Bruce Mack - Funding, Asset Protection, and Tax Mitigation Strategies for Business Owners

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You know, one of the biggest questions I get on the show is what exactly goes into a business exit plan and when should I start creating mine? Well, I always tell people that the best time to start was 5 years ago, but the next best time is now because you never know when you might need it. So we put together a free report that describes what an exit plan is and what you should know. You can get it free by texting exit plan with no spaces to 44222. That's exit plan to 44222. Again, text exit plan to 442-22. Welcome to the Exit Coach Radio show, the show for baby boomer business owners who are looking for cutting edge information as they plan their 3 to 10 year business succession and exit. Every week we interview top professional advisors for their best tips, strategies, and precautions so you can be well planned. And now here's your host, the exit coach Bill Black. Hi everyone, everyone, it's Bill Black, the exit coach from the Exit Coach Radio show. You know, one of the biggest questions I get on the show is what exactly goes into a business exit plan and when should I start creating mine? Well, I always tell people that the best time to start was 5 years ago, but the next best time is now because you never know when you might need it. So we put together a free report that describes what an exit plan is and what you should know. You can get it free by texting exit plan with no spaces to 44222. That's exit plan to 44222. Again, text exit plan to 44222. Welcome to the Exit Coach Radio show, the show for baby boomer business owners who are looking for cutting edge information as they plan their 3 to 10 year business succession and exit. Every week we interview top professional advisors for their best tips, strategies, and precautions so you can be well planned. And now here's your host, the exit coach Bill Black. Hey, welcome everyone. Thanks so much for joining me once again today. Pleasure to have you with me. I have an interesting lineup of guests as usual today. We're going to be talking about various topics surrounding business ownership and preparing for the future of your business. My first guest today is Bruce Mack from Platinum Group, where he's the president and co-founder. That group is located in Woodland Hills, California, and they provide funding, asset protection. And tax mitigation for business owners and real estate investors. And Bruce has some interesting topics that we're going to be bringing up today. So Bruce, welcome to the show. Thanks so much for joining me today. Well, thanks a lot for having me. I'm, it's a pleasure. The pleasure is all mine. Well, terrific. Well, thank you. Uh, you know, uh, you have some interesting um. A topics to talk about some types of special trusts that you've put together to help business owners, and I know you help business owners in many different ways surrounding financing and getting started with their business, but also growing their businesses, and I think that might be of interest to our owners today. So before we get into all that, Bruce, tell us a little bit about you and Platinum Group and your background and how the company began. I'd be delighted to. We have two divisions. One is our trust division. And the others are funding or financing division. Uh, I'm a licensed financial advisor, been a very active real estate investor. In a 3-year period of time. I bought rehabbed and flipped over 160 properties, been involved with over $92 million worth of real estate transactions, um, speaker as well as author, and work on a national basis. Uh, and my credo is that we just, we really want to help people. Achieve their financial goals and their financial dreams. Uh, that's what I feel that my role is, and I do whatever I can to make sure that we fulfill exactly that credo. Uh, and the platforms that I've chose, uh, chosen over the years to be able to get the, this to come to fruition. is both a funding platform as well as an asset protection and tax mitigation platform which the trusts provide. Those are very hot topics these days, obviously, as more and more business owners are concerned that they might get sued for something or something might go wrong along the way either while they're running their business or after they sell it. And so where would you like to start? Would you like to tell us a little bit about what how these topics work? Let's just pick one and go with that. Let's let's talk about the asset protection and tax mitigation benefits of your, you have a unique specialized business trust. Why don't we start with that, just a quick overview from the 30,000 ft level. What's it all about? Sounds great. So let's take a deeper dive. Uh, first of all, he gave me way too much credit, uh, on, on the trust a moment ago. We work with directly with the law firm who really deserves the credit. Um, they Came up and were the brainchild, uh, to come up with the uh trust back in 1999. There's roughly 31,000 of these proprietary and copywritten trusts out there. We actually hold 58 copyrights, uh, so that the trust has stood the test of time and it really was created for two specific reasons other than The traditional ones that a living trust would be created for, living trusts are created for probate avoidance, and also for, uh, wealth transference, i.e. naming who your heirs are. But these trusts not only have those foundational precepts, so they do take care of both of those, the probate avoidance and the wealth transference. But as importantly, they, and maybe even more importantly, there's two other key, if you will, principles that the the trust answer the question to, which is 1, asset protection, and 2, tax mitigation. So I'll break those down for a moment. In order for a trust to be bulletproof, it really needs to have a non-grant or an irrevocable status as well as a spendthrift status. And the way that we've, we were awarded the copyrights is because the proprietary fashion, the way that we have woven all of this together. So, we've heard of the Rockefellers, the Carnegies, and, and the Kennedys, and we all know that these people all have trusts, and they have created trusts. To be able to, well, uh, Nelson Rockefeller said it best, uh, We all want to and need to be able to control everything. The goal in life is to control everything, but to own nothing. And in principle, that's exactly what happens with one of these trusts. It's like what I call a big boy or a big gal trust, where we are protecting the assets so that in the event of suit, because you own nothing, A leaner judgment cannot be executed. To be able to get assets that you don't have, which is great. Now that does not mean that you can't control them, i.e., having the ability to have a car. Have a plane Have whatever material assets in terms of the utilization or usage of those assets, but not the contingent liability that's associated with owning them. And the same thing is true with property. So many of our clients enjoy, uh, the ability to control 1020, 50, 100, 200 properties, but not the liability that God forbid something happens at one of their rental properties. That they're going to get their short suit off and be involved with millions of dollars' worth of litigation, uh, potentially that they could lose. So we offer titanium vault asset protection. This is the only way to fly, so that when somebody goes to sleep at night, they have the assurance that they're, everything that they worked so hard for over their career doesn't get wiped out. At the snap of a finger. So that's one piece of the equation. The other piece of the equation is the tax mitigation component. Now pursuant to 643, the IRC, that's Internal Revenue Code, we talk about the fact that Long or short term capital gains and or Lease and rental income can be deferred. In perpetuity That goes into the trust. And structurally, when we have business owners, there's uh a way that we work with the business owner so that we are selling assets of their LLC, and, and or converting their S or their C to an LLC and then selling assets again to a business trust, which then would have the beneficial trust. be the beneficiary of. Now, again, I'm getting deep in the woods. But what we're saying is, is pursuant to 643 of the IRS tax code, that which stays in corpus. Can be deferred in perpetuity, and the laws of perpetuity say that the trust is not distributed until 21 years after the last of the beneficiaries deceases and the last of the beneficiaries's heirs. So applying sense and logic, everybody in the family line is gone at the time the trust distributes. So the question becomes, can I access funds from the trust? Absolutely, it's trust expenses, because the trustee, which invariably would be, uh, is our client. They have full discretionary control over the trust. The only thing that then becomes a taxable distribution going forward in their business or their personal life, are what I call the three Fs, food, fun, or fashion. So when we peel back all the layers of the onion, our typical client. Notwithstanding W-2 income, because the W-2 component, if there is one, there is no tax mitigation on it. But if it's not W-2 income, Stocks, bonds, bitcoins, uh, being a, a small business owner, uh, of any type, real estate investors, uh, doctors, lawyers, Generally, we're seeing somewhere between a 75 to a 90+% reduction in the annual payout on a client's tax bill because the rest of it is deferred out. This is huge. And when you apply to the equation, the ability to now have much more capital to be able to use and earn compound interest with. This can be a complete game changer for so many people. Absolutely, yeah, you're taking, taking back control the The LLC concept we've had many conversations about this is attractive, especially if you are being attacked because the LLC comes with a spigot where you can turn off distributions, correct, as opposed to the S Corporation that so many small business owners have that requires distributions to shareholders on a pro rata basis. So that's very, that's very attractive. Is this Is this trust concept. Widely known, would people expect to be able to talk to their existing attorneys, or it sounds like it's a specialized structure that they need to go again through people that have, as you mentioned, trademarks and copyrights on this type of trust structure. Wow, I think there were 5 questions in there along with some of the statements. Well, let me back up, the main, the main question was where people, great stuff. What would people expect to talk to their their regular business attorney, they probably wouldn't find this information. By just talking to someone, I'm sure our listeners are wondering why hasn't my attorney told me about this. Well, and you know, and I do get that question on a, on a very consistent basis. I, I've never heard about something like this, and, and yes, you also not heard about the structure and the interworkings of the Rockefeller, the Carnegies, and, and Uh trusts because these are not advertised items that you're going to hear about, uh, on an, on an ongoing basis. Conversely, uh, quiet and very quietly, the law firm that we work with put this together with a collaboration of tax attorneys and uh. Uh, with the collaboration also of enrolled agents with the IRS, which we, we have tax attorneys, we have enrolled agents with the IRS. We have CPAs. We have folks with masters in taxation that all work with us on staff, um, and likely. The case is that the person, uh, the person who we encounter, who is working with their uh specific professional, will not know about our trust. Um, realistically, most of the attorneys, or most of the CPAs, I should say, that are out there, uh, use the 5 and 60 or 400 and 500 series codes. That's what they got taught. That's what they're familiar with in school. And it's just like a, a doctor who can diagnose where there's 10 other doctors who has not been able to diagnose, but because this doctor. was insightful and took his extra years of experience to come up with the correct diagnosis. Um, it's little known, but it's out there, and it's for people to be able to become aware of, have the advantages of being able to get, uh, get involved to help them. In terms of asset protection, as well as the tax mitigation component, if in fact their type of income fits the mold. It's not right for everybody, and it's in as much as there, if somebody has W-2 income, I'd be the first one to say, listen, that the trust is still right for you from the asset protection. Uh, capability or uh uh piece. Because if you've got 100 $200,000 or more dollars worth of equity, and you get sued in your house, uh, and you strictly own a primary residence, that's your largest single asset, and it could be gone. Very, very quickly, if somebody came against you, you got into a bad car accident. I'll tell you a very quick short story, if I may. And it's about a lawyer. And this is, this is the exact type of scenario that really kind of ties up, uh, uh, your point. I have a dear lawyer friend. Known the guy for many, many years. He did not have a trust. He's a family lawyer, got into a very bad traffic accident. Uh, it was his fault. On the other hand, he was not drinking or anything like that. Uh, he got tagged for a $3 million umbrella. Now, he did not have to come out of pocket for that. However, The judge awarded the plaintiff a $250,000 punitive damage award on top of the umbrella, and he had to pay that out of his back pocket. Now, luckily Steve had the funds to be able to weather that financial storm, but I beg the question. How many people would not be able to weather that storm and it would literally put them on the doorstep of bankruptcy. Now, if he had Gotten a trust. The type of trust that we're talking about, this kind of unfortunate situation would have never gotten to where it got to. Right, yeah, you never know. And you know, I think I was going to say a lot of our audience are small and mid privately owned business owners. They're not necessarily small businesses, but they're, they're, you know, they're, they're doing well and they're thinking about their exit planning, right? That's the, hence the exit coach radio. But what's what's happening when we survey large numbers of business owners, we find that most of them. I would love to sell to an outside buyer, but the problem is most people that go to an outside buyer or go to a M&A or a business broker find that they're not, they're not attractive enough. They're not going to win the sale, so they need to kind of Have a second strategy to hold on to their business, maybe wind down a little bit and certainly figuring out ways to protect the asset, the golden goose, if you will, and, and protect your income and pass it on maybe to family members or key employees without that high risk of losing it all along the way due to somebody doing something. That causes a lawsuit is very is a very attractive strategy. So that's my point for our listeners is. You know, you can, you can talk to your attorney, but usually we find most attorneys are so busy putting out fires that they're not up on some of these strategies. So that's where people like Bruce Mack come in with Platinum Group to be able to really help you dig in. And learn about some of these specialized strategies. And Bruce, when, when people contact you, what are some of the first, what are some of their basic needs when they contact you? What are some of the first things you hear from people when they say, Bruce, I need to talk to you because what? Because I'm not sleeping well at night, and the reason I'm not sleeping well at night is I hear so many, there's so many predatory lawyers out there. Heck, there's 91,000 PI lawyers out there that are all looking to potentially get into your back pocket and they're willing to take cases on contingency, uh, to be able to, to, to be able to enrich themselves. And it's an unfortunate situation, uh, that, that, uh, There's never enough good uh lawsuits to go around, and they're always shopping for another well to dig to be able to uh uh follow up on. So the, one of the key concerns is how can I protect myself and everything that I've worked so hard for. And another concern is, is I'm, is I'm getting killed with my taxes. I'd like to get a review and see if there might be some additional strategies that we can implement that are cogent, that makes sense, that can help me mitigate some of the liability that I have been incurring on an ongoing basis and also. Let me also, I, I totally concur with what you're saying about a wind-down strategy, uh, when you're talking about people holding on to their businesses longer, uh, because, because they, they are, uh, not selling them, and maybe. There are some listeners out there that this could be a really good wake-up call to because one of the other things that I hear consistently is, I would sell my business today. We're in a good economy. Now's a great time for me to check out. However, I was told from my, uh, CPA or my accountant. That I would get crushed for hundreds of thousands of dollars worth of taxes. When I precipitate the sale because it would all be long term capital gains and That would be correct. Traditionally, but if they had one of our trust vehicles, All of that gain from the sale of the business goes into corpus of the trust. And therefore, is deferred out. This is huge and could be a game changer for some folks who are looking to move on and enjoy their years and but not get crushed. When they sell their business. Well, asset protection and tax mitigation are always in season, and you're always welcome to come back and, and we can get deeper into some of these. Thank you for listening to Exit. Would you tell our listeners the best website and what they can give a free complimentary consultation as well. Could you explain your offer for us? Sure, of course. Uh, we have two different websites. Please visit either one, and We have our platinum Trust Group.com website. And Please feel free to go on there and book a one-hour complimentary consultation where we can explore the specifics with your situation and see if it's a good fit. It's not right for everybody. Nothing is, but it might be the perfect scenario, uh, for you. That's on the trust side of the equation. The other side of the equation is our funding, a division. Uh, where we have, uh, programs that actually, uh, we even have one program that is, that features a 0% APR for up to 21 months for working capital that does not require collateralization. It's a great program. We have term loan programs, uh, even for, uh, folks that have, as I call it, uh, um, Stressed out FICOs, some 600 FICOs, uh, and we have a myriad of other products where we have private money lenders for projects and developments, uh, up to 50 $75 and even $100 million. So, We've got a, a myriad of funding, uh, products, even transactional, uh, funding. So if funding is an issue and you're looking for startup capital or existing or capital for your existing business, uh, please go on to platinumfinancing Group.com and you can book for an appointment there. So, and if it's both, just book on the trust site. OK, Platinum Trust Group, Platinum Trustgroup.com. You're going to find some interesting information there. Bruce Mack, thank you so much for joining me today, and I look forward to the next time we speak again, we'll have you back real soon and And go deeper on some of these very interesting topics. And again, thank you so much for the opportunity to speak with you and speak with your followers. This podcast is sponsored by TalkSpace. May is Mental Health Awareness Month, and TalkSpace, the leading virtual therapy provider, is telling everyone, let's face it, in therapy by talking or texting with a supportive licensed therapist at TalkSpace, you can face whatever. is holding you back, whether it's mental health symptoms, relationship drama, past trauma, bad habits, or another challenge that you need support to work through. It's easy to sign up. Just go to talkspace.com and you'll be paired with a provider typically within 48 hours. 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