Epic Real Estate Investing - Trust, Will, or LLC to Protect My Rental Property? | 1258

Episode Date: March 7, 2023

Having property acquired may be difficult, but after doing so there are some crucial steps to be made, to ensure the future of your family. In today’s episode, Mercedes is joined by Shane Young, winner of the “Best of Las Vegas” for 2022. Shane is all about keeping families and business owners out of court and conflicts, providing true peace of mind, and achieving goals, such as asset protection, legacy, and generational wealth. Stay tuned and learn a lot about trust, will, and LLC to protect your property! BUT BEFORE THAT, Matt reveals the shocking truth about real estate failure, and how to turn it around. Are you ready? Let’s go! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. Are you ready to find out why you're failing as a real estate investor and what you can do to turn it around? That's why I'm here. Today, I've got two checkpoints for you to review on your roadmap to success and has nothing to do with getting more leads, moving to a different market, or waiting for a better economy. You ready? Let's go. Welcome to the epic real estate investing show, where we talk about the housing market, creative financing strategies, and everything else you need to retire early. And if you're ready to get to the next level in your real estate game and get there fast, go to

R-E-I-A-Ase.com, where most training programs end, ours begins at R-E-I-Aase.com. Enjoy the show. When people come to me for help with their real estate investing business, they think that if they only had better leads, a different market, or they had more cash buyers, that all of their problems would be solved. And I'm noticing right now more and more investors, they're checking out voluntarily or involuntarily, sideline by the economy. But some are having the best months of their careers,

like private client Chevy Allah. He sent this to me last week. That's a six-figure assignment fee. Who says you can't wholesale in today's market? Chevy didn't get that message. He's just doing the work. He deserves all the credit. And if you want to do what he's doing to get what he's getting,

I'm going to share with you two places for you to check inside of your business. And if the first one doesn't get you back on track, the second one most certainly will. For most people, it's going to be both. All right. So number one, it's your convert. system. Because if your conversion is done right, everything else is easy. And I'll use my conversion quadrant here to explain. You know, most real estate investors operate in this lower left-hand quadrant,

where they play bad cock with sellers, meaning their interactions with the seller are adversarial in nature, sometimes intentional most of the time not. But the mindset here is, I'm going to go ahead and grind the seller down to the lowest price possible. And when they get to the point of making their offer, it's their idea. This is my opinion of your property's value, Mr. Seller. And this is what I'm offering you. And this creates a lot of resistance in the buyer-seller relationship, especially if the seller's motivation isn't super strong. And the result, more times than it should be, is no deal. I mean, really, the only way you can survive down here is through experienced, ninja-like negotiating and or a huge marketing budget that creates tons of leads that you can afford

to burn through. Now, the next biggest portion of the real estate investor population is up here, top left, where they're still in this bad cop role, they're still playing that role, but they've been beaten up so much down below that when they've finally, find a seller willing to work with them, it's like a relief. But the price, it's the seller's idea. The seller might still even offer up a discount, but typically it's not enough of one. The investor, though, is like, hey, at least I got a shot now. Let's go for it. But now the seller is essentially the boss in the relationship. They're calling the shots. And they're hounding on what's taken so long. And when are you going to close? And the transaction becomes

a real struggle for you. You see, there are a lot of investors that were winning up here. They had become accustomed to winning here because the rapidly appreciating market over the last several years had been bailing them out of their incompetence, protecting them and saving them from their mistakes. Now, they're all canceling a lot of contracts and or they are trying to build a bigger buyers list, hoping that they can find a bigger sucker than themselves on that list. Now, we operate different over here, where we position ourselves as the good cop. We team up with the seller to solve their problem, and we make the market the bad cop. Now, this hasn't been as easy as it normally is the last few years because the market was really the good cop in the way that prices were appreciating

so quickly. Totally different now, though, with interest rates doing what they're doing, the economy doing what it's doing, supply chain interruptions, the cost of goods, and with it all being covered on the media now, the market is playing its role as the bad cop again. The good cop mindset, it's kind of like this. Mr. Seller, I think you're asking for a fair price, so let's give it a shot. As long as the market doesn't get in the way, I'm all in. As a seller right now, wouldn't you rather work with that guy? Totally. But even here, this takes some experience and skill to pull out a price from a seller that's fair for both of you. And investor buyers will still come up with the price for their offer down here because they just don't know how to present it. And the seller will likely agree to

your offer because they like you. They feel you're on their side. They know that. But because you came up with the price, they're doubtful. They've got questions. And they're thinking and asking, are you sure this is the best you can do? And your transactions go slowly. But then, Up here, where you're the goodcock, and the seller comes up with the right price on their own, you get to work with cooperative sellers, and your transactions are easy, and sellers are grateful, and they give you testimonials, and they send you thank you cards. That's what you're going to experience when you're operating up here. That's how we do it.

But you need a framework for this, and you need to practice it. Just like you practice the piano or your golf swing or juggling tennis balls, this skill is just like those, but it just pays a whole lot more. So practice your craft. Confucius. You heard him? He said, by nature, men are nearly alike. By practice, they get to be wide apart. And Bruce Lee said, I fear not the man who practiced 10,000 kicks once, but I fear the man who practiced one kick 10,000 times. And then Tony, he said, it's what you practice in private that you will be rewarded for in public.

And the type of practice that will make you great takes commitment. Your level of commitment, it cannot be underestimated, because it's what has you exactly where you are today with regard to your relationships, your fitness, your income. I mean, your income is at a level that's in perfect alignment with your commitment. It's not the economy. Right now, you are earning what you are committed to. And I know you have big goals and dreams, but they're not commitments for you. Yet, if they were and the economy pulled back, you'd find a way. If it's imperative, you make more money, you will. And I noticed this for myself about 12 years ago, because up to that point, I never wanted kids. I never felt I made enough money to support myself plus a third human being. I had enough for my wife and I, but I wanted to be

set up financially for family. And I never felt I was financially set. And at the time, you know, Mercedes and I were clearing a couple hundred thousand dollars a year, but our income was very erratic. We made good money, but it was somewhat unpredictable, enough so for us to always be concerned about it. But when we had Mateo, that year, we had our first million dollar year of profit. I had made millions before when I was in the music business, but it went right out the door as fast as it came in. You know, looking back, I can see I wasn't committed to keeping it. As a real estate investor, I went from a couple hundred thousand a year to a million dollars because it became imperative that I did. My son became like commitment, breathing. That's a commitment. And so you

breathe, right? You never miss one. Do you? And when you do, it's alert, alert, need more oxygen. And you'll do whatever is necessary to get it. Now, imagine your income goal as a commitment like that. You know, I thought to myself, if I can go from $200,000 to $1 million in one year, I can certainly get to $5 million in five years. And Mercedes and I did it in the following year, because we made it a commitment. So if you don't have a conversion problem, then you've got a commitment problem. So step one is to change your commitment. Step two, you've got to get certainty behind it. You have to change your belief about your commitment. No, 20 years ago while listening to my first Tony Robbins tapes, here, do this with me. Whether you're watching me on YouTube or listening to me

on the podcast, do this with me. As long as you're not driving or operating heavy machinery, do this with me real quick. Stop what you're doing and look around you and focus on everything that you can see that is blue. Look, look, look. Count how many things that you can see that are blue. Keep looking, keep looking, keep counting. All right, now, close your eyes. Close them.

Without opening them, tell me how many things you saw that were brown. It's not as big of a number, is it? Now, open your eyes. Now look for everything that's brown. You see a lot more brown stuff now, don't you? Why is that? Because you're looking for it.

Because whatever you focus on, you'll find. In fact, you'll find stuff that's not even there. For example, you probably just counted things that were beige because it was close enough to being brown. And you wanted to win this game. You wanted to feel successful. See, once you believe something is a certain way, out of your need for certainty, you'll change things to meet that belief. Here, look at this. There's a common misconception that the rich get richer and the poor get poor due to a rigged system.

That's the belief. But that's not true. It's what each focuses on that produces their riches or their poverty. Here, look at this circle. It's divided into four equal parts. And you'll notice that you've got the word potential in the upper left, and in the upper right, you'll see the word action, the bottom right, you see the word results,

and the bottom left you see belief. Now, you can move clockwise on this cycle, or you can move counterclockwise, but you can't stand still. And depending on which way you're going, you will pick up momentum, and it will become perpetual and less aftodon by an outside force. Typically, it's going to be something that interrupts or changes your belief.

But let's start with potential. What's the potential? of a human being. Unlimited, right? Do most people's results, though, reflect that true potential? Yes or no? No, they don't do that. Because most people aren't taking enough what? Action! But is it possible to take a lot of action and still get lousy results? Yep. I mean, what if every time you talk to a seller, you said, you don't want to sell your house to me for half price, would you? Do you believe that would get you good results? Definitely not. You know, you'd get terrible results if that were your opening line. So it's not just action we're talking about, it's the right action, isn't it?

So if you're taking action in your real estate right now, but it's the wrong action, does that affect your potential? Yes, it does, doesn't it? And when the incorrect action delivers lousy results, what does it do to your belief? You go, see, I told you it wasn't going to work. And what does that do to your potential? What? It limits it.

And does that limited potential cause you to take more or less action? Let's... And what does that do to your results? They only get worse! And then to your belief, it's shrinking more. We've got momentum moving in the long direction, don't we? Yep. And that's why we have the economy that we have right now.

Oh, damn, look at what we've done. Everyone's out there going, oh, my God, the results are so bad, and it's going to get worse. And they've hunkered down into defense mode. They're playing it safe. And so we have less potential. And so are people taking more or less action right now? Less. And that's what creates a recession.

You know, the University of Maine in 2017 found direct connections historically between market pullbacks and public sentiment. It's the public's beliefs that drive the economy more than the actual economics. We've got to put an end to this torture. So, which way would the economy go if people believed a recession was a good thing? Oh, which direction would you go if you believe with absolute certainty that a recession was your friend? If you believe that the worst epitominy for the country was the greatest time on earth for you, what type of action would you be taking?

A whole lot. You know, Chrysler, Boeing, the Kennedys, J. Paul Getty, Howard Hughes, they believed the depression was their friend, and they became rich because of it. You see, when you have that kind of certainty, when that's your belief, are you going to tap into more of your potential? Of course. And that will lead to more action, won't it? Yes.

And what will that do to your results? Improve them. And then what will that do to your belief? Your brain goes, hey, this recession is working from me, and that increases your potential. And then you take more action. Now we're going in the right direction. And so you can choose to believe what everyone else is believing about the economy, or you can choose to believe what you believe about your economy.

You can decide what you want to commit to. You can believe that we're in the worst of times, or you can believe we're in your best of times. Whatever you choose, you're right. You knew he was going to say that. Now you're ready for step three. Implement a process that works. Maybe it's ours, maybe it's not.

there's more than one way to skin this real estate cat. But we've got a proven process, and we've got the results. Now, all we need is they committed you on the middle, and that would put you in the same place all of these people once were. And now they are our proof. And that brings me back to my two reasons as to why investors are failing. To become a successful real estate investor, you must commit to practice and believe you can do it. It doesn't matter what the economy is doing.

What matters is what you're doing while the attorney. economy is doing what it's doing. We'll be back with more right after this. Boarding for flight 246 to Toronto is delayed 50 minutes. Ugh, what? Sounds like Ojo time. Play Ojo? Great idea. Feel the fun with all the latest slots in live casino games

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comics ontario.ca. She's been helping busy professionals for more than a decade now build passive cash flow with real estate so they could take their foot off the gas a bit and enjoy the good life. Let's raise our hands, unless you're driving, of course, for the turnkey girl, Mercedes-Torres. Hello and welcome back to the epic real estate investing podcast. My name is Mercedes Torres, lucky enough to be partners in crime with Mr. Matt Terrio, the gentleman who created the epic real estate empire. Well, as you know, I do a segment called Ask Mercedes, where you, the listener, gets to send your real estate related questions to me via email, and I will do my best to answer them, or if I can't answer them, I'll do the next best thing, and I will bring on

an expert to help answer the question and really to bring light to the topic that we all need to know about. So recently, I received a question from Sonia and Thomas of Northern California. They're actually my clients, but here's what they said. We are a young couple, dear Mercedes, by the way, I love the last episode you shared. We are a young couple married for over six years, and we're a expecting our first son in May of this year. So congratulations to Sonia and Thomas. In our time together, we've acquired a total of four investment properties, all in our personal names, maximizing the Freddie and Fannie Magic Tent. While we have insurance on all of our properties, we don't have a structure or anything that will protect us from lawsuits or even more important,

anything that will ensure that our four properties will go to our firstborn. We don't know anything about estate planning and need your guidance. Signed, help. So, rather than me doing all of the research and attempting to answer the questions, I decided to bring an expert to the podcast, not only just an expert, expert, someone who is smart, knowledgeable, on point about the law. And over the next decade, I've experienced my share of these experts. So I've decided to bring along a young lady by the name of Shane Jasmine Young. She's an attorney and founder of the Young Law Group. She is a 22 best of Las Vegas winner. Her

practice really focuses on legal life planning, including trust and estates, business, long-term care, and kids' protection. She's a wife, a mother of five, and is dedicated to empowering others to make well-informed decisions for themselves, their loved ones, and their business, including real estate investments. Shane is all about keeping families and business owners out of courts, out of conflicts, providing true peace of mind and achieving goals such as asset protection, legacy, and generational wealth. Here's the amazing part of Shane. Shane was recently featured as a top businesswoman in Nevada's Vanity Fair. She's been in Fortune 500 magazines on Forbes and Entrepreneur Magazine inducted her to the Women's Hall of Fame.

She's also been selected for the 40 Under 40 Award by Business Among a Legal Elite by Nevada's Business Magazine. So without further ado, here are all the questions that we're going to ask, and I am here to introduce you to Shane. Shane, welcome to the Epic Real Estate and investing podcast. How the heck are you? I'm so good. Thank you for having me, Mercedes. Oh, my goodness, with all of those accolades, like when do you have time to practice law? You know what? I've learned how to be very efficient. My mom was very organized when we were growing up. So we learned to have very good, my brother and sister and I learned to have very good time management skills. Oh, my goodness. Well, you need to share some of those skills with me because

I have a team that helps me do everything I need to do, I'm sure, as you. Yes, I do. I love it. So, Shane, I read off the amazing things that you do, but I mean, yeah, that's what you've done. I just want to really learn about you. So why don't you introduce yourself and tell me about Shane. Yeah, so I actually grew up in Las Vegas. My family moved here when I was very young.

I was nine. My dad was actually an entrepreneur. and he was in the airline business, but we moved here for a job that he had. After a few years, he actually started his own business, his own airline, a charter airline, and he hired the people, he got financing, he purchased airplanes, he hired an attorney to help him get his business set up, and unfortunately that attorney took advantage of him with the help of some third parties, and they completely took control of the business away.

They ran it into bankruptcy, and we were left with nothing. So that was really devastating. I was young when that happened. I was in middle school. He hired another attorney, which was much better than the first, but filed a malpractice lawsuit. That lawsuit lasted from the time that I was in middle school until I was a sophomore in college. So that really shaped, you know, my experience growing up with my dad and his business and this legal battle that he was going through, trying to seek justice, you know, for himself and our family.

And one of the things that he and my mom instilled in me was the value of education and being empowered to be able to make the best decisions and who you can trust and how to get access to information. So I was one of those kids growing up that had to get straight A's, you know. So I was a valedictorian of my high school. I actually met my husband, Charles, in high school. We were both athletes. I played basketball and ran track. He played football and ran track. So we actually met at a track meet.

And we've been together ever since. And graduated from high school here. Went to Pepperdine for undergrad. Studied business administration. Got my bachelor's in three years, which was perfect timing because we were actually expecting twins. I was five months pregnant when I graduated from undergrad. So we came back home to Las Vegas. We were living in California.

I came back home to Las Vegas. And on my twins' first birthday, I started law school. And went to law school. I got the job at the, you know, big fancy firm, thankfully. You know, it did well, and that's where I started my legal career. But when I was in the big law setting, I was noticing that I learned a great deal, you know, in the 10 years that I was in big law. But I just noticed that there were so many mistakes that people made because they didn't have access and they didn't have the information or there was a lot

of misinformation, especially when it came to things like asset protection, like wills and trust in estate planning, how to set up businesses and how to run businesses. So after I was in the big law setting for all those years, I went in-house and I was the general counsel for a financial services company, so I got to learn kind of another side of the law but representing one client and learning a lot of different components there. And then in 2017, I started my firm, Young Law Group with my husband, who's not an attorney. He runs the business side. So we've been in practice since 2017.

As you mentioned, we're 22-time Best of Las Vegas, a winner in multiple categories, including estate planning, asset protection, elder law, long-term care planning, best woman-owned business, kids protection planning, pets protection planning, really any type of planning that you can think of that you need legal planning for, we provide those services. So we really are a full service firm. I absolutely love that story. So thank you for sharing. You mentioned that what you saw while you were growing up and that experience that you had with your father and the attorney taking advantage of it, how that shaped you. And it's just, it blows my mind how you took that, I'm sure, rather negative experience at that time, into something so positive. So kudos to you. Thank you. So you ended up at a big firm and then you decided to go into this specific niche. How do you go from at a big firm and then being very specific to helping people a state plan?

Yeah, I was always very passionate about community in making sure that people were able to make the best decisions for themselves. and I saw that one area of law that impacts all of us is estate planning, right? You know, there's not one person who's not going to be impacted by this type of this area of the law. And in my practice, when I was at the big law firm, my first experience with a pro bono case, I was a baby lawyer. It was a new lawyer. And I took on a case, and I was representing a client whose father had passed away. And she, you know, didn't have the resources to hire an attorney.

but there were assets in the estate that was supposed to be left to her. But there wasn't proper planning in place, although he did have a trust. It wasn't properly drafted. It was not funded, which we can talk more about, but funding really means retitling the assets, making sure that the assets are properly owned and held within the trust, common mistake that a lot of people make. So I learned so much about all of the mistakes that, you know,

everything that could go wrong almost went wrong with this case. And it was so sad for me to see this lady fighting with her family, you know, her dad's ex-wife, who was still a beneficiary, named on some of his assets who really shouldn't have been receiving the assets because the father and this wife were no longer together. But because he didn't review his plan, he didn't update it, he didn't properly title his assets. Everything that he thought he was doing right for his family, you know, fell apart when he passed away and his family had to go through court. Normally, if you have to pay for an attorney, it's very expensive. You know, easily $10,000 to pay up front for an estate planning, or sorry, a probate attorney to handle that. It's public. Probate is public, so anyone can go and see what assets are in the estate, who's receiving what.

Creditors are the first ones that are able to make claims, and the IRS is the first creditor. So paying taxes, whether it's to the IRS or other applicable taxes, you know, get applied or are addressed first, and then whatever's left would go to that person's errors at law, which may not even be the people that you want to receive the assets. And that kind of brings us back to that, the clients that you mentioned, where they were saying, we want everything to go to this specific child. Well, if they have multiple children or if there are, you know, potentially other, other errors, then it won't go that way unless you set up a plan to designate the proper beneficiaries.

Yeah. Wow. Okay. So let's dive into that. So first and foremost, let's talk about, oh my God, I have so many questions like I want to show them all at the same time. And this is why we have you on the podcast. Okay. So one of the things that Sonia and Thomas mentioned is they're really young. They're just, they're not even 30. And so everyone that I speak to, they're like, well, yeah, a trust and a will. They use them interchangeably. And then they always think that's for the elderly. So let's start with that. What specifically is estate planning and when should you start it? Okay, great questions. And there's so many myths around estate planning and you mentioned one of them, right, that it's for the elderly. So that's a really common misconception. People think, oh, I have to be older or elderly to necessitate an estate plan or I have to be very, very wealthy. I have to have a bunch of assets, and neither of those things are true. So if you're over 18, so if you are a legal adult, you really should have some type of plan in place, some form of a state plan.

Now, what is an estate plan, it's really, or what it should be is a comprehensive plan that addresses all of the possible contingencies that may occur in your life. So if you were in an accident, if you were hospitalized, disabled, if you were incapacitated, if you were incapacitated, and you couldn't speak to your doctors or make your own medical decisions or make your own end-of-life decisions or if you couldn't take care of your kids or your pets or, you know, you couldn't handle your financial affairs, who could go to the bank for you, pay your bills, what happens to your assets, of course, when you're no longer here. And, you know, you don't have to have a lot of assets. So assets are really anything that you own.

And common assets are, you know, real estate, bank accounts, investment accounts. stocks certificates, bond certificates, interests in businesses. So if you're a business owner, that's an asset, retirement accounts, life insurance, personal property, which can be anything else. You know, think of the things in your home like your furniture, jewelry, appliances, electronics. All of those are assets that you want to make sure when something happens to you that the right people have access to them and the right people receive them. So as far as who should have an estate plan, you know, just circling back on that, anyone who's over 18. So, you know, I'm in my 40s. So, of course, you know, I've got different dynamics than someone who is young.

You know, like my oldest daughters are 22. They're about to graduate from college. They're not married yet. They don't have any kids yet. They don't really have any assets yet. But they have other things that are important to them, like their decisions, right? You know, if something happened, if they were in an accident, who could step in and get access to their medical records? who could schedule appointments for them, who could handle those affairs, who could get access

to their social media. There's so many things that we don't necessarily think about when it comes to estate planning, and it's not just focused on assets, but really all of those other components that are dynamics are part of our lives. Yeah. Wow, that's amazing. You don't really think about so many things that you tapped on. You know, if you get in an accident and you're incapacitated to make a decision.

I know this is a real estate investing podcast, but But those are things that, I mean, they will benefit each other if you have something in writing, but you don't even stop to think about it unless someone like you points it out. So thank you to bring that to light. Okay. So now that we know who should get one, I always hear the infamous question, the difference between a will and a trust. And then I'll promise that we'll find a way to incorporate real estate into this because

the whole reason they were asking is, you know, how do we protect our assets? So we'll get to that. But tell me the difference between a will and a trust. Yeah, and that is a very important distinction. When people think of an estate plan, they many times think of a will or a trust or, you know, other things. So those can be components of an estate plan. And a will really just deals with the disposition of your assets. It really just says who gets what. A will does not keep your family or your assets out of court. A will actually volunteers your family to have to go through a public court process known as probate. So if you have real estate, which, you know, your clients do, if you have other assets,

those assets that are titled in your name are subject to probate. So a will becomes a public record because it has to be filed with the probate court. And once that probate is open, anyone can have access. It is completely public so anyone can go see what assets you, have in your estate, who your family members are, who your heirs are, their personal information, what assets they will be getting, when they will be getting them. So that is how a lot of predators will prey on people going through this probate process because many people don't realize that it's public, first of all, and that it can be avoided. So someone that many of your

clients might be familiar with is Tony Shea, who had actually a lot of properties. in Las Vegas, but also in other states. And he passed away. He was the former Zappos CEO. Had almost a billion dollars in assets. No estate plan died at age 46. Had no estate planning a place, not even a will. Even if he had a will, his estate would still have to be going through probate.

So I've actually been interviewed on the news several times about what's happening in that estate. And unfortunately, it's caused a lot of issues for his family. His family's personal information, so his brother and his father were appointed as the co-executors. Now it's just his brother who's continuing on, but his personal information where he lives, all of that is public. And there's a bunch of creditors that are making claims. Not only does the probate have to take place here in Las Vegas where most of his assets and real estate are located, but in every other state where he has real estate. So for those of you that have real estate in multiple states, if you don't have a proper plan set up, which includes a revocable trust, that's the way we can avoid probate.

So I'll talk about what a trust is. But if you don't have a proper plan and you've got real estate in multiple states, not only would a probate have to be filed in your home state, but any other state where you have real estate. So that's a really important thing to be aware of. So that's what a will is. A will does not keep you out of court. It has to be filed with the probate court, and then you have to go through that process, which is very expensive. Probate typically costs about 5 to 8 percent of the value of the estate. So different states have different thresholds for how much value would trigger a probate.

In Nevada, $25,000 triggers a probate. So that's embarrassingly low, and that's pretty standard across the board across the country. So if you have a house, for example, and the house is worth $200,000, even if you have a mortgage, you know, that's $175,000 or $190,000, it's the value of the house that dictates what it looks like and what is required as far as probate. So that's what happens if you don't have a proper plan in place. How you avoid probate and how you keep things private and how you protect your assets is through a revocable living trust. So what's the difference between a will and a trust? A trust really is considered a alternative to a will where you can actually keep things private. It doesn't get filed.

Whoever you want to receive the assets can have access to them immediately. You don't have to go through probate. You don't get hit with unnecessary taxes. So you're able to avoid taxes. You're able to avoid court fees, lawyer fees, all those other expenses of probate, administrative costs. and the people that you appoint within your trust can take action immediately. So when we talk about what a trust is, it's really an agreement, where there's three main parties involved. The first party is the grantor or grantors.

Those are the people or the person that create the trust. So in the case of the family that you mentioned, it would be the husband and wife, or the grantors. There's also the trustee or trustees. These are the people that manage the assets that make the decisions that have control, over what happens to the assets. And then the third party is the beneficiary or beneficiaries, the people that receive the assets. So while you're alive, if you've set up your own trust,

you are the grantor, you're also the trustee, and you're the beneficiary because you can receive the assets. Now, when you're no longer here, a new trustee called a successor trustee that you've appointed within your trust documents steps in to make sure that the assets are taken care of and distributed and provided to the beneficiaries in the way that you want.

And so that's kind of the basics of a revocable living trust. So the main protection of a revocable living trust is we keep things private, we avoid probate, we avoid taxes, we avoid all those other fees, delays, and intervention by third parties. Now, one distinction, I think you might have this question because a lot of people do is, you know, all right, well, can I protect my assets? When my assets are in a trust, are they sheltered from, like, if I get sued? So there's different types of trust, right?

Do you want me to go into that? I do. You're answering my questions without me, even asking them. So, yes, I do want you to go into that. Okay, so there's different types of trust, and the main vehicle that we use in estate planning is a revocable living trust. There's two main categories of trust, really, revocable and irrevocable. So with the revocable trust, what that means is you can change it at any time.

So you can amend it, you can change whatever terms. whatever provisions you want. But with a revocable trust, the main function as far as protection is we are able to avoid. We can completely bypass probate, keep everything private, your family doesn't have to go through court. Everything can be handled immediately and without the state, without the government, without anyone else intervening. And there are ways to shelter the assets and then create wealth and keep it within your family through generational wealth planning. So I can talk about that. So that's a revocable trust. It really is the centerpiece of your plan, and it should address the who, the what, the when, the where, the why, the how, of how things will happen if and when anything happens to you. Now, a revocable trust does not give you asset protection from creditors during your lifetime. That's where an irrevocable trust may be a good option for those people that are concerned about sheltering their assets. So with an irrevocable trust, there are many different types.

irrevocable trust, but the one that I'll speak to here, which would be most applicable to the audience, is what we call an asset protection trust. Nevada has actually the best asset protection across the state, and you don't have to live here to set up a Nevada asset protection trust. We actually have a lot of claims out of state that set up a Nevada asset protection trust because we have the best protection and the best laws, the shortest besting period. there are no exception creditors, which mean no creditor can come after these assets once they're properly in a Nevada asset protection trust.

Now, some of the differences between a revocable and an irrevocable asset protection trust are with an irrevocable asset protection trust, irrevocable really means that you can't change it. It's not changeable. But Nevada, again, has very permissive, what we call decanting laws that allow us to make changes. and there are a lot of provisions that we can include that allow for flexibility.

So it really is a great tool. We have a great tool here as far as that Nevada Asset Protection Trust. If you're wanting to shelter assets, if you were to get sued during your lifetime, if you were in an accident and someone made a claim against you, if you have a real estate property and you're renting it and the renter sues you for whatever reason or anything related to the property, that's how you can shelter from those types of claims. any lawsuit, any creditor, including the IRS, future divorced spouses, you know, those types of things you're able to protect with that. The structure is a little bit different. As I mentioned,

with an irrevocable trust, there are some limitations on, you know, what you can change and how you can change it and what assets or the amount of assets that you can actually shelter. But those are things that we can talk about more specifically. Got it. Okay. So let's talk really quick about just, on the surface, and I know this is such a broad question, but what is the actual cost of a revocable trust or irrevocable trust just to get it created and having that process done? What is standard? What is someone looking at? So it really depends on the type of plan you pick. So just one red flag to be aware of.

If you are looking to do your estate planning and you call a law office and you say, how much would it cost to set up a trust. And they give you an amount. If they quote you a fee, just right out the door, then that's a red flag because that is an indication that it's a cookie cutter form set of documents. So you really want to work with someone that is going to look at your specific situation, do an analysis of the assets that you have, of your family dynamics, of the things that are of concern to you, you know, asset protection or otherwise. So as far as the plan, that we do, our plans start at about $2,500, and they can go up from there, or they could be less, depending on what type of plan you pick. So that's where we do comprehensive planning. It can include

a trust, a revocable trust, plus all of those ancillary pieces like health care directives, living wills, hipper releases, medical powers of attorney, financial, durable powers of attorney, kids protection planning, pets protection planning, all of that can be included with the planning that we do. So that's where the revocable, you know, the foundational plan plans start with us. That is a perfect answer. Just what you said at the very beginning. If you call a law office and they quote you, that is very cookie cutter. So or our listeners, most of our listeners are real estate investors. There's nothing cookie cutter about them. Most of them. Just the average person, just the fact that they have real estate investment properties, that's already not cookie cutter. So that's a perfect.

answer. Okay, so let's go back to that when you talked about the difference between a revocable living trust and an irrevocable one. And you cited laws in Nevada, which I absolutely love. This is one of the reasons why I moved to Nevada. I was born and raised Californian, but I moved to Nevada because of so many benefits. And I've heard the law here, and I understand a little bit of it, just because I live here now. But what happens to those investors, which is 99% of my listeners, they are not in Nevada. They are out of state. But, you know, you always hear that ad, you know, open an LLC in Wisconsin or go do a trust in Florida or, you know, whatever it is. How does one, first and foremost, decide, okay, I don't live in the state where I own property.

A lot of my clients live in California. and they own properties in Memphis, Tennessee or in Birmingham, Alabama. How does one go about that as far as creating a revocable trust or an irrevocable trust when they live in one state and own real estate in another? So you're going to want to set up a revocable trust where you reside. And even if you have other properties in other states, those properties can be held within the trust that you have, you know, that's based in the state that you, that you live in. So if you live in California and you have properties, you know, in Texas and Florida, that California,

you know, you could set up a trust that's based in California where the site is California, that's what we refer to it as, and the applicable, you know, laws according or as far as the other documents that you have, maybe California specific. But those other properties, no matter where they're located, can be titled in your trust. should be titled in your trust. Or another way to take title is if you've got an LLC set up, you could have your property or properties titled in an LLC, and then the LLC can be funded or put into the trust. So there's a lot of different ways that you can hold title and have it ultimately held

and protected within your main plan, within your trust. And you brought up another good point, Mercedes, that a lot of your clients and a lot of listeners are located all over the country. So even though we're based in Nevada, we work with clients that are located in all the other states. And this is one of the silver linings of the pandemic, is that now there's this whole new virtual world where so many things can happen virtually instead of, you know, the traditional way of doing things. And the way that our firm is set up is we work with a lot of clients that are located outside of Nevada. And there's different ways that we can do that. We can co-counsel or we can refer clients to attorneys or law firms that may be, you know,

located where they're located. A lot of times clients are preferring to work with our firm because they're familiar with us or their family or friends have worked with us and we get those relationships there. And if that's the case, we can do everything virtually. It's such a great opportunity that we have now in the time that we live in. And so we can do planning, you know, from start to finish virtually. I'm not licensed in every state, but I do have co-counsel where we're able to have those plans reviewed for state compliance so that we're making sure that everything is working within the confines of where the clients are living. Yes, I know. This is I did my research. And this is why I invited you on our podcast because I needed to make sure that you were going to be able to serve everybody across the country. So for our listener, we'll include all of Shane's information in our show notes so that you are. able to reach out and then we'll have you give your information at the end of this podcast. But I'm still not done asking you questions. So let's go back to you brought up the whole LLC

versus a trust. And I get that so often. And one of the things that I am a huge advocate about is I love to help people build wealth, maximizing leverage without over leveraging themselves. So many of my listeners will purchase a turnkey property with a Freddie or Fannie loan because they only have to come in with 20% for the down payment. And as such, they buy the property in their personal names. So in that case, what is the best way for someone to purchase a property maximizing leverage in their names with 20% down and then protecting their assets. Do they then create an LLC and then have the LLC owned by the trust? Do they create the trust and create an LLC? Like how does someone maneuver that to the best of their ability, especially when they're just getting started when my investor only has, you know, two or three

properties or maybe even their first? So I have to be careful because I can't give legal advice, you know, I have to be careful about the information that I'm sharing, so it doesn't constitute legal advice. This is informational, educational. I definitely recommend that you consult with an attorney for those of you that are interested in learning more about this. But there are different ways, you know, just try to answer your question, Mercedes.

There are different ways that you can leverage the resources that you have. So many people will set up an LLC for different purposes. So it might be for real estate investing, right? That's a very common purpose of having an LLC so that when you are engaging in those activities and those investment activities and purchasing property and holding real estate, the LLC can be the one ultimately that the title is under. Now, one reason that you might want to do that is because with an LLC, you have limited liability. It's a limited liability structure.

So you want to be careful about how you set those up, though, because a lot of times people will go and they'll do, you know, like the, they'll do a filing with a secretary of state, or they might think that they have something set up as an LLC, but they're missing the corporate documents that they should have. So there are certain corporate formalities that you have to abide by in order to really get the liability protection of an LLC. But the purpose is it's a business entity where you can put assets and hold assets so that it's, If someone were to see you related to that business, they would be limited to, you know, the assets of the company, and they would be prohibited from what we refer to as piercing the corporate veil. So if someone is able, someone has an LLC, but it's not set up correctly, and they engage in certain business activity,

their sued related to such activity, not only could that claimant come after their business assets, but they could pierce the veil and go after their personal assets as well. So that's another reason why layering, there's different layers of asset protection. So one layer would be having a properly set up LLC. You know, the ultimate layer is what we were talking about earlier than Nevada Asset Protection Trust. So you can, as I mentioned earlier, have an LLC. The LLC can hold the property and that LLC can then be put into the interest in the assets of the LLC can also be put into your trust, whether it's an irrevocable trust or a revocable trust.

Similarly, you could take the property and put it directly into your trust if you don't have an LLC or you don't have the desire to set one up. You know, when you have an LLC, there are certain things, as I mentioned, that you have to make sure you're meeting the requirements of there are annual filings and fees that are due. So, you know, that's where you want to kind of look at your specific situation, talk to an attorney, get that guidance to be able to see if that's something that would be right for you. Now, you asked about being able to hold title and leverage the property and also protect the property from having to go through probate. So even if you don't have an LLC, and you could still set it up where you've got the property titled in your revocable trust.

So the revocable test is what allows us to keep the assets there, pass them to our family members without getting hit with capital gains taxes, other potential taxes, state taxes, state estate taxes. Some states have a death tax that gets applied if it's not passed, you know, past a certain way or passed within a trust. Federal estate taxes, so there's lots of things to consider, but you would be able to leverage those different resources. depending on what's important to you and how you want to structure things, whether it's within a trust, straight up in a trust, or through an LLC and then funding the LLC to the trust. Got it. Wow, that's a handful. And yeah, Shane did mention this is not legal advice. We're just having a conversation of what could happen and just information for you. So thank you for bringing that up. So Shane, I have a lot of clients that are full-time something else. They're busy on. entrepreneurs, they have their own businesses, they're in the medical field, doctors, nurses. I have several lawyers as clients. And they need to be ambiguous about the assets that they acquire. So they come on board, they buy a couple of turnkey properties. And then they come to me and they say,

Mercedes, should I put this in an LLC? Should I put this in an irrevocable learning trust? And that's when I say, here, call my legal team. So how do you decipher as an individual, what is going to be a better play as far as being ambiguous and offering asset protection? Okay, that's a really good question. I come up with them every once in a while. Really, really good question. Well, that's what happens when you're an actual real estate investor like I'm asking for selfish

reasons. But, you know, over 100 rentals, you have to find a way to get creative. But yes, how does the average person figure that out? So there's different ways, of course, of how you can take title. So I'm going to start with if you have a revocable living trust. With a revocable living trust, it doesn't get filed anywhere. So the trust itself is not public. So how things are set up and laid out within your trust are not available, you know, to anyone else.

But you do want to keep in mind, that when you do record the deed in the name of the trust, that is a public record as far as the name, right? So sometimes when clients, you know, the very typical type of client that we have, they don't have a ton of assets, but they are concerned about anonymity, then one thing that they can do,

even if they only have a revocable trust, is they can not have their names be in the name of the revocable trust. So the typical naming convention with a revocable living trust would be, you know, your first and last name, Living Trust, dated March 18th, 2023, or whatever the date is that you sign, the documents. So yours could be, you know, the Mercedes-Torres Living Trust, dated March 18th, 20203. Now, when you have the trust name like that and you record the deed in the name of your trust, then your name is there, right? Because your name is in the name of the trust.

So if someone is searching those deeds and, you know, assessors or recorder's office website or records, then that name can pop up. So sometimes clients will do something a little bit more anonymous. So we've had all different types of names. Clients name their trust after their pets, after their businesses, sometimes after their kids, after the street that they grew up on. So that's one way to have a little bit of anonymity. Now remember, though, with the revocable living trust, if you were to be sued, then, you know, those assets could be subject to be taken away. They are within the reach of creditors. Now, if you have an irrevocable trust, that gives you more distance, you know, from you as the individual, right? And we typically don't have your name as the name on the name of the irrevocable trust. It's usually something else. There's also a separate tax ID number that we can.

get when we set up an irrevocable trust. So it has its own EIN, so it's not tied to your social, like how the revocable trust is. And just another thing to point out, with a revocable living trust, you don't have to worry about doing separate tax returns or creating any other type of, you know, there's no additional maintenance necessarily that has to be done as far as annual, you know, fees or things like that. Although you do want to review it regularly. So that is something, that I will make mention of you want to review and update your plan because things change. You know, your life changes, the assets change, the laws change. But as far as doing an annual filing or tax filing or tax return, you don't have to do that with a revocable trust.

With an irrevocable trust, however, there are requirements like that. So that is something to keep in mind. So that's one way if you're kind of different ways to establish some anonymity or be more anonymous is to not use your, you know, your personal name in the name of your trust. Another thing, you know, we talked about earlier was having the property be titled in an LLC. So if it's in the name of an LLC, again, you know, that's not going to be your name. So when, if it's the ABC LLC that you have that holds title, it would be ABC LLC that shows up in the real estate records. I absolutely love that.

I didn't realize I can have a trust called the snowball effect and no one's going to be. By the way, that's not the name of my trust, but that's amazing. That's great information. Okay, you talked on something really, really important because I often talk about many of my clients set up LLC. There's just a myth out there, especially with my relatively newer investors that everyone needs to set up an LLC before they start doing real estate investing. And I always think I started real estate investing. I had a terrible credit score. I had no money and I bought my first property and I did just fine. And so when they do set up their LLC, they usually set it up and then don't even know what they're setting it up for. And then it's set up in like a template type of a thing that you've mentioned earlier. And then, for example,

they set it up in California, but then they buy a property in Kansas. City, Missouri. And so now they have to register the LLC in Kansas City, Missouri because they put the property that they just purchased into that LLC. And so now they have to file taxes in California, as well as Missouri, because that's where the asset is actually living. So having said that, you mentioned that you don't have to file separate taxes when you do an irrevocable living trust. So is that accurate? You don't have to register it in each state if you hold properties in different states other than the state that you live in? I'll clarify that point.

So I was referring to having to do a separate tax return when you don't have to do that with a revocable trust. So with a revocable trust, because it's tied to you, you know, your social, we don't set up a separate EIN number. So we don't have to do any separate tax filings, things like that. with an irrevocable trust, it does have a separate tax ID, and there are filings that need to be done specific to the trust itself. Now, with real estate, you know, each state has its own, there are very state-specific laws, you know, that are applicable. So I can't answer all of, you know, what happens in every state, but you do, as you mentioned, you know, if you've got property, or you've got an LLC that's established in one state,

and then you have assets like real estate in another state. Sometimes it is required that you do have like a foreign registration or some type of filing there because each state, you know, that state where the property is located is going to want to collect, you know, taxes and things like that, other fees, right? So it can be a little cumbersome, but that's why you want to be, you want to work with someone, and you want to be guided by the proper professionals to be able to make sure that you are setting things up to your advantage

and that you're not subjecting yourself to unnecessary fees or unnecessary taxes, unnecessary filings. So you really want to make sure that you're not just, you know, so many of us start doing things and we try to figure things out along the way and hope that we're doing things the right way. Sometimes it works out and a lot of times it doesn't. So this is where you should really, you know, at least utilize their resources that you have, but also going back to your initial question, you don't have to set up an LLC before you start your real estate investing or creating a portfolio, right? So I definitely would tell people that are wanting to make investments. You know, don't let setting up an LLC be what keeps you from pursuing those types of endeavors

because, yes, an LLC may be a good option. You don't have to have it set up in order to start the process. process. So, you know, people start and do things in all different types of order. So, you know, there's no one, one size, you know, fits all type of thing. Yeah, there's no one way to do anything, but in order to do something and make a difference, you have to do something different. So I always kind of say, if you're doing something and it's not producing the outcome that you want, then do something different. And it may produce results. So there you go. Okay, I'm going to stop asking my barrage of questions, but there's one thing I just kind of wanted to clarify in the back of my mind, because this irrevocable trust situation, it's what I do. But it's one of those that I feel it's the best for just me and real estate investors in general. Just because if you are a real estate investor, you are adding things, you're buying things, you're selling things. You might refinance.

things. And so I want you to share with me what would be a drawback of an irrevocable living trust. Yeah. So one of the drawbacks is that with the, and I'll speak to the Nevada Asset Protection Trust more specifically because each state, some states have domestic asset protection trust that you can set up. So like California has a domestic asset protection trust. However, each state has different restrictions and different ways that they require these types of trust to be set up in their state. So this is why, as I mentioned earlier, that a Nevada Asset Protection Trust is very attractive to people that live outside of Nevada because you don't have to live here to set one up. That's number one.

You can live out of state but still set up a Nevada Asset Protection Trust. And the reason why people do that is because we have one of the shortest or these shortest, statute of limitations periods where once the assets basically you can set up a trust, put assets in that trust and they are protected from basically day one. But there's a two-year statute of limitations which basically says that creditors cannot make a claim after the assets have been in your trust for two years. So it basically blocks creditors from being able to make claims. And when I talked about creditors also, certain other states have creditors where they allow them to have access even with an irrevocable trust to be able to take assets from a trust like that.

For example, if you owe alimony or if you owe taxes or certain types of creditors are able to pierce that veil, in Nevada, there are no exception creditors. So that's another benefit of setting up a Nevada asset protection trust. As I mentioned earlier, the laws here are very trust-friendly. They're very business-friendly. And so there's a lot of flexibility when it comes to that. But what are the drawbacks of an irrevocable trust? One of the drawbacks is that it does have certain requirements, right? So one of the requirements of setting up a Nevada asset protection trust is that you have a Nevada trustee.

So if you don't live here, this is very common. You know, we have clients that live in California, for example. They can be, you can still be the investment trustee where you are directing the, you know, what is happening as far as the assets and how they're being invested and, you know, when and what you do with those assets. You're still, you can still be in charge of that. We call that the investment trustee or even the family trustee. But there has to be what's called a distribution trustee. And the distribution trustee, there has to be a Nevada trustee. So whether that's someone that lives in Nevada,

it could be an independent trust company, Nevada trust company. So there are different ways to satisfy that requirement. With these independent trustees, there are fees that you pay to have them as that trustee. And the role of the distribution trustee is really to facilitate when assets are going in or out, making distributions out of the trust. So one of the requirements is that, any assets that you have in the irrevocable or the Nevada asset protection trust, you can't basically put 100% of your assets over there.

You can't shelter 100% of your assets, right? Because the government doesn't want to allow you to do that. So you can put assets in there as long as the assets that you have in there, you have enough assets outside of the trust to be able to pay your bills. So you cannot become insolvent by putting too much in the Nevada assets. protection trust. So that is one of the requirements, you know, I should say, you just have to be aware of these things, you know, and so you do have to work with, you know, you don't have as much flexibility as you do with a revocable trust. You have to have that distribution trustee. You have to be

cognizant of the assets that you have in the trust, you know, on the distributions that you're taking out. You don't want to use the Nevada Asset Protection Trust or the irrevocable trust as a piggy bank, right? You don't want to use it as an ATM where, you know, you put stuff in and they're constantly taking it out to pay your bills and, you know, maintain your monthly expenses and things like that. The good candidates for assets that go into that type of trust are things that you don't really need. Like if you've got investment accounts or other investments, real estate, business interests, you know, those are assets that you can tuck away and then the other assets that you need to live off of, you know, like your normal bank accounts, the bank accounts that you pay your bills out of, you know, that type of thing,

then you keep out of the irrevocable trust and in your revocable trust instead. Got it. That's such a kind of guidelines. Yeah. Yeah, that's such valuable information. Okay, I know we are running out of time, but you so graciously offered my listeners a little perk just to help them out with identifying what is best for them as far as, you know, what to create a will, a trust, an irrevocable trust, or even an LLC. So do you want to share that with our listeners? Sure, yeah. So all of you that are listening and that anyone's that's, that is part of this organization, this group, is entitled to a complementary family wealth planning session. So that's where we talk about, you know, where things are as far as your assets, what your family dynamics are, what your specific goals are. So any questions that you have as far as, you know, how to set things up, we'll talk through that. I'll do an analysis. I'll make recommendations.

You'll be able to pick your plan that you want to do. So there's no fee for the session. I will waive that session fee normally it's $750. So I waive that. You'll get that complimentary. It's a private one-on-one meeting with me or one of the attorneys in my office. So that will be complimentary. The only fee that you would pay is for any planning that you decide, you know, that you want to put in place.

So that is the offer that I will make to all of the listeners and the audience out there. Plus, you will receive $250 off any plan that you pick. So that is an extra bonus. I will give you a resource where you can get more information. And this is something that I ask all of the people that are scheduling sessions before they come in, before you come in for a session, I ask you to watch my on-demand webinar. So that will prepare you for our session. It goes into a lot of the details that you'll be interested in about how to set things up

and how to avoid common pitfalls, common mistakes. So that website where you can get access to that on-demand webinar is Young Lawyer. So young law live.com. So young law live, l-I-V-E.com. And there's an on-demand button or it's slash on-demand, Young Law Live slash on demand, where you can get access right there on my website to the 60-minute estate planning 101 webinar that I have available.

So you all have access to that. Please watch it. Please share it with whomever you like. You're free to share it. And then you're also able to schedule that complimentary session. And also I'll give you my direct email. That's a great way to get a hold of me. It's Shane, S-H-A-N-E at Younglaw-N-V-L-N-V-N-V-N-V-V-com.

So, Shane at Younglaw NV. Yeah, so please make sure that you include when she says, how did you hear about us? You say, I heard you on the epic real estate investing podcast. I will attest to Shane. She is very responsive. Her team is utterly amazing. I'll include all of this information in the show notes.

So if you're driving, please do not wreck just to take the information down. It'll be in the show notes. But I will say she is amazing. She has all of these accolades for a reason. And I definitely encourage you to benefit from that webinar. I've watched it. It is one hour of just valuable information at the very least seek the knowledge and then reach out to her. She's giving you a complimentary session and just

say that you heard her here at Epic. Shane, I know you are very, very busy. It took us a minute to get on together. So I appreciate your time. There are no words just for what you do. I know that you and I spend a lot of time educating because just financial freedom and asset protection is really important to both of us. And I really, really want to thank you. So thank you. Oh, I appreciate it. It really is an honor. And I thank you for inviting me to be on the show. You're so welcome. So ladies and gentlemen, you have all of our information. If you want to send me an email, specifically to Ask Mercedes. You put Ask Mercedes in the subject line. And my email address is Mercedes at Epic Real Estate.com.

That email comes directly to me. It is not handled by my assistance. But feel free to ask a question or if you want more information about our turnkey properties, go to cashflow savvy.com. That's savvy with 2Vs where we have all of our rental inventory available and all of it, cash flows. Have a great week. Make it epic.

And don't forget that Mercedes and Shane are here to help you create financial freedom. in your world where a cash flow is king. And that wraps up the epic show. If you found this episode valuable, who else do you know that might too? There's a really good chance you know someone else who would. And when their name comes to mind, please share it with them and ask them to click the subscribe button

when they get here and I'll take great care of them. God loves you and so do I. Health, peace, blessings and success to you. I'm Matt Terrio. Living the dream. Yeah, yeah, we got the cash flow. You didn't know home world. Okay, only 10 more presents to wrap.

You're almost at the finish line. But first? There, the last one. Enjoy a Coca-Cola for a pause that refreshes. This podcast is a part of the C-Suite Radio Network. For more top business podcasts, visit c-sweetradio.com.