very effective for
small and family businesses, and landlords (rental properties). For example, per
your direction, it could allow for the refinance or sale of real estate.
5. Family Limited Partnership (FLP). This is a very popular business and
estate planning instrument (especially before the LLC) used for many purposes,
some of which include asset protection, favorable pass-thru taxation, ability to
control transferred property (as managing member or per the LLC), reducing
estate or income taxes, life insurance ownership, and fractional gifting with use of
beneficial "discounts". Charging Order - The family limited partnership will
protect its assets from partner creditors. It has the power of the favorable asset
protection charging order laws. (Ca.Corp.C 15522, 15673; Fla. Stat. 620.22;
Ariz.Rev.Stat.Ann. 29-341; Nev. Rev. Stat. 88.535; NY Partnership Law 111
McKinney; Tex, Code Ann art. 6132a-1 7.03, etc.). However, be aware, in
California, effective January 1, 2003 the law changed to allow "foreclosure" of
interests. This is a dangerous change and a blow to the asset protection feature of
the charging order. Normally a charging order is the exclusive remedy and will
only allow the creditor to obtain certain distributions from the entity, if any, and
not the assets. However, in such cases, generally the creditor would receive a
taxable event (RevRule 77-137) upon the issuance of a charging order (as
constructive income), even if he/she receives no cash or property. This could be a
powerful settlement device. It appears that one should consider opening an FLP
(or LLC) in a state that does not allow "foreclosure", like Wyoming or Nevada,
and then qualify to do business in their own state.
6. Irrevocable Life Insurance Trust (ILIT). Contrary to common myth, life
insurance is generally taxable at your death (as it is included in your estate
valuation). However, life insurance originated or placed into an irrevocable life
insurance trust, is generally not taxable to the deceased estate. The irrevocable
life insurance trust is generally non amendable and often used to hold and receive
life insurance which removes the value of it from the settlor’s estate for estate tax
purposes. There are strict rules of compliance and exceptions.
7. Children's Trust. Although a creature of many forms, usually it is couched in
IRC 2503 (b) or (c). Generally, it is an irrevocable trust used to hold property for
the benefit of your children. Parents may gift or sell assets to the children's trust
and lease or loan certain assets back. This device does carry a high measure of
estate and asset protection from creditors. It can also reduce estate and income
taxes.
8. Charitable Remainder Trust (CRT). This irrevocable trust is usually used to
receive and hold property for the purpose of making charitable gifts, supplying
income from such assets for life, achieving current charitable donations, or
reducing capital gains tax. It requires the making of a "complete" charitable gift.
It may also be used in conjunction with your estate plan including a family
Foundation (which are no longer recommended), or "your" own charity. In the
most basic sense, your property is transferred to the trust, and the trust sells the
property, deferring certain taxes. The trust then invests the sale proceeds, and
you receive an income and/or principal payout therefrom (depending upon the
device, and factors including the term of the trust and your life expectancy). The
trust monies (or res) are protected from most outside liability attacks. Life
insurance must also be seriously considered for wealth replacement and also as a
wealth creator. Life insurance is effectively used in a CRT to replace any so-called
"gift", and often times results in an increase in wealth for your heirs. See you
attorney, and life insurance specialists before acting upon such a plan. Also
consider a CLT (Charitable Lead Trust).
9. Limited Liability Company (LLC). An LLC is a creature of state statute. It
varies from state to state. It most often takes the form of a limited partnership for
purposes of liability, accounting and taxation. Certain LLC¶s can elect to be taxed
as corporations. Most clients will desire the form of a "limited partnership" (not a
"corporation"), especially if residential or commercial rental properties or other
capital assets are to be held or owned by the LLC.
10. Will. Two words: Warning, PROBATE! The old-faithful estate planning tool, the
Will, is often times not the appropriate estate planning choice in modern times.
With modern business or estate planning, the Revocable Living Trust (with a
Pour-Over-Will) is often the best choice. The historical Will is possibly the
simplest document to implement, however, it does not avoid Court Probate. The
Will may cost your family great Probate expense (2-10% more or less, of the gross
value), delay and court battles (with Will challenges and lawsuits). However, the
marital deduction provisions often used in Revocable Living Trust may also be
used in the Will, but probate, its delay and costs will not be avoided by doing so.
Note online default state Will forms do not offer full protections: the California
Statutory Will does NOT include a NO CONTEST CLAUSE, which may lessen
LAWSUITS or fights from third parties against the beneficiaries, because it
automatically DISINHERITS that attacker.
11. The Corporation: "C" Corporation. The "C" corporation is often the best
entity for front line business operations that can afford maximum tax write-offs
(however, the SubChapter S is getting closer, year after year). Corporations are
often used to operate a business with limited liability, and to divide up your
business activities for creditor and lawsuit protection reasons. It is often
beneficial to segment your "risky" business activity (or assets) from your "safer"
activity (or assets), or to have certain corporation(s) act as partner(s) to other
devices. The "C" or "S" corporation may be used to as your front-line business
entity, which in this day and age, is expected to be sued. "S" Corporation. Like
the "C", the "S" is often used to achieve the same level of limited liability
protection, but with less fringe benefit tax deductions. However, the "S" comes
with pass-through taxation, which is often advantageous to many clients who
expect (some) losses in the first years of operation or use the "S" with other
devices named herein, etcetera. The tax attributes of income, deduction, credit
and loss are passed through to the shareholders personal tax return. The "S"
corporation does have several limitations that you must be aware of, including
but not limited to (a) limited loss deductions when debt is in excess of basis, (b)
the lack of increase in basis due to entity level debt (whereas the LLC and FLP
(LP) does not have such limitations), etc. For example, for basis reasons, an S
owner should consider getting a loan personally (not the S itself) as opposed to
the LLC (or FLP) which can have the entity itself get the loan and benefit from
that increase in basis adjustment.
12. The Business or Land Trust. The business trust is often used as an alternative
to the other business devices to operate a business and add a level of privacy and
potential creditor protection; or used to hold rental real estate. The trustee may
be a person not owning the beneficial interests therein. Often family members
may be effective holders of the generally "private" beneficial interests of the
business trust. Warning - the beneficial interests may be attachable by creditors.
13. Advanced Devices: Other Devices or Secrets. Other devices used include the
Grantor Retained Annuity Trust (GRAT, GRUT, GRIT), Qualified Personal
Residence Trust (QPRT), Self-Canceling Installment Note (SCIN), Private
Retirement Trust (PRT), selling to a Intentionally Defective Irrevocable Trust
(IDIT), SOs, Pools, 1031 exchanges, 1031- TICs, Cost Segregation Depreciation on
Real Estate, etc. Converting Non-Exempt Assets to Exempt Assets. In
addition to homestead exemptions which have limited but effective value, one of
the most powerful asset protection methods is converting the non-exempt assets
to exempt status. This can be done is various ways including by trusts, pensions
and (marital or separate) property or transmutation agreements. For example: a.
Private Retirement Trust (PRT). The PRT is one of the most powerful devices
used to enhance an estate and business plan which protects the wealth, equity or
assets transferred into this irrevocable trust for purposes of retirement. The
authority of such a trust is a create of local state statute, which varies state to
state. For example, in California, under its Code of Civil Procedure Section
704.115(b), all amounts held, controlled, or even distributed by a private
retirement plan are exempt. This means that you could even transfer certain
assets to a PRT during litigation or after a judgment. The term private retirement
plan´ is not defined in the state code however, typically, the retirement plan
would be sponsored by an employer (LLC), in writing pursuant to an actuarial
calculation based upon numerous retirement factors including age. All amounts
held, controlled, or in process of distribution by a private retirement plan, for
the payment of benefits as an annuity, pension, retirement allowance, disability
payment, or death benefit from a private retirement plan are exempt. This
differs greatly from other exemption codes in California such as California Codes
Code Of Civil Procedure Section 704.010-704.210. or the Individual Retirement
Accounts (IRAs). IRAs are not fully protected under the asset protection laws
found in federal ERISA protections. However, some states have enacted special
but restrictive protections of IRA plans protecting the funds and distributions
only to the extent necessary for the support of the debtor, his/her spouse and
dependents. Qualified ERISA Plans. ERISA (Employee Retirement Income
Security Act of 1974) supplies very effective asset protection over pension funds.
The federal law overrides state law to the contrary and protects 401k, profit
sharing and pension plans that prohibit involuntary assignment of plan benefits
to any creditors. Assets may be transferred into such a plan with known creditors,
lawsuits or judgments. However, ERISA will not protect such assets from the IRS
or subject to court order in divorce court (Qualified Domestic Relations Order).
ERISA plans protect employees not owner-only plan participants. If the plan¶s
only participants are the owner and his family (spouse or dependents), then
ERISA will not apply to protect the funds.
WARNING: LEGAL NOTICE: IRS CIRCULAR 230 DISCLOSURE NOTICE: To ensure
compliance with IRS requirements, we inform you that any U.S. federal tax advice
contained in this communication is not intended or written to be used, and cannot be
used by any taxpayer, for the purposes of (i) avoiding penalties under the Internal
Revenue Code or (ii) promoting, marketing or recommending to another party any
transaction or matter addressed herein. Any legal advice expressed in this message is
being delivered to you solely for your use in connection with the matters addressed
herein and may not be relied upon by any other person or entity or used for any other
purpose without our prior written consent.
All Rights Reserved in trademark and copyright. © 2022 Rich Rydstrom By Rich
Rydstrom, Esq. (California Attorney) 1-877-Win-4-You ™ | Info@Wealth.Attorney ™
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FAQ Living Trusts California expert attorney Rich Rydstrom LINK Common Questions Answers re California estate planning and living trusts: Rich or Informed VIP Club: https://ikiabiz.com/ondemand13secrets
Rich Rydstrom, Esq. Wealth.Attorney Common Objections – Living Trusts
FAQs Objections Responses Attachment 3
What’s the primary benefits of a Living Trust: It is PRIVATE not public, and it generally avoids court
probate, its delays, costs, expenses, and attorney fees. It acts to pre-define how to handle the
contingencies in your life over the PERSON and ASSETS for you and your family.
1. Can I Act as My Own Trustee?
Generally, for Revocable (Living Trusts), the answer is Yes. Usually, married couples each serve as CoTrustees. As to trustees or beneficiaries, they may reside anywhere even if not the same state.
Generally, for Irrevocable Trusts, the answer is No.
2. Is it expensive to transfer assets into my Living Trust?
Generally, No. With the Living Trust package, we include an Exhibit A, wherein you list all the assets that
you are transferring or assigning into our Living Trust. There are some items like real estate that
normally use a Deed of Assignment to transfer. However, we also have an option to use a Live Transfer
Exhibit “A”, which uses the key language in Exhibit “A” to make the transfer, prior to the actual deed
recordation. This will allow you to record the deed at a later time but have proof of actual transfer at the
time of the making of the Living Trust. Of course, to get certain benefits of recordation the deed will
need to be recorded.
3. Will I have access to my bank accounts and property in my Living Trusts?
Generally, for Revocable (Living Trusts), the answer is Yes. The trustees (you and or your spouse) control
or manage the assets in the Living Trust. The trustees can withdraw, deposit, invest, lien, encumber,
mortgage, and manage the assets in the Living Trust. Title to the assets change from your names to Your
Names as Trustees for the Living Trust. Remember, revocable trusts may be changed or altered any time
prior to the death of the first spouse.
Generally, for Irrevocable Trusts, the answer is NO, but YES to the extent of discretionary provisions, or
as expressly enunciated in the trust. Independent trustees manage the assets in the Irrevocable trusts.
For irrevocable trusts to achieve asset protections, Control must be in independent trustees. However,
that doesn’t mean your assets transferred therein can no longer benefit you or your family. Those
instructions must be structured in the trust.
4. Does my Living Trust also contain Durable Powers for Asset Management and a Health Care
Directive (“Power Nominations”)?
Yes, the Living Trust and the Power Nominations pre-define who will have the authority to handle you’re
the affairs of the Person and your Assets, in the events of incapacity (disabled) and eventually death.
These and additional related documents, also pre-define same for your Children.
5. Can I buy and sell assets without the help of an attorney?
Yes, you do NOT need to consult an Attorney or obtain special forms. Any FORMS for certain types
of assets are contained in the Living Trust Package for you to use over and over again. Also, the
package will include a Legal Instructions document wherein you can refer to the type of asset or
issue and read the explanation.
6. Do I have to RECORD or FILE my Living Trust Publicly?
No. The Living Trust is a PRIVATE and CONFIDENTIAL document. You are also NOT required to send it to
a bank or other party for any reason. The Law in California makes it a crime for others not to accept a
CERTIFICATION OF TRUST (or key summary) for ALL-PURPOSES. The Certification of Trust will come with
your Living Trust Package.
7. Can I transfer real estate from other states into my Living Trust?
The answer is YES. You transfer TITLE or Assign Ownership or Profits Interests into your Living Trust
as you would to avoid probate.
8. Can I transfer CORPORATE STOCK or LLC ownership into my Living Trust?
The answer is YES. You transfer TITLE or Assignments of Stock or Ownership or Profits Interests into your
Living Trust as you would to avoid probate.
9. Can my spouse and I transfer Community and Separate Property into our Living Trust?
The answer is Yes. You can also transmute or change the character of separate and community property
by designation in the Schedule “A” and or by adding property agreements. Note also, that all of your
assets not otherwise designated as Payable in Death or held by other trusts wholly, may be transferred
into your Living Trust.
10. In the event you move, your living trust is valid in all 50 states.
11. The Living Trust is generally a TAX-NEUTRAL device and does not change the taxation of items.
Personal Tax Returns will be handled the same way as if you didn’t have a Living Trust. They are
considered a disregarded tax entity. Of course, for estate taxes, the Living Trust can seek to
maximize exclusions and exemptions.
https://www.youtube.com/channel/UC06f9OgUwjibb_ZSOEJF4Ag
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Welcome to the 13 Secrets of the Rich or Informed™ Advanced Video 2.
Protections for Business Owners, Entities, Trusts and Devices. 33-Year Protection Attorney Video Link
By Expert Estate, Business and Asset Protection Attorney Rich Rydstrom
Welcome to the 13 Secrets of the Rich or Informed™ Advanced Video 2.
Protections for Business Owners, Entities, Trusts and Devices.
You work hard to make your business work for you. But Business owners are susceptible to many risks. Sales risks, product risks, regulation risks, tax risks, lawsuit risks, and many other risks, many of which may very well threaten your survival. We must know how to lessen or contain the risks and protect the business and profits as a going-concern. Specifically, we must know how to take monies and profits out of the business, and lock-it away for the owners’ retirement.
In this video I will show you how to do just that.
Let’s get started.
The Topic is Entities and Business Operations: First, most of us operate our business in an entity, like an LLC or Corporation, whether as a “C” corporation or an “S” pass-thru for tax purposes. Each is fine. One decisioning factor of which entity we should choose, is the timing of the profits or losses. It is common to consider, whether you expect to show a loss, in early years, and need a pass-thru loss on your personal returns. Otherwise, if income and growth is expected, we can plan to maximize use of a “C” corporation for expenses, and reasonable salary, medical, life, reimbursement and insurance plans, bonus, and pension contributions. Another factor is whether you intend to seek bank loans or credit and need to show maximum revenues, for example, for rental real estate, and whether you can personally obtain same (for basis) and assign same into an “S” corporation. Other factors include the number of owners and type of ownership or interests, whether equity or just profits. An LLC, and Series![]() LLC may have maximum flexibility in that regard, but the “C” corporation can also fashion various stock capitalizations, using common, preferred, etc. Other factors include segregation of risky assets from less-risky assets. By assets I also mean, lines of business, and lines of activities.
What’s Business Integration and Segregation? By asset or business segregation we mean putting risky assets or businesses into its own entity to lessen vulnerability of other assets or lines of business. Integration is how we structure entities, trusts and devices for certain purposes. Note, if you only consider tax benefits, your choices are likely to conflict with business, estate, asset, and retirement purposes. Also, your likely conflict with substance, and that’s the danger zone. All too often, Clients and or CPAs who focus on tax benefits or form, run afoul of substance aligned with reality. You must seek substance and not form.
The most important lesson, contrary to what you may think, is to analyze your business and life, based on its purposes and goals, lines of business and activities, and segregate each into its own entity, trust or device. That’s the safety zone. Please think about that. Your structure or plan is only as good as the reality of your substance. Take the time to think that through. It alone, is worth the price of admission. The mistake CPAs, lawyers and clients make is to apply a common strategy or structure, that actually conflicts with your unique life and business substance. Substance wins, form loses.
So, the operating entity choice alone, unless specifically required by a business license or regulation, is not usually destructive to your purpose and goal. For example, an LLC can elect to be taxed as a “C” corporation or a pass-thru partnership.
Although these issues are key, the critical structure is equally or more important. That’s right, the segregation of the lines of business and lines of activities into its own entity, trust or device, and the contractual relationship among them is critical. Therein lies a level of protection. For example, would you want real estate that you own to be vulnerable to your business liabilities which you operate at that property or office? No. You would want that real estate in its own entity (like an LLC), and the operating business in its own entity, and a contractual arrangement defining that relationship. Also, in some businesses, it’s appropriate to have a management or marketing arm in its own entity, with a contractual relationship with the primary business operating entity. In other businesses, it’s appropriate to have a delivery service in its own entity shielding each from the other. Another example is the ownership of intellectual property or IP. IP is intangible property like trademarks, and patents. IP can be owned by a separate entity and contractually licensed to the operating entity with an automatic reversion clause in the event of lawsuits or creditor attachment. There is often little reason to expose the IP diamonds to creditors of the operating business entity. Note that the different entities and the owners can supply loans (to or from), licenses, use of property, or other value, real or personal property or services to the other in return for consideration, promises or payment of money. The timing of this may also be key. Certain entities may have different tax years as well. Generally, the return of property or repayment of loans are not taxable events. Planning for expenses and taxable income events in various entities is important. You need entity tax planning mid-year, every year. Speak to your CPA about these possible arrangements.
It’s about substance, not form. It must be real, or it will be attacked.
So, what I am pointing out is, the entities, trusts and devices and how they integrate is the key, not just what entity you choose for operations. Understand that in California, foreclosure of the ownership LLC interests, or stock, is allowed, lessening the protection of the charging order. When possible, we would use the situs of an entity in a state that has beneficial charging order benefits such as Wyoming and Nevada. For VC funding goals, or startups, Delaware may be the favored situs.
Let’s talk Pensions, Entities, Trusts, and Devices.
It is often advisable to put certain assets or lines of business and activities in various entities, trusts or devices (for example, LLCs, C or S Corporations, Children's Trusts, Life Insurance Trusts, Private Retirement Trusts, IDITs). This is done for asset and risk protections, as well as for tax reduction reasons. Interests of those certain entities, trusts or devices may be assigned to the Living Trust, to avoid probate, its cost, expenses, and risks.
The Topic is Pensions and The California Private Retirement Trust:
In California, to protect cash, and retirement property, we have one of the most powerful devices known as the statutory styled private retirement trust or the PRT. It’s not just a pension holding device or trust. Let’s stop here and discuss the PRT as it should be the end-goal of most business owners. Why, it’s one of the only devices that can legally lock-away cash and retirement property even in the face of lawsuits or judgments. Contributions, accretions, and disbursements to and from the trust are protected from creditors by black letter California law.
The Topic is Converting Non-Exempt Assets to Exempt Assets.
In addition to homestead exemptions which have limited but effective value, one of the most powerful retirement asset protection methods is converting the non-exempt assets to exempt status. This can be done is various ways including by trusts, pensions and (marital or separate) property or transmutation agreements. For example: the Private Retirement Trust (or PRT). The PRT is one of the most powerful devices used to enhance an estate and business plan which protects the cash, wealth, equity, property, or assets transferred into this irrevocable trust for purposes of retirement. The authority of such a trust is a creation of local state statute, which varies state to state, if at all. For example, in California, under its Code of Civil Procedure Section 704.115(b), all amounts held, controlled, or even distributed by a private retirement plan are exempt. This means that you could even transfer certain assets into an existing PRT pursuant to its Retirement Plan, during subsequent litigation or after a judgment, save fraudulent transfer. The term private retirement plan´ is not defined in the state code however, typically, the retirement plan would be sponsored by an employer (typically your LLC), in writing pursuant to an actuarial calculation based upon numerous retirement factors including age.
Note that all amounts held, controlled, or in process of distribution by a private retirement plan, for the payment of benefits as an annuity, pension, retirement allowance, disability payment, or death benefit from a private retirement plan are exempt. This differs greatly from other exemption codes in California such as California Codes Code of Civil Procedure Section 704.010-704.210, which is the Individual Retirement Accounts (or IRAs).
The Topic is the IRA.
IRAs are not fully protected under the asset protection laws found in federal ERISA protections. However, some states have enacted special but restrictive protections of IRA plans, protecting the funds and distributions only to the extent necessary for the support of the debtor, spouse, and dependents (as in California).
The Topic is the Qualified ERISA Plans.
ERISA (Employee Retirement Income Security Act of 1974) supplies very effective asset protection over pension funds. The federal law overrides state law to the contrary and protects 401k, profit sharing and pension plans that prohibit involuntary assignment of plan benefits to any creditors. Assets may be transferred into such a plan with known creditors, lawsuits or judgments, save Fraudulent transfers. However, ERISA will not protect such assets from the IRS or subject to court order in divorce court (or a Qualified Domestic Relations Order). ERISA plans protect employees, but not owner-only plan participants. If the plans only participants are the owner and his family (spouse or dependents), then ERISA will not apply to protect the funds.
This section alone is also worth the price of admission. Listen to it again and consider it as an end-goal of all your hard work.
The topic is The Corporation. The "C" and (“S”) Corporation.
The "C" corporation is often the best entity for front line business operations that can afford maximum tax write-offs. Corporations are often used to operate a business with limited liability, and to divide up your business activities for creditor and lawsuit protection reasons. It is often beneficial to segment your "risky" business activity (or assets) from your "safer" activity (or assets), or to have certain corporation(s) act as partner(s) to other devices. The "C" or "S" corporation may be used to as your front-line business entity, which in this day and age, is expected to be sued. The "C" corporation is often used to "conduct" business with minimum asset ownership. Certain capitalization rules must be satisfied with legal contributions, insurance and credit. The "C" corporation is often used to maximize corporate and "fringe benefit" deductions. However, if "C" deductions and fringe benefits are not used, the "C" corporation will be vulnerable to "double taxation" (taxation once at the corporate tax return level and again at the personal "wage" level). Like the "C", the "S" is often used to achieve the same level of limited liability protection, but with less fringe benefit tax deductions. However, the "S" comes with pass-through taxation, which is often advantageous to many clients who expect (some) losses in the first years of operation or use the "S" with other devices named herein, etcetera. The tax attributes of income, deduction, credit and loss are passed through to the shareholders personal tax return. The "S" corporation does have several limitations that you must be aware of, including but not limited to (1) the number and type of stockholders, (2) limited loss deductions when debt is in excess of basis, and (3) the lack of increase in basis due to entity level debt (whereas the LLC and FLP (LP) does not have such limitations), etc. For example, for basis reasons, an S owner should consider getting a loan personally (not the S itself) as opposed to the LLC (or FLP) which can have the entity itself get the loan and benefit from that increase in basis adjustment.
The Topic is The Family Limited Partnership (or FLP).
This is, or was, a very popular business and estate planning instrument (especially before the LLC). It was used for many purposes, some of which include asset protection, favorable pass-thru taxation, ability to control transferred property (as managing member or per the LLC), reducing estate or income taxes, life insurance ownership, and fractional gifting with use of beneficial "discounts".
Let’s Talk About the Charging Order.
The family limited partnership will protect its assets from partner creditors. It has a general partner and a limited partner. The general partner is in the 100% at-risk position and the non-active limited partners are shielded from liability. It is or was common to have a Corporate General Partner, with a minor interest, like 1-10%, and the limited partners own the 99-90%. Thus, the protections inherent therein.
It has the power of the favorable asset protection charging order laws. (Ca.Corp.C 15522, 15673; Fla. Stat. 620.22; Ariz.Rev.Stat.Ann. 29-341; Nev. Rev. Stat. 88.535; NY Partnership Law 111 McKinney; Tex, Code Ann art. 6132a-1 7.03, etc.). However, be aware, in California, effective January 1, 2003, the law changed to allow "foreclosure" of interests. This is a dangerous change and a blow to the asset protection feature of the charging order. Normally a charging order is the exclusive remedy and will only allow the creditor to obtain certain distributions from the entity, if any, and not the assets. However, in such cases, generally the creditor would receive a taxable event (under RevRule 77-137) upon the issuance of a charging order (as constructive income), even if you receive no cash or property. This could be a powerful settlement device. It appears that one should consider opening an FLP (or LLC) in a state that does not allow "foreclosure", like Wyoming or Nevada, and then qualify to do business in their own state.
Now it is also common to structure the FLP as a Family LLC.
Let’s Talk About the Limited Liability Company (LLC).
LLC stands for Limited Liability Company. However, if an LLC elects to be taxed as a “C” corporation, it then stands for Limited Liability Corporation.
An LLC is a creature of state statute. It varies from state to state. It most often takes the substance of a limited partnership for purposes of liability, accounting and taxation. Most clients will desire the substance and form as a "limited partnership" (not a "corporation"), especially if residential or commercial rental properties or other capital assets are to be held or owned by the LLC.
The LLC is the most flexible entity structure. You can create various forms of capitalization, including equity, economic or profits interests, both passive and active. You can have special allocations and percentage holdings, without restrictions to the type of ownership.
Generally, all of the favorable attributes of the (family) limited partnership discussed
above apply to the LLC, including but not limited to asset protection, favorable pass-thru
taxation (Subchapter K partnership taxation), the ability to control transferred property
(as a managing member or per the LLC), ability to reduce estate or income taxes, to hold life
insurance, for fractional gifting with the use of beneficial "discounts", the ability to
allow passive investors a voice in management without fear of losing the limited liability
status, the ability to make passive investors active without loss of limited liability status,
and favorable asset protection with the use of charging order laws. The LLC also allows for use of the Single-Member LLC and disregarded ownership taxation (through TR 301.7701 et seq), which does not require a separate entity tax return or Federal ID number.
Also, one key structural advantage, is having several Single Member LLCs, holding different property or businesses, all held by, for example, a favorable Wyoming multi-owned protected entity.
Note that certain cases have allowed single-owned LLCs to be pierced, but that can be counter-acted by the favorable Wyoming or Nevada owner of the single member LLCs.
Finally, Let’s Talk About the Business or Land Trust.
Is it real and valid. Yes, even though it is not by substance and law an asset protection device because beneficial interest can be reached by creditors. However, it is very useful to hold various businesses or property which can also be held in a Wyoming or Nevada multi-owned LLC, similar to the Single-Member LLC structure. It is also a disregarded tax pass-thru entity.
The business trust is often used as an alternative to the other business devices to operate a business and add a level of privacy and potential creditor protection; or used to hold rental real estate. The trustee may be a person not owning the beneficial interests therein. Often family members may be effective holders of the generally "private" beneficial interests of the business trust. Warning - the beneficial interests may be attachable by creditors.
In Closing:
We end where we start. The most important lesson, contrary to what you may think, is to analyze your business and life, based on its purposes and goals, lines of business and activities, and segregate each into its own entity, trust or device. That’s the safety zone. In California, to protect cash, and retirement property, we have one of the most powerful devices known as the statutory styled private retirement trust or the PRT.
Well, I think we did it again. Congratulations for watching this video.
Now you have to make an important decision. What is the next video you need to watch, Video 1 for Living Trusts, or Video 3 for Advanced clients.
You can BOOK A CALL with Wealth DOT Attorney, and for a limited time directly, with California Attorney, Rich Rydstrom. See the link in the video description or call 877 WIN 4 YOU.
Thanks Again, Rich Rydstrom California Attorney
LEGAL NOTICE: IRS CIRCULAR 230 DISCLOSURE NOTICE: To ensure compliance with IRS requirements, we inform you that any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used by any taxpayer, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Any legal advice expressed in this message is being delivered to you solely for your use in connection with the matters addressed herein and may not be relied upon by any other person or entity or used for any other purpose without our prior written consent.
This information is for general non-exhaustive educational purposes only. May be deemed an advertisement by the State Bar. All Rights Reserved in trademark and copyright. © 2022 Rich Rydstrom, California Attorney. Call 877 Win 4 You, Email Info@Wealth DOT Attorney
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Video 1 Living Trusts by Expert Attorney Rich Rydstrom Video 1 of the 13 Secrets of the Rich or Informed™ Series
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Text
Video 1 of the 13 Secrets of the Rich or Informed™ Series
https://youtu.be/wHlvDjJ8oec
https://ikiabiz.com/wealthattorney
Congratulations. You Made It! You found the first Video of, The 13 Secrets of the Rich or Informed. The topic of this video is basic Living Trusts. First off, remember, Living Trusts are not just for the rich. It is for the Informed as well. What I just said is the key to your decisioning in this matter. I'll say it again, Living Trusts are not just for the Rich. It is for the Informed as well. To remember this point, just remember the title of my Cheat Sheet, The 13 Secrets of the Rich or Informed. I named it that, back in 1990 to date, to remind us all, of that truth.
I'm Richard Rydstrom, a California Lawyer with over 33 years’ experience. I'm rated 10 out of 10, Superb. Sit back and relax, let me try to fashion a clear confident path to step one of family and wealth protection.
Notice what I said. I said a clear confident path to family and wealth protection. That’s Family as well as Wealth Protections. This is protection from the court system, protection for the family and powers over the person, as well as powers over your wealth. The Living Trust is step one to that goal, whether or not you're rich.
In this video, I will share the basics, and the key points you should know when considering a Revocable Living Trust. Remember, I have actually drafted and used, and I usually see, the Living Trust as the quarterback for life decisions and contingencies., even for basic, or very complex estates.
The picture of the trust is an actual Living Trust Package drafted by me. I took this picture with my phone. It's real. I did this so you would see the actual end product of a common Living Trust. It's the WHAT, in what you need in a common estate plan.
I’m not going to give you legal definitions like the many lawyer videos out there. But I do have to say, that you, and or your spouse, or domestic partner, would be the makers, or Trustorrs, of the Trust. The makers transfer certain and select assets into the name of the trust, and the Trustee manages the trust and its property according to your written instructions.
The Trust and its related documents, enunciate your instructions and intent as to you and your family members, and your assets, during your lifetime, during incapacity, and in the event of death. One other key goal or benefit of the Living Trust is the avoidance of Court Probate. Usually if you have a Will or no Living Trust, your family members will have to go to Court Probate. That means you have lost your privacy over your family and asset matters. Also, in a nutshell, going to court is expensive. Going to court for Probate, is expensive and usually riddled with great delays, costs and fees. So, it's true, the avoidance of Court Probate benefit of the Living Trust should be a primary goal.
Also, the Living Trust package integrates your instructions and wishes as to end-of-life decisions. It also defines your intentions as to your children. These are key and important matters that most clients desire to pre-define and keep private, to the extent possible.
At this point, please allow me to add some technical legal information and point out a few more goals. In October 2022, the lifetime estate and gift tax exemption was slated to go up to $12.92 million in 2023, up from $12.06 million in 2022. That means rich people can transfer more to their heirs during life and at death. So generally speaking, taxes are not a big issue for couples with much less than $25.84 million. The annual gift tax exclusion went up from $16,000 in 2022 to $17,000 in gifts per year in 2023. It was common to structure the Living Trust in 3 sections to maximize tax exemptions. For example, the A Trust, the B Trust and the C or QTIP Trust. Upon the death of the first spouse, the Surviving Spouse would remain with the revocable A Trust, and the deceased spouse's property would allocate to the Irrevocable B Trust to the extent of the Bypass Trust Exemption amounts, and any excess would be allocated to the C or QTIP Trust. In addition to tax motives or efficiencies, these trusts could also define certain control in the B or C Trusts.
So why do I still say you may need a Living Trust package? Because it's not only about taxes.
The answer is because it protects the rich or the informed. Primarily they use it to avoid Court Probate. Also, the informed use the Living Trust package as its quarterback to direct the contingencies over the person and estate for themselves, their family, business, retirement, and children, during life, incapacity and at death. Specifically, they use it to define who and when their property is used for others or transferred to others.
But let's talk about our children. Yes, the informed use it to pre-define the decisions for their children during their life, at incapacity and at death.
Let me quickly give you a short list of appropriate documents contained in my California Living Trust Package. Normally, the makers of the trust define these decisions in their Living Trust itself, and the Pour-Over Will, which is a catch-all that includes property left out of the trust for any reason, if not otherwise designated (like with a pension, life insurance or retirement POD, or other trust like a life insurance or children’s trust). They also define their health care, incapacity, end-of-life, relief from pain and agent decisions and designations in their Advanced Directives. They also name their conservator over their person and estate (usually their spouse). Additionally, they define their attorney in fact agent for asset management decisions. Let me also dispel the use of inexpensive online state Will forms. Making no Will or Living Trust will trigger Court Probate at death. The use of a Will alone also causes Court Probate, its delays and expenses, including Will Contests or lawsuits. So those choices are not usually desired for the reasons stated.
Now let's talk about Children again. Notably, they also name the Guardians over their Children to make all decisions relating to health, education, maintenance, support, and welfare, to the extent of un-defined discretion, and the scope of law. It is important and key here to note that the law generally has power over minors. California Probate Code Section 2590 (b) states: The guardian or conservator does not have a power specified in Section 2591 without authorization by a court under this article or other express provisions of this code. So, the court remains with the power in its discretion to grant the guardian or conservator any power specified in 2591. That's Section 2590 a. Generally, the Court looks for a showing of necessity, explanation, and intent to grant or uphold a power over your Children, as necessary, appropriate and or useful. Therefore, The Living Trust package and a special Nomination of Guardians of the Person or Estate of Minor Children should also include a special expression of nominations, wishes, intent, priority, necessity, and prescription, for concerns over our minor children's health, welfare, medical, housing, schooling, incapacity, and final wishes, with consent of sections 1500, 1501 and 1502, et al, to the extent allowed by law.
So, a primary goal for most makers of a Living Trust is to avoid Court Probate, contests, and lawsuits, including guardianships, or conservatorships.
Finally, with that said, you have the power to change your instructions, or revoke your revocable living trust. Doesn't that itself make the decision to go with a Living Trust safer? I think so.
Therefore, the Living Trust is needed by many Californians, whether or not you are wealthy.
In closing, and for those who need a bit more legal talk, let's say it this way.
1. The Revocable Living Trust. The public knows this device as a Living Trust. The Living Trust is most often used to avoid Probate, its costs and delays. In tax circles it is called the IRC Section 671 Trust or disregarded tax entity trust, similar to the Tax Regulation 301.7701 pass through concept. It is generally a tax-neutral device. However, you may use this trust to invoke maximum estate tax exclusions for the spouses or domestic partners, and to add no-contest clause to protect against some third-party challenges, but because its revocable, the Living Trust is not an asset protection device, until the death of the first spouse and the creation or funding of that trust as Irrevocable. With proper business and estate protection planning, the living trust is commonly used to hold 'select' property and all of your (personal) property "interests". No, not everyone should have a Living Trust, and sometimes we intentionally cause a limited Probate for reasons including to get shorter statute of limitations to limit lawsuits or attacks.
2. Most persons commonly use the living trust in business and estate protection planning as a central planning device or quarterback. It is part of most business and estate protection plans, as it can avoid probate and act as the directing authority for all or most of your property disposition plans, including certain investments. Although certain investment accounts are considered "POD" accounts that avoid probate (or "payable on demand"), you should coordinate PODs consistently with your estate, business, and retirement plans, which includes your Living Trust. For some estates, this device alone is not sufficient as a business, estate and asset protection planning solution. To have maximum effectiveness, it should be used with one or more of the other devices or techniques mentioned hereinbelow.
3. In larger estates, it is often advisable to put certain assets in various other devices (e.g., LLCs, Children's Trusts, Life Insurance Trusts, C or S Corporations, Private Retirement Trusts, IDITs, Pensions, etc.) for asset and risk protections, as well as for tax reduction reasons. Interests assigned into certain other devices may be assigned to the Living Trust. Contrary to myth, generally it is not intended as an asset protection safeguard, at least during life (while it is revocable). Assets held in your living trust are not protected from the reach of creditors. (California Probate Code, Sections 18200, 15304 (a), 15304 (b)). However, you can achieve some measure of property characterization protection (as separate or community property transmutation agreements, etc.) if the husband and wife maintain separate living trusts with property agreements.
Well, I think we did it. Congratulations for watching this entire Living Trusts basic video as part of our 13 Secrets of the Rich or Informed Series. My position is you should retain an attorney and fully explore your options and means to obtain your goals. There is no one-size-fits-all in the law, you are all unique.
If you have a small business, watch Video 2 of this series. If you have a large estate or lawsuit or retirement funds to protect, be sure to watch my Advanced Trust Video 3 of this series.
Thanks Again, Rich Rydstrom California Attorney
Call 877-WIN-4-You, https://www.Wealth.Lawyer
LEGAL NOTICE: IRS CIRCULAR 230 DISCLOSURE NOTICE: To ensure compliance with IRS requirements, we inform you that any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used by any taxpayer, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Any legal advice expressed in this message is being delivered to you solely for your use in connection with the matters addressed herein and may not be relied upon by any other person or entity or used for any other purpose without our prior written consent.
This information is for general non-exhaustive educational purposes only. May be deemed an advertisement by State Bar. All Rights Reserved in trademark and copyright. © 2022 Rich Rydstrom By Rich Rydstrom, Esq. (California Attorney) 1-877-Win-4-You ™ | Info@Wealth.Attorney
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Script: Save the Date Living Trusts Announcement
WOW! OK! You’re still learning and researching Living Trusts?
Isn’t it time to act and get Peace of Mind?
Lesson One: The Living Trust is often at the center of the most basic to the complex Estate, Assets, Business, and Retirement Protection plans. It’s your quarterback for contingencies that happen in life.
Frustrated? Confused?
Tired of watching complex Lawyer Videos about Living Trusts?
Are you trying to become a YouTube Lawyer or obtain family protection?
What if I give you One Video that answers your Living Trust Questions,
and gives you Clarity & Confidence to transform your family from
Confusion and Uncertainty into a clear PATH to Peace of Mind.
Usually, the biggest mistake is procrastinating and failing to get the Living Trust Package!
Don’t fall into a state of Analysis Paralysis.
You need a clear PATH from inaction to action.
From confusion to accomplishing the goal.
From No Estate Protection to Estate, Business and Retirement Protection with Peace of Mind!
From Confusion to Peace of Mind!
You need a Fast, Easy, Step-by-Step Path.
What’s that look like?
You’re invited to watch my 13 Secrets of the Rich or Informed Blueprint Video Edition.
Video 1: Living Trust answers for decision makers. Video One is a short but potent overview of issues regarding the Will versus the Living Trust, the risks of using California statutory default forms and inexpensive online services, compared to custom drafted Attorney documents. Video One is STEP ONE to decide if a Living Trust is appropriate for you to consult an attorney and make a decision.
Video 2: Living Trusts for Small Business Owners. Video TWO is a short but potent video for persons who also own a small business and how it relates to the Living Trust and estate and business protections.
Video 3: Complex Trusts for Large Estate Protection, Business Protection and Retirement Asset Protection. Video THREE is a short but potent video for those who want to implement estate, business, real estate, and retirement protections, including unique California devices that legally and ethically add protections even in the face of lawsuits.
You’re Invited to watch my 3 Part Video Series entitled, The 13 Secrets to the Rich or Informed, The Blueprint Video edition regarding Estate, Asset, Business and Retirement integration Protections. Yes, Video 1, starts out with Living Trusts. A Living Trust is usually the HUB of a comprehensive plan. Whether you have a very simple estate or a more complex estate, the Living Trust is at the center as the quarterback directing the answers to all contingencies that happen in life, incapacity, and death, or in building a Dynasty for generations to come. The Living Trust is your peace of mind. My videos are not lessons for you to use as a do it yourself plan. That’s not advised. I think you need to hire an attorney, but my non-exhaustive Blueprint will arm you with most key questions and options, and that’s important.
Thank You, Attorney Richard Rydstrom.
Rich Rydstrom is a 33-year veteran California Attorney. You can reach him at 877-Win-4-You or at the website
www.Wealth.Attorney
Part I Section 7701.—Definitions 26 CFR 301.7701-1 - IRS
https://www.irs.gov › pub › irs-drop
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26 CFR 301.7701-1: Classification of organizations for federal tax purposes ... Section 1.671-2(e)(1) of the Income Tax Regulations provides that, ...
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Part III - IRS
https://www.irs.gov › pub › irs-drop
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federal tax purposes. .02 Section 301.7701-1(a) of the Procedure and Administration Regulations provides general rules for the classification of various ...
Internal Revenue Service, Treasury § 301.7701–3
https://www.gpo.gov › fdsys › pkg › pdf › CFR-2...
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(1) Federal tax liabilities imposed by ... §301.7701–2 is treated as a corporation with respect to items described ... partnership under those regulations,.
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26 CFR 301.7701 - Effective dates and duration of taxable ...
https://www.customsmobile.com › regulations › expand
Under the rules of this section and § 301.7701-3, an eligible entity with more than one owner in Country A is treated as a partnership for federal tax purposes ...
Special Rules Provided For Foreign Entities, Single-Member ...
https://www.taxnotes.com › proposed-regulations › pro...
Proposed reg. section 301.7701-2 specifies business entities that are automatically classified as corporations for federal tax purposes; any other other ...
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