All Forum Posts by: Matt Ruttenberg

 I agree! If you were to inherit 10mm, there needs to be some estate planning first and foremost.  Using Whole Life insurance is a important cog in that plan.

I would personally put my assets inside a BDIT (Beneficiary Defective Inheritor's Trust), or a SLAT (Spousal Lifetime Access Trust) to freeze the estate at $10mm.  

I would purchase any and all investments inside that trust along with a form of Whole Life or IUL policy to be able to use the tax code of 7702 to create a tax free income and ability to leverage my real estate assets.

The BDIT effectively freezes your estate, but gives you the access to funds.

Good strategy for any asset that looks to eclipse the estate tax level.

Depending on how you fund the policy, infinite banking with the proper design, could be an option.  Some companies have an early cash value option that waives the surrender charges inside an IUL.

The whole concept of infinite banking is to get to the policy as soon as possible, and leverage the very low interest rates.  If you're not getting to that, then it's more of a LIRP (life insurance retirement plan), which has long term goals.

There are a lot of companies that do well with "getting the money in" then screw up the end game with the loan provisions.

If you want, I have a case study for using a policy for private lending to other people.  Feel free to reach out and Ill send it over.

@Basit Siddiqi

You’re 100% right. My apologies. Nothing against CPAs at all. Some do more planning than others, but also depend if the client is willing to pay for it.

@Michael Plaks

I’m not a financial advisor/planner

I’m own a 401k administration company and use life insurance for deferred compensation sometime. In which you need a life insurance agency.

@Michael Plaks

Intro to other people isn’t self serving.

Also, a flat fee advisor and fee-based planners by definition don’t use commission based products.

But you’re right, plenty of advisors use fee-based products AND commissions products. But not all of them for sure.

Not all advisors are built the same… so my point is that people shouldn’t use blanket comments because it deters them even looking for the right ones… or even knowing that they exist.

I’d rather educate them about who’s available.

You're casting a wide net with that financial advisor comment.  Flat fee and fee-only advisors don't work off of a commission-based business model. 

I think it's important to explain that not all advisors/planners work for companies that push commission based products, but it sounds like that is where your experience was.

But, I do agree that it's probably a good idea to separate those roles though... and not bundle a "jack of all trades" into your financial life.

CPAs often look in the short term, and not the long term.  So it needs to be balanced out and not by the same person.

Yeah tax planning is a different animal than tax prep.  Not sure if the cost is worth it, but I work with some others that do that as well.  If you want a few introductions, feel free to let me know.

Side note, one of the other gentlemen said financial planners aren't worth it because they sell you mutual funds and insurance.  That's not true unless you work with an advisor at an insurance company and they have sales goals.  Ignore him and I would interview more than one.

However, I would try to work with a team instead of all-in-one.  Each corner of the finance industry is completely different, and nobody can do it all well at the same time.

Feel free to reach out and I can give you intros.

I own a 401k administration company if you want to connect on this.  We work with many real estate investors that house RE within their plan.

Acting as a private lender has it's limitation inside of the plan though.  I assume you're self employed?  We're working through this with a client as we speak, and there is a lot of compliance around it.

Feel free to reach out if you have any questions you want to discuss.

@Juan Tonche My company administers self-directed 401ks.  It's all about the plan document, and we use a custom plan document.  We have several clients that do this, with or without employees.

Feel free to reach out, we work with many real estate investors in this capacity.

@Jim K.

What a great question! But it really depends on a number of factors.

Full disclosure, I consult on this type of thing whether it’s for biz owners or RE investors for more estate planning type situations. In other words, how and what is passed on tot he kids.

Some want RE to pass to the kids as is, and some they want to liquidate because of the headaches you mentioned. It’s somewhat determined by their own experiences.

Also, some kids what the RE/business, and the other kids what cash. Or if there are multiple siblings, we ask which ones want which?

Usually, we’re using different types of trusts and entities structures to help with estate taxes, etc. Some are BDITs, SLATs, Charitable LLCs, etc.

Some help with getting out of the 1031 exchange cycle as well or even pass that to the kids or charities. Sometimes this is used for tax planning strategies as well.

Lots of different planning options for those with the same questions. But a very persona choice because there are sooo many paths.