Episode 2: How A Trust Strategy Can Keep Wealth in the Family for Generations
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[00:00:00] Hello friends and family. Welcome back to the Keenan Roberts Advantage, where we discuss how families and business owners tactically grow and preserve wealth for generations to come.
This episode is brought to you by AssetSmart. And today we're breaking down how a trust strategy can keep wealth in the family for generations. Now, before we go deep into today's episode, I want to take a step back and answer a question that a lot of you might have.
Who am I and why should you listen to this podcast?
Let's talk about it. First, let me introduce myself properly. My name is Kenan Roberts and I specialize in one thing. Helping business owners and families protect wealth in ways they never seen or knew existed.
along with my partners, I run a trust company that focuses on protecting assets from creditors, lawsuits, and unnecessary taxes, and structuring wealth in a way that ensures control stays within the family, without the government red tape, or unexpected financial [00:01:00] disasters.
But I wasn't always in this position. Like many of you right now, I started as someone who was simply just trying to figure stuff out, okay? I built businesses, I failed businesses. I've made money, I've lost money. I follow conventional wisdom, believing that setting up an LLC through my business or a trust was just enough to protect me. Believing that standard financial planning was enough to secure what I had built, and it wasn't. got hit over the head with a billy club from the IRS due to my ignorance, which has a price.
My real journey into wealth preservation started after a major life shift. I had a comfortable W 2 job making well over six figures, multiple years. I was secure. I was comfortable. At least I thought I was. Then, like so many others, I got laid off. That moment forced me to take a hard look at my future. [00:02:00] I could either find a comfortable W 2 job again and stay in that cycle, or I could finally bet on myself.
So I got a job, a quick job to cover my bills for a little while, but ultimately I just knew the truth. I knew that it wasn't for me, so I chose the latter. I stepped into entrepreneurship and I started my own business full time in my consulting firm.
And I was really just determined to succeed. But I quickly realized that running a business was nothing like being an employee. I made mistakes. Big ones. I struggled and I failed. The turning point came when I attended a conference trying to find direction. I had spent the little, I had left to build my consulting firm. And during a short break, I noticed an older gentleman with silver hair and a crisp buttoned up dress shirt, [00:03:00] and something about him told me he knew something.
I know what it was. It was the scripture that says, Wisdom is with aged men and with length of their days understanding. So, I introduced myself and we ended up having lunch together. What started as a simple introduction turned into a life changing relationship. I later offered to take them out to dinner and over dinner we learned so much more about each other but really Later that night is where the fun began.
We had a conversation that continued and I sat there just really captivated as this gentleman painted a picture of what we call generational wealth through the power of trust and the hidden strategies used to maintain financial control. That night ignited something in me. I want to tell you so much more, but I really don't have the time.
To make [00:04:00] a long story short, I realized that estate financial planning wasn't just about passing on wealth. It was about the control, protection, and optimization of it. It was about ensuring what you build doesn't just disappear due to lawsuits, probate, estate taxes. I ended up booking an entire week with who is now today one of my greatest mentors to really deeply unpack these strategies.
which wasn't nearly enough time. And these strategies go back hundreds of years via handbooks and manuals that mostly are not available through the internet today, meaning that they have been passed down from generation to generation and somehow, just somehow. So happened to land on my lap as one of my mentors always tells me when the student is ready, the teacher will appear how my mentor and their [00:05:00] mentor got access to these manuals is a conversation for another day.
You'll have to get my book that someday I'll have to write. anyway. Since then, I've been operating as a trustee of several different trusts, and my partners and I help business owners and families protect their wealth in ways they never even knew existed.
That's why I started this podcast, because the truth is, most people don't even know what they don't know when it comes to protecting what they've worked for.
And I get it. This isn't the kind of stuff that they're going to teach in school. You're not going to learn it scrolling through social media. Most financial advisors and CPAs don't even talk about it because, frankly, can I tell you another secret they weren't trained to? But that's what we do here. We break it all down in a way that makes sense.
No fluff, no filler, just real actionable strategies that you can use to build a true financial advantage. [00:06:00] So going back, I got a question from the last episode. One of my friends listened to it and said, Hey, yo, Hey, I got some questions for you . And they said, Should I open a domestic asset protection trust let me tell you, I was actually impressed that the person did the research. And well, I'm not impressed because they're a pretty brilliant person, but they did the research and they had trusts in mind and they started digging into the specific types of trust, which most people don't do. And so I appreciate that.
And so I was just more than happy to answer this question on this episode. But the question is, should I open a Domestic Asset Protection Trust in an approved state or would I recommend that to my clients?
And in order to answer that, . Whenever I'm talking about irrevocable trust, I'm talking about a particular type of build, a particular type of contract
so, a Domestic Asset Protection Trust, first of all, is an irrevocable trust that allows the grantor to remain a beneficiary while shielding assets from creditors and lawsuits.
Hold up, [00:07:00] take a step back. If you hear me on YouTube, if you've done anything or heard me say anything about an irrevocable trust, we will never, I will never tell you to be the grantor of an irrevocable trust that you are also a trustee and beneficiary.
Or, I will never tell you to be a grantor and a beneficiary of an irrevocable trust. Why? Because I always tell you that the grantor must fund the trust and walk away, which means that they have nothing to do with the trust. . They're not a beneficiary at all,
okay? So, what are the key components of this trust that will make it what it is? First of all, it's self settled, meaning that the grantor can also be the beneficiary, which I just covered that. [00:08:00] It is not approved. In certain states. So not all states will recognize it. Alaska, Delaware, Nevada, South Dakota, Wyoming.
These are just some of the states that won't recognize it out of the 19. So my question to you is, why do you need the state's permission to develop a trust? Or take advantage of it? Well that clearly means that it's some form of statutory regulations that are built into the trust. It's a statutory trust.
Whenever I'm talking about trust on this podcast If it has anything to do with irrevocable and what I think is the best option, it's not statutory. so that's another thing. Why do you need the state's permission to operate in through trust? Oh, cause that makes it legal. Uh, yeah, not all things that are legal are statutory.
Not all things that are lawful need to be statutory.
Another thing, [00:09:00] this trust is a spendthrift trust, which. Okay, what does spendthrift mean? A spendthrift trust is defined by its inclusion of the spendthrift clause access to the trust's assets and protects it from the beneficiary's creditors. So, I love that.
I love spendthrift provisions, and if a trust can prevent the beneficiary from doing anything, that is the best way to do it. That way, the trustee remains having full control. So that's a good thing about this trust is that it has a spendthrift provision, but again, I don't want to operate it through a trust that I need the state's permission to operate it through.
And why is that? Well, if I get a trust developed in one area and something happens in another state that doesn't recognize this trust, well, now my assets are exposed.
State jurisdiction. So it must be established in the states that it allows, as of 2023, I mentioned 19 states permit this, while others will not. So if you live in a state that doesn't, your local courts could [00:10:00] disregard the trust. There goes your asset protection.
Okay, so what's my take? If you live in a domestic asset protection approved state, and you want the state's permission to operate and in through the trust, this is a solid option. If you don't, you'd rather have protection full control. I would probably stay away from it.
I'd probably stay away
So why do I even bring this up? Well, I think it's really important that if you're listening to this podcast and you're trying to get a better understanding, you're trying to learn about how trusts work. It's important to understand that , there are several different types of trust out there that exist, right?
And I want to make sure that if I'm sharing anything about them, that you have a good understanding of. Maybe why or why not? What does this trust do? What does it not do? And when I get questions from [00:11:00] listeners, it just makes me happy because it shows me that there's there's someone out there that cares about their assets.
There's someone out there that cares about generational wealth transfer. There's someone out there that cares about protecting their assets from creditors, lawsuits and excessive taxation. So I appreciate them and I'll continue to do my best to answer them when they come my way. But I would love to share with you the strategy.
that will keep wealth in the family for generations. But before I do that, we'll be right back.
Serious question. Are you ready to take control of your time, your income, and your future? If you've ever wanted to own your own business, write your own schedule, and earn while you learn the ultimate secrets of the wealthy, this is your choice. I work with a team of experts who help business minded people, just like you, build something real.
If you're tired of waiting for [00:12:00] opportunities and you're ready to create your own, let's talk. Send me a text message. of the word Mentee, to 50750asset. That's 5075027738 to get connected and start building your advantage today. Again, that's text Mentee to 50750asset now and we'll get you started on a real path to financial control let's talk about one Of the most powerful generational strategies, the trustee transfer. Okay, what's that? Well, in order for me to explain that to you, I'm going to paint a picture for you. Let's take Bill, for example. Bill owns a successful business, and like most business owners, he's thinking about some form of a succession plan.
Now, the conventional route would be to sell the business to his son, Bob, but that comes with a lot of unnecessary complications, like capital gains taxes, potential creditors, and even risking Bob's [00:13:00] personal liabilities affecting the business. So instead, Bill's been listening to the Keenan Roberts Advantage.
He's been in contact with AssetSmart. He, he's been trying to understand how to operate and in through trust and fortunately for Bill, he's been understanding this for quite some time. So what did he do? Bill establishes a properly structured trust in the very beginning. He never actually owned the business.
He controlled it. , A trust can do everything you can do, it just needs arms and legs. So Bill decided to be the arms and legs of this trust. And so, with that, he needs to figure out a succession plan. So with this properly structured trust, Bill appoints Bob as the trustee with one simple action.
And then Bill resigns as trustee. Bob now has full [00:14:00] control over the business. And the key, the part that I really want you to understand, the part that if you haven't picked it up yet already, I hope you're picking it up now, is that Bill never sold the business. He never transferred any ownership in any way that triggered taxes or exposed assets.
Instead, the trust continues to own the business, and Bob, as the trustee, now controls everything. He makes the decisions, he runs the company, and ensures that it still thrives without ever personally owning the business himself. Because What you don't own cannot be taken away from you. That's the power of structuring your assets correctly.
It's about the control, not the ownership. And that's exactly why trusts are a game changer for business owners who want to protect what they've built while keeping everything in the family. And so think [00:15:00] to yourself. Within the last, let's say, 60 seconds, I just showed you a way to transfer wealth like never before.
And I didn't make this up. This isn't my baby, this isn't my invention. This is how billionaires pass down real estate, stock portfolios, you name it. , I'll give you a real world example. Okay, the Bill and Bob story, I just made that one up. Scenario applies, but let's take the Rockefeller's trust model.
has used trust structures since the late 1800s to pass down assets for six generations. Instead of selling businesses and assets, they just replaced trustees, maintaining the financial control. Today their family trust funds over a heirs. Okay, here's how it works.
The current trustee simply resigns, , appointing the next trustee, keeping the wealth in the family,
[00:16:00] so, conclusion. This is the real wealth building game that few people understand. And it's how the top 1 percent retain control over their assets without losing them. . My goal is to help you do things. The right way. Unfortunately, people do things the wrong way when it's too late.
Now, I hope that was easy to understand. I hope it was very simple to pick up. And if you know me, personally, or were referred to this podcast and you have questions, send it back to the person that sent you here. Or if you have access to me, send me a message. I'll be happy to answer your questions, but here's the deal.
Building wealth is not rocket science. It's just a matter of the right information landing on your lap and what, you're going to do with it. So I hope this helps. [00:17:00] You've been listening to the Kenyan Robbers Advantage, and I'm looking forward to seeing you next time. Thank you.