OPTIMAL WEALTH STRATEGY GROUP
BUSINESS + TRUST
Ways That a Trust Can Benefit Your Business
- Asset Protection:
When you're considering asset protection, a trust becomes a wise strategy for you. It's crucial that the trust takes ownership of all your company's assets, which can then be leased or utilized by your main business. This approach provides additional protection for your assets once the trust is set up following this strategy. A well-established and operated trust can also bring tax benefits, optimizing your tax strategy and allowing you to retain more wealth for the growth and expansion of your company. - Employee Management:
Did you know a trust can assist you in managing your employees effectively? Sometimes, dealing with W2 employees, unions, and insurance claims can be overwhelming when you aim to scale your business. Here's how a trust can support you in such situations: You can establish a company within a trust to hire and pay employees. Subsequently, you can contract this new company to provide the workforce for your main company. This arrangement safeguards your main company from potential legal or insurance issues that could impact its operations. - Legal Protection:
Considering legal protection, placing a company's assets in the right kind of complex trust makes it challenging for people to sue either the company or you as its trustee. Since the trustee of the trust is technically a guardian and not the beneficiary, suing the trustee becomes difficult. Similarly, as the beneficiary, if you face a lawsuit, the assets in the trust remain inaccessible to the suing party, unless the trustee issues a distribution. To maximize this legal protection, keeping the beneficiary information of the trust private is crucial. This prevents anyone from conducting a search for the names of the trust's beneficiaries.
Transitioning into managing trusts involves learning how to administer them correctly. Operating in the trust world requires adapting to a new set of rules, different from the generally accepted accounting principles familiar to most business owners. It's essential to avoid mixing of business or personal funds with trust funds. Treating the trust as its own entity, complete with a separate credit card and debit card, simplifies management significantly.
As your assets and wealth grow, it becomes crucial to update your structure and setup, providing protection for your company and family against unforeseen dangers. Scaling your company often means outgrowing your existing team(legal & taxes) and updating processes and procedures.