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The Ultimate Guide To “TRUSTS”

If your concerned with after life or just need to keep assets in a safe place for a time being? This list should be your go to guide for TRUSTS to choose from. Trusts usually are ensuring, Safety of Assets, continuity of Funds, Property, and Investments. This List of “TRUSTS” will help you decide with your Investment Advisor and Estate Planning Attorney which to choose.

  • Revocable Living Trust -This is a trust that allows you to make changes to it, while you are living.
  • Grantor Trust -A Grantor is an individual who creates the trust, and this type of trust allows them to place money, assets, or whatever it may be into a trust in order to streamline things.
  •  Irrevocable Trust -Once you’ve placed money into the trust, it stays there. You can’t change your mind about this one. There are many types of revocable and irrevocable trusts, and we are going to go over them as we continue.
  • Testamentary Trust -Most often, a testamentary trust is created by the will and specifically outlines what assets are going to be utilized upon the death of the grantor. If you’re not careful, this could create some problems, tax-wise, for your business. So be sure to have your attorney take a close look at your last will and testament when setting up a testamentary trust.
  • Minor’s Trust -As the name implies, this is a trust that provides money to a child that is under the age of eighteen. It is usually created before you pass away, but it could be a part of the testamentary process as well. A minor’s trust will require the appointment of a trustee to manage the funds until the minor child comes of age.
  • Spendthrift Trust -A spendthrift trust is a great option for leaving money to someone who may not be the best at dealing with their finances. The spendthrift trust gives an independent trustee the full authority to make decisions as to how the funds may be spent. I recently told you about a client that has a child with some addiction issues. This would be a great trust for someone in such a situation.
  • Blind Trust -I first heard about blind trusts in an episode of Law & Order. Basically, it allows the trustee or anyone with the power of attorney to handle the assets without the beneficiary’s knowledge. The most common reason for this is to stave off contention between beneficiaries.
  • Discretionary Trust -Discretionary trusts don’t have a constant, or fixed, allocation of assets. The beneficiaries and the payments can be adjusted throughout the length of the trust by the trustee, based upon the criteria outlined within the trust document.
  • Intentional Defective Grantor Trust -This one is a bit more advanced. An Intentional defective grantor trust freezes some of the grantor’s assets for tax purposes. Essentially, the grantor intentionally creates a problem within the trust document that guarantees they must pay income tax on the income, decreasing the value of their estate. So you would use the estate asset to pay the taxes on the trust that is outside of your estate. Thus, allowing the trust assets to continue to grow without the erosion of taxes.
  • Credit Shelter Trust -The credit shelter trust allows married people to avoid estate taxes by allowing the assets specified in the trust to be transferred to the beneficiary. Usually, this is the grantor’s children. This allows the spouses to maximize their estate exemption. These are commonly listed in the last will and testament and used in conjunction with trust number eleven.
  • Marital Trust -Instead of shifting the proceeds of the trust to your children, as in the credit shelter trust, a marital trust moves them to your spouse. When the first spouse passes away, they leave the assets to the second spouse and, through the marital trust, they aren’t included in the second spouse’s estate.
  • Qualified Terminable Interest Property Trust -Qualified terminable interest property trusts or QTIP trusts provide for the surviving spouse but allow the grantor to remain in control after the death of the surviving spouse. These are useful in second marriages or to prevent predatory marriages.
  • Qualified Personal Residence Trust -If you need to remove your home from your estate, a qualified personal residence trust is a great way to do so. You would transfer your house to a QPRT trust in order to remove it from your estate and it can be considered a gift. Under the terms of the trust, you would allow the beneficiary to live in the house for a certain number of years, rent-free.
  • Generation-Skipping Trust -Let’s say you want to leave all of your assets to your grandchildren because you have already provided your own children with a means for success. A generation-skipping trust does exactly what it sounds like. It allows you to skip a generation in order to provide for the next one.

Before I move on with the list, did you catch my Article on “Pooled Investments and what you need to know? HERE!“

Charitable Trusts

  • Charitable Trusts -Now we will explore the charitable trusts. As their category implies, these trusts offer a variety of charitable benefits. Additionally, these are a great vehicle for mitigating tax liabilities. Don’t worry, there’s nothing wrong with benefiting from your giving.
  • Charitable Remainder Annuity Trust -The first is called the charitable remainder annuity trust or CRAT. With a CRAT you place your assets into the trust, which then pays back a fixed amount each year. Once you die, the remainder goes to charity.
  • Charitable Lead Annuity Trust -The charitable lead annuity trust is very similar to the CRAT, however, it works inversely. Instead of receiving a fixed annual payment and then giving the remainder to charity, a CLAT pays the annual benefit to the charity and then leaves the remainder to a beneficiary of your choosing, once you’ve passed.
  • Charitable Remainder Unitrust -A Charitable Remainder Unitrust, also known as CRUTs, is an irrevocable trust that is created under the authority of the internal revenue service. It pays a fixed percentage of the assets to your beneficiary — or to yourself — and then transfers the assets to a charity after your death.
  • Charitable Lead Unitrust -Charitable Lead Unitrusts or CLUTs allow a donor to give a varying amount each year, for a fixed amount of time. When the term of the trust is met, the remaining assets are given back to the donor or to the beneficiary.
  • Shark-Fin CLAT -The most aggressive type of CLAT allows small payments to be made into the trust for the first few years. However, a very large payment must be made in the last year, or two. By increasing payments over time, the assets in the trust have more time to grow.

Complex Trusts

Unlike simple trusts, complex trusts are a type of trusts that must retain some of their income rather than distributing all of it to their beneficiaries, distribute some or all of the principal to the beneficiaries, or distribute funds to a charitable organization. The name may be a little misleading, however. Complex trusts aren’t necessarily more complicated than simple trusts. They simply allow the trustee greater discretion.

  • Irrevocable Life Insurance Trust -This is one that I personally have. Basically, I’ve set the trust to buy life insurance and when I pass away, the trust shifts the proceeds to my wife and kids.
  • Crummey Trust -Some will argue that the Crummey trust isn’t a trust, but rather, a provision. Technically it is a trust, however. It’s based on the 1968 Crummey case and essentially allows you to take advantage of the gift tax exclusion when you transfer cash or assets to another person. With a Crummey trust, you retain the right to place limitations on when the recipient can access the funds.
  • Buildup Equity Retirement Trust -Buildup equity retirement trusts, allow a spouse to give a gift to their spouse, using the annual gift instead of the unlimited marital deduction. In doing this, the assets are exempt from both the gift and the estate taxes.

Grantor Type Trusts

These trusts have a few key takeaways. For starters, the individual who creates the trust is the owner of the assets and property for income and estate tax purposes. However, grantor trust rules can apply to a variety of trusts and are a useful tool for minimizing taxes.

  • Grantor Retained Unitrust -GRUTs are irrevocable trusts that allow the grantor to place assets into the trust and receive a variable amount of income during the term of the trust. Let’s say it’s a twenty-year trust, the grantor can receive a fixed or a varied income for the length of that twenty-year term, or the life of the grantor.
  • Grantor Retained Income Trust -Being a Southern boy, I am particularly fond of a good batch of grits but that’s not the type of GRITs I am referring to when I talk about GRITs: grantor retained income trusts. This is the same basic concept as a GRUT but in this case, the grantor places an asset in the trust and retains the right to receive income from those assets for a period of time.
  • Grantor Retained Annuity Trust -These allow the grantor to make a large contribution, as a means to avoid gift taxes, and then set up an annuity through the GRAT. This creates an annuity payment for a fixed period of the term. Afterward, the remaining assets go to the beneficiary as a gift.
  • Dynasty Trust -This one is where your attorney will earn his money, as some states do not allow these types of trust. Dynasty trusts are irrevocable and give the grantor the right — as long as it is within the law — to set stringent rules on how the money is to be distributed and how it is to be used by the beneficiary. Because it is irrevocable, a dynasty trust can’t be altered by the grantor or their beneficiaries. These are typically used by wealthy grantors to ensure that they are leaving their financial legacy to generations rather than individuals.

Asset Protection Trusts

This class of trust is often used to shield an individual’s assets from creditors. These are the strongest protection you can find from creditors, lawsuits, or any judgments against your estate. However, you should always consult a qualified financial advisor to see if this type of trust is right for you.

  • Domestic Asset Protection Trust -This is a simple way to protect your assets from creditors. That is, literally, the simplest term available to describe a DAPT.
  • Offshore Asset Protection Trust -While it might sound like something the incredibly wealthy super-villain in a movie would have, in order to shield their holdings from the scrupulous eyes of the hero, in reality, they’re pretty common. Essentially, you create a trust in a non-domestic jurisdiction to protect your assets from seizures, judgments, or creditors.
  • Totten Trust -We discussed these in the last article, but basically, it is a form of trust in which the grantor places money into a bank account or security. Upon the grantor’s death, the assets in the account pass to a beneficiary.
  • Illinois Land Trust -Illinois land trusts are for non-profit entities for the purpose of conservation. If you had a piece of wooded land or a farm and wanted to have it maintained for the benefit of someone else, you would create a land trust.
  • Gun Trust -A trust that isn’t so well known is the gun trust. It allows its creator to acquire a class-3 weapons holder — you must have a license — in order to transfer a gun into the trust. This is especially useful for collectors and enthusiasts that may have several (Legally obtained) automatic firearms, suppressors, and things of that nature. There are a lot of laws that surround gun trusts though, so it’s best to speak to your attorney when setting one up.
  • IRA Trust -Individual Retirement Account Trusts are often set up by the courts. You are essentially setting up a retirement account for the beneficiary, usually your kids, and placing it into a trust.

Special Needs and Elderly Care Trusts

As you might expect, this group of trusts is designed with the long-term care of individuals with special needs in mind.

  • Special needs planning is unique from typical estate planning when you have beneficiaries with unique challenges and perhaps who also participate in means-based government programs, such as developmental disability (DD) services, Medicaid, or Social Security Supplemental Security Income (SSI). Special needs planning allows you to:
  • Provide a legacy for your special needs loved ones,
  • Designate someone to manage the trust for their benefit,
  • Handle any unexpected inheritance or personal injury lawsuit funds,
  • Protect them from creditors and predators, and
  • Protect their eligibility for benefits.
  • First-Party Special Needs Trust -These trusts can be set up by an individual with special needs, in order to maximize their social security or Medicaid benefits.
  • Medicaid Trust
  • Medicaid Trusts are income-only trusts that help seniors avoid tax issues and probate problems when they are living in a nursing home and pass away. It’s a way to protect assets, but there are some clawback issues. You will need to speak with your experienced estate-planning attorney.
  • Qualified Income Trust -Also known as the Miller trust, the QIT protects the assets of an individual that has applied or is applying to Medicaid. If the individual has too much money to qualify for Medicaid, they could place their assets into a qualified income trust in order to meet the financial requirements. Personally, I have ethical issues with this type of trust, but feel free to form your own opinion.
  • V.A. Eligible Trust -The V.A. Eligible trust is similar in concept to the Miller trust. Once again, you are placing money outside of what the government can track, in order to make way for the Veteran’s Association to help you with in-home care or nursing home care.
  • Spousal Testamentary Special Needs Trust -Spousal testamentary special needs trusts combine two different trusts to help the surviving spouse be counted eligible for Medicaid.
  • Pooled Trust -Finally, we’ve come to the end of our long list with the pooled trust. It is designed to allow people with disabilities to become financially eligible for public assistance benefits like Medicaid home care.

Using Trusts for Tax Mitigation

The goal of most of the trusts that we’ve covered is to minimize the amount of income tax you will be responsible for. Now, that’s not to say that this should be used as a means of dishonesty, but rather that there are allowances and exemptions — if you know where to look — that will allow you to protect your assets and sustain them for the people you love the most. It is important to speak to your attorney when planning and creating your trusts, in order to make sure that you utilize all of the tools available to you, while also keeping within the guidelines of the law.

In Conclusion

The following list of Trusts was meant to give you a better understanding of the TRUSTS that you can use for you family, personal or group needs. It provides all types of options for safety of Assets, Securities, Medical Care, and Financial Planning and Developing a long legacy. I hope you found value with this list, and hope you work with your Attorney, Tax Accountants, Investment Advisors, and other Financial Professionals to make this list work for you.

Godspeed.
JS

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This is How Entrepreneurs Stay Safe When Investors Invest

If your a Entrepreneur you better believe you will be under the microscope financially when handling other People’s money. And this is how you stay safe and stay lawful in the process.

First you need to understand my tone when I am writing this Post. It’s serious fucking business. Admittedly I am known for not being a push over and being a little edgy at times. But someone must demand excellence from others. The Military was responsible for beating this into me. So if your sensibilities are chapped or offended? Maybe you should not read this article. And this article is NOT LEGAL ADVICE.

Many entrepreneurs do not stop to consider how their ignorance, and inflated ego is causing their own limited growth or certain failures. If you are pandering to the general public for social media likes. You are not fooling anyone. As a matter of fact you are alienating real business opportunities and real qualified investor opportunities.

Real business people in your community are always watching your every move. They know a fucking Fraud from a real struggling take no prisoners entrepreneur. There’s wealthy individuals, Investment Partners, and finance professionals in your community who are incredibly sophisticated financially. They know a real authentic Entrepreneur from a social media fraud.

Live by this advice. Be authentic, be incredibly generous and politely carry yourself with absolute class. Watch your movements and how you do business. Have some pride and help your community.

If your in the column of qualified or Accredited Investor from the SEC? And you would like to share your informed opinion with me how I am right or wrong in this Post? Im positive I would be open to it. Please Email me. 🙂

And if you have read previous posts from my Blog? It can not be stressed enough. How important recruiting a successful community leader and Mentor is! It’s so important you will be doing yourself a disservice if you do not recruit a mentor in your community.

Still most Entrepreneurs do not know what they are doing. So If you do not know what your doing? Recruit professionals who do know what they are doing. This post is meant to keep your professional reputation intact. And keep you safe from criminal investigations that may end with you locked up in a jail cell and labeled a fraud in the local Newspaper.

What you should not be doing?

The Following suggestion of mine, is what you should NOT be doing if your a Entrepreneur who is seeking fundraising for your new startup. If you want to be successful? The following strict bullet points are suggestions you should take to heart.

  • A. You should not be approaching wealthy community members with a idea that has no proof of concept.
  • B. You should not be selling yourself with the next FACEBOOK idea to the wealthy in your community.
  • C. You should not be accepting any checks or money from anyone in the community without a team of pro’s.

Under “NO CIRCUMSTANCES” do you ever fundraise in your community alone with just an idea. This will always end badly and if you ask me? Is tantamount to criminal fraud in the highest degree. You have no business taking money from anyone and managing funds in a business checking account if your a new fresh entrepreneur. Are we on the same page? GOOD!

If you are not humble and not reliant on Business Professionals? It’s likely you will end up on American Greed as a failed Entrepreneur and Criminal. So do everyone a favor. And do things the right way. And for “God’s Sakes…Don’t be a Instagram Playboy. That Screams Your A Fraud and Criminal. Your Welcome.”

What steps should you be taking as a Entrepreneur?

You should be interviewing Professionals in your community for the right “fit”!

Before we can advance, I need to drive home the importance of this step. This will provide you a few professionals you will need to recruit if you are starting a business. This formula will not fail you and using this formula will keep you safe legally. It will absolutely boost your community presence as someone to take seriously and will begin to create a positive buzz about your business venture. So please take my advice and use it. It pays massively overtime and will begin to make you a trusted community voice and leader.

The reason I lay this out here is because..Many people in your community will dismiss you as someone to take seriously. In todays environment of Bull Shit Social Media Posts and Online Con-Men and Con Women? If your not squared away with a team of Professionals. People will gossip about you. And will privately call you a Fraud and speak poorly about you. Until proven otherwise.

Read this article about a “Globe-Trotting Instagram Playboy Busted In $431 Million Credit Card Cyber Scam After FBI Raids His Dubai Mansion” “HushPuppi the Nigerian “FRAUD!”

This post is meant to give you the Entrepreneur real direction on how to fundraise and become a success. Their are literally so many criminals and frauds in the business entrepreneur environment and on social media. You will likely be judged as just another “CON MAN OR WOMAN” until people can clearly see your helping your community with a team of professionals in tow. So beware.

Recruit a Business Attorney

First step in your business entrepreneurship career is to interview and recruit general advisory legal counsel. Having a Business Attorney close to you will ensure two things. You stay out of legal hot water, and you will have an established advisor help you negotiate decisions in business. This alone will negate most of the problems you face in business. My personal Attorney is a Bad Ass. We have worked on a Inner City Mayoral Political Campaign in the past. He is Corporate Counsel and always available when I need him. And honestly speaking? Also available as a Team Mate when I visit and am invited to high class Cocktail Business Receptions with our City’s elite.

The benefits are 100% GOLD! Your counsel’s advice will help you along the journey. Keeping you safe from making stupid mistakes. And when it’s time to start accepting checks form Investors? He will know how to create Legal Documents to keep you safe from legal action or worse. Criminal Investigations.

Difficulty of this process?

Look everything has a downside. I am not saying call up your local Big Law Firm and try to recruit a $900 an hour corporate attorney you don’t already have a relationship with? Not what I am saying! Find a small Business Attorney in your City someone you already know who is a trusted Business Attorney or Someone you trust to introduce you to a Attorney. Telephone the Attorney and go to lunch. Be prepared and ask relevant questions. Look for the right fit for you. And establish a trust based Relationship moving forward. It’s too easy for you inexperienced name to be dragged through the MUDD by not having the right professionals around you. Capesche? Good!

Small Trusted Local Accounting Firm

Ok let’s say you have began your Entrepreneurial mission, you have been preparing the community for fundraising. Your next step is to begin searching and visiting small local “TRUSTED COMPETENT” Accounting Firms. Having a small trusted and competent accounting firm to handle all financial aspects of bookkeeping and payments is extremely vital and a cornerstone to your success as a Entrepreneur. If you will be handling any money from Investors? Your small accounting firm and your local general counsel need to be working with you and together. If you accept a investor check from anyone you need these 2 people at that table. Or at the bare minimum involved. A. Your General Counsel and Attorney and B. Your Local Competent and Trusted Accountants. I would also have the meeting at the Office of your Attorney or Accountant. This is my advice.

This will prevent you from having any problems moving forward. But if you want to play it safe and keep your reputation from being dragged through the mud? You must take this advice and use it. And for the record you should already have a business plan on the table before you accept a check from any investor. It’s just good business. Many entrepreneurs who do go the start up route? Do not understand that it’s foolhardy to sell a start up idea with no numbers or no proof of concept. If I were you? Don’t ever sell a Start up idea with just a piece of paper and a idea. Never approach investors with just a piece of paper and a idea.

YOU NEVER HANDLE FUNDS ALONE

Let’s say for instance your Business is on it’s way to being a start up. Since your startup business is it’s “OWN ENTITY”. The role of the Controllers? Controllers are the people inside the business with authority to approve or deny spending of funds for your business entity. You will need A. A Controller who’s integrity is professionally sound and someone that has previous experience. And B. You should in good conscience stay away from handling funds alone. Always have another signature and confirmation for spending funds or approvals. To play it safe? You should have at least 3 individuals who are responsible for the spending or denial of dispersing funds. And at any time 2 of these individuals should give permission for the business to spend any amounts of money over say….$500 dollars. This keeps you safe as a entrepreneur and will keep you legally out of trouble.

I would choose 2 Accountants as fellow Controllers of the Business checking account. This is the safe route. And will ensure your business is safe at the end of the day. I can not stress enough how important accountants are to your business. Because you will need to pay your Employees and need to file “TAXES”. So they are extremely important to your startup business.

Here is another reason I suggest having a trusted local Accounting Firm as partners in business? They will invite you to spend time with other Business owners. This begins to establish your trusted name in the business community. And if you ever need a referral to another business professional in your community? They are there to help.

In conclusion you likely are beginning to see how important it is to have professionals in your business career. If your going to be handling other peoples money in Business and as a Entrepreneur? It is mandatory you use this post as a rough blue print and direction you need to take to A. Stay Safe Legally from Criminal Probes, and B. Building your Professional Reputation as someone Trustworthy in your business community. Because all things considered to many Entrepreneurs I meet “HAVE NO CLUE HOW TO RUN A BUSINESS” or are “Financially Illiterate”. This will help start you on the right track and begin to help you move in the right direction as you stumble along as a Entrepreneur.

Thanks for Reading. Stay Tuned!

JS

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Types Of Accredited Investors?

Are Entrepreneurs looking for Partners and Investors in all the wrong places?

Often times Entrepreneurs do not stay curious, they become masters at limiting their own growth and Investing is not a priority. This post will share why you should always keep learning and keep expanding in your own business space. There’s always another level if your willing to take the time and learn. If you are a serious entrepreneur, managing partner of a fund or apart of a Investment Group? There are qualifying questions you must ask to justify the start of a Business relationship with sophisticated investors. And just so people realize this point. Me or my Partners do not just talk to anyone with a few hundred thousand bucks. But if your a serious entrepreneur that has a interest in financial services and joining the Major Leagues of Business investing this is an article you will want to definitely read.

Interestingly last week I met with a Kansas City Accountant from BKD which is a large Transaction advisory Accountant firm in Kansas City. We spoke to each other about attractive investment assets to buy. And must use personal discernment and be very selective and understand the business before investing. If a Investor brings to the table One Hundred Thousand or Fifty Thousand Dollars with no background as a Professional subject matter expert, Accountant, Attorney, or Enterprise Board Member? The answer is a fast but gentle “No Thank you I would not be a good fit to partner with you.” The reality is there are people who have money. But are not accredited investors. Choose your partners wisely.

Their are Non Accredited investors and then Accredited investors. There’s a big difference. And that’s one reason I am writing this guide to share the 3 levels of Accredited Investors for serious entrepreneurs. We will get more into this later.

I must be share there are literally many Con-Artists and Fraudsters in Financial Services. So you must pay close attention to who you consider a professional inside Financial Services & Investing. This article will also give you incredible insights on what to look for when looking for qualified Investors as partners.

Unspoken Rules in Professional Investing

Ok in the Big Leagues of Professional Investing it’s likely that if your not referred by a trusted friend, Board Member, or Corporate Officer/Executive or someone who has a Professional Investment Track record? You don’t entertain any conversation with this person. It honestly is a closed society and sort of Mafioso.

Investors are anything but alike

This will honestly probably disappoint many people in my community. I do not partner or accept money from Non Accredited Investors. But the truth is there are only 3 types of Investors I would choose to partner and work with. I will absolutely go more into detail about these 3 types of Investors. You may want to know this interesting fact from DQYDJ.com This potential investor group is not as small as you think.

We estimate in 2020 there were 13,665,475 accredited investor households in America. Roughly 10.6% of all American households were accredited in 2020. Further, accredited investor households controlled roughly $73.3 trillion in wealth in 2020. They controlled around 76.3% of all private wealth in America measured by the 2019 SCF.

DQYDJ Investment Homepage.

3 Investors Who Should Be On Your Radar

But first let’s look at some basic guidance to keep you safe along your journey. Fund managers live by this guidance, and so should Entrepreneurs. Even though your preferable investors are High Net Worth Families and Individuals, you should keep this at the forefront of your responsibility as a Professional Investor or Entrepreneur.

  • Never accept one dollar from Grandma’s One hundred and Fifty Thousand Dollar life savings.
  • It’s your fiduciary duty to ensure the person who partners with you has a level of sophistication to understand the risks of start-up investing.
  • It’s preferable to avoid Start-Up Capital Intensive Businesses as a Entrepreneur
  • It is also very important that you do screen out and disqualify Investors who are not Financially Literate
  • It is imperative Entrepreneurs must study and get familiar with Federal Securities Law
  • Have a Business Attorney as someone who can watch your back and advise you along your career.
  • Have Advisors you can turn to as a Professional who can introduce you to someone or give you pro guidance.
  • BE A COMMUNITY LEADER – Take responsibility for people who don’t understand what they are asking.
  • Don’t be a FRAUD, ALWAYS BE TRANSPARENT, and NEVER EVER BE DISHONEST!!

The Accredited Investor

The SEC defines an accredited investor as either: an individual with gross income exceeding $200,000 in each of the two most recent years or joint income with a spouse or partner exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.

If your a Entrepreneur, Executive, or Professionally savvy Investor you will recognize and most likely appreciate I am taking the time to detail what exactly the definition of an Accredited Investor is. And it is a small population when compared to the United States Population as a whole.

A Qualified Client

This definition comes from my personal relationship with the good Partners and Attorneys of New York City’s International Law Firm Paul Weiss

A Qualified Client according to the SEC 2021 is a Client that has a 2.1 Million Dollar Net Worth Excluding their home.

  1. has at least $1.1 million in assets under management with the investment adviser immediately after entering into the advisory contract; or
  2. the investment adviser reasonably believes, immediately prior to entering into the contract, has a net worth of more than $2.2 million.

Please be sure to read the SEC up to date Investment Advisors Act of 1940

THE SEC UP TO DATE DOCUMENT CLICK HERE

Qualified Purchaser

What is a Qualified Purchaser? A Qualified Purchaser has a Five Million Dollar Net-Worth excluding their primary residence. QP could also be a Entity with Twenty Five Million in Assets and their primary business is not investing. It’s an actual separate company or entity.

Here is the Thomson Reuters Practical Law Definition in detail to keep things on the up and up and legit!

CLICK HERE FOR FULL DOCUMENT & EXPLANATION

Keep yourself moving through the roadblocks that deny you access

Are Entrepreneurs looking for Partners and Investors in all the wrong places?

In conclusion,

It feels like I should share the reality I faced as an Entrepreneur who had no financial reputation seeking influential mentors. I was literally meant to fail and go away to do whatever Entrepreneurs who fail go and do. But I didn’t fail. I kept going and being curious. Here is a quick story and reality I faced not knowing that everything I faced was rigged and stacked against me. If it wasn’t for my curiosity and my tenacious ability to withstand punishment and pain? I would have surely never discovered the next level in business finance and the strategy to get their. Please read on!

When I first became an Entrepreneur I had a suspicion that I should go seek out and talk to professional fund raisers. Most of these fund raisers viewed me as a waste of time and not worth a call back nor worthy of a personal meeting. They ignored me, disrespected me in the open. I took all this mistreatment on the chin. I in return did not play their dirty passive aggressive games. They reacted to my calls and visits as if I was a threat and unworthy of their valuable time.

But now these day’s I am not easily dismissed any longer! My market value has gone way up. All because I put in the personal work and received a real financial education. I have done all this by experimenting, researching, and having great teachers inside the Real Estate and Private Equity Fund space. These same Attorneys and Fund Raisers now openly ask me to collaborate on projects and campaigns with Investors. I have proven myself as a fierce competitor. The goal of today’s post, was to share with you. Even though you may feel you know everything about your business space? I promise you most likely should stay curious and stay insanely competitive.

Thank you for reading everyone. Id be happy to hear your thoughts below. Have a wonderful Holiday Weekend.

Godspeed -JS

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The Sit Down For Entrepreneurs

If your not sitting down with your Business Partners to collaborate on direction, agreements, leadership and other terms once a year? Your likely setting your business partnership up for certain failure and possible major disagreements. If your willing to ask hard questions up front and use my suggestions in this post? You will walk away with a impressed Business Partner and a solid relationship foundation moving forward.

Accounting is Accountability

I am very aware most Entrepreneurs in small business more than likely are Financial illiterate. They have no way of knowing what they are doing right and what they are doing seriously wrong. The first step in building a Financial Foundation is to take a Accounting class online or at a local community college immediately. Having trouble absorbing the information? Take it two times if need be. Learning these lessons are the foundation for business literacy. Education will begin your financial knowledge foundation. This simple task is often over looked and sadly dismissed as unnecessary. Usually by ignorant and or over confident entrepreneurs doomed from the beginning.

Your Accounting course will begin shaping your thoughts and questions in finance and business. Meaning you will become curious and personally teachable like myself. Figuring out through extended time and gaining more experiences “How business really works.” You need to be aware of when you may be getting robbed in a Board room and a fancy pen with unforgiving businessmen who have blank unemotional faces. I know what your thinking? Harsh? Yep! But I have to prepare you for the reality. I know you probably think I am completely nuts! Because of me slipping that in there. But truth is I have to keep you on your toes.

Being able to take raw numbers and data organize them in excel spreadsheets. Is how you make sense of business numbers and Profit Loss P&L Statements and more projections. Most entrepreneurs fail to consider metrics and numbers. When you can evaluate and know the numbers. This undoubtedly makes you more valuable and attractive as a Business partner. Speaking of partners and investors in business? Your bound to have disagreements. But most times its easily negated by active listening and personal collaborating.

Are You Creating Your Own Business Disasters?

Maybe you have been building your business, maybe you have spent your life savings and built a nice little business with a income stream to match. But you have one problem. Your margins are not allowing your business growth. What do you do? You have a few options. Keep growing at a small rate over time. Risking possible bankruptcy. Or B. Recruiting a Business Partner who can invest Capital or other possibilities to help you grow it fast. Example: Let’s say hypothetically your sitting at a table across from your new capital partner and She or He offers you $150,000 dollars to begin scaling the business. Do you take the money? Or do you ask more questions and try to collaborate? It seems likely many Small Business owners have difficulty in situations like this. If you go look at Business Equipment Financing websites? It’s littered with confused entrepreneurs who have made poor capital decisions. They just did not ask enough questions and did not use metrics.

I would first ask A.”How can we grow this together as a qualifying collaborative question? And B. “What are you looking for in return for investing this money?” Asking these starter Questions are great because they take you deep into collaborating together. Building a solid partnership. But for now let’s hypothetically say you do not take my advice. And you end up….Smiling at your new partner, take the check shake hands. Leave the meeting. And get busy scaling your business to new heights.

But! There is a problem. YES!! YOU HAVE A HUGE PROBLEM!! You have have no mutual understanding. And you have “NO PARTNER or Terms AGREEMENT!”

Agreement’s Mean Collaborating.

Ok let’s say you left that meeting deposited the 150 thousand dollar check in to your business account and began scaling your business right away. A little time goes by and your small business is honestly becoming bigger than you ever thought. The stream of cash flow coming in to your business accounts receivable. It’s powerful. LOL It’s wonderful. Then you get a call out of the blue. It’s your Partner. He or she is confused and annoyed and down right borderline furious. Your partner wants to know “WHY THEY HAVE NOT GOTTEN ANY INTEREST’S PAYMENTS?”

You assume you have been a responsible business owner and think to yourself “No problem. I got you!” And ask your partner “How much do you need for interest payment?”. Your partner responds “I need 25.00% percent on the principal.” And just like that! Your life and future business starts to crumble and spiral out of control all from the fact you failed to negotiate terms on the money. And you failed to negotiate your Partnership Agreement. Whoops. Shaking my head. Now you begin seeing doing a little prep work goes along ways.

The Sit Down

There is a reason the Italian Mafia or Cosa Nostra was very effective in business. They were great because they had the sit down! They had behavior Guidelines. Michael Franzese has some genuinely great content. I would highly suggest reading his books.

In the video above your gonna learn some invaluable business advice. And I mean invaluable. So pay attention Capeche? Good! Im gonna stand on my soap box for a second here and share with you some invaluable advice and experience. So pay attention please. In the Military you learn real fast that you will be punished severely for not taking responsibility for anything and everything and everyone as a team. So I suggest you take responsibility for your partnership and team. Recruit a Business Attorney to help you negotiate and prepare your interests for success. Instead of ending with headaches and certain failure.

Did you miss my Post about Creating Trust in Business Negotiations? It is a must read for anyone in business.

Click Here!

Back to military service punishments for a second. This is funny in a dark way. Their is a underlying theme to being punished in the military. And this transfers to almost every other part of your life. You are responsible for your behavior and all your future outcomes. This means taking responsibility for anyone, everything, and everyone associated with a goal in mind as you move to that objective as a team. If something falls short. Your mission is disrupted by a mechanical failure. Something breaks? Doesn’t work correctly? Even if something isn’t your fault? Step right up! Spin the wheel of certain misfortune. Guess what? It’s your failure! No one else’s. lol It’s 100$ definitely a cruel way to learn. But it does work.

The Knapkin Contract In Business

If you don’t have a contract or a Agreement written down? Tough Luck! Your Busted Out! Don’t be the victim.

Back when you first sat down and your Partner offered to give you $150,000 dollars to invest in your business. You should have taken the initiative to draw up a knapkin agreement. Negotiate favorable and collaborative investments terms while writing these terms out on a piece of paper at the table with the person offering you the money. You can do this in a Restaurant or anywhere a knapkin is available. At the end of your desired agreement you both sign this binding ad hoc legal document. Then take this document and have your Business Attorney finalize it as a formalized, and signed. This is how you should have done it in the first place.

Capitalize on this opportunity. Don’t ever feel the need rush things and always make counter offers. And do your best to prepare questions and what if’s to protect yourself and your new partnership moving forward. I hope you did gain something or some foresight with this post tonight. Thank you for reading everyone. Please do suggest a topic you would like for me to cover. I would be happy to do so. Email me at JamesonDocSharp@gmail.com

Goodnight & Goodluck!

JS

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Business Articles

M&A Attorneys Are Anything But Equal

Here’s the sad reality of calling large law firms as a local unknown Entrepreneur. Usually when I place a call to a one of several large M&A Law firms in Kansas City. I am usually immediately met with sometimes challenging impersonal and impatient attitudes. The Attorneys at these Law Firms forget they need our Business to stay in business. So if I may offer some guidance when doing exactly this, calling M&A attorneys. I would start with keeping the conversation as impressionable as possible. And about your mission. Become personal only after you meet them in person.

When a Business Attorney finally does pick up the phone or return your email do be Respectful. Be Firm and gently ask your questions while asking for their permission to help you both crush the marketplace. Service through cooperation. The above video shares some opinions about why a large law firm was having issues staying in business. Even though Im writing to share my experiences and some suggestions. I would share My opinion is just that. My opinion! I have a 1st amendment right to speak about the issues I have personally experienced with attorneys. I am not advocating all Attorneys are deceitful or bullies. But you must be careful who you select and who you place your trust into. Because they will try to get away with unacceptable behaviors at times. So please be informed.

There is one thing that stands out to me as a Entrepreneur and Business owner. And that is you must have a backbone and be able to work with aggressive and borderline disrespectful Attorneys. This post will share with you some of my experiences working with and selecting Attorneys. Some things to watch out for. And what to do if you feel outmatched or taken advantage of. Im not going to pretend that most Attorneys don’t have an adversarial reputation of treating people poorly. Not to mention they routinely treat serious entrepreneurs with judge-mental disdain. So with this information being brought to the table of discussion. I feel it’s my obligation to share with other Entrepreneurs “How to handle attorneys who are aggressive and treat you poorly”. Stay tuned this is gonna be worth the time and energy to read. It may just save your business career.

I would like to share a personal experience of mine. This experience had a profound impact on me to the point of knowing I could never allow any Attorney basic trust until they proved themselves worthy of my trust. Being completely honest. I feel you damn near need to hire counsel – to talk to counsel. LOL I do hope your having a laugh with this pessimistic tone I am projecting in my writing here.

Your going to find many Attorneys will likely prematurely and unfairly judge you. Speak down to you. Aggressively try to intimidate you with verbal or emotionally charged statements meant to covertly bully you. You will likely have Attorneys feign being nice while demonstrating micro aggressions during conversations. I do not deny I find most Big Firm Partners unworthy of trust. Until otherwise they can prove worthy of my trust. So this has been my experience. And I am sure most who have had to deal with large firm partners will agree with my observation.

But with all this said. You will eventually find Attorneys who will go to war for you. And these awesome Attorneys will do whatever it takes to make sure you and your interests are represented just like a good soldier on the Battlefield. Plus they will treat you like the Prince or Princess you are.

So do take this information and experience I am providing. And use it as you select, interview, or work with M&A Attorneys.

Here is some basic advice from me for you the Entrepreneur. To use when choosing and searching for a Mergers and Acquisitions Business Attorney.

  1. Not all Business Attorneys are the same. Choose your M&A Attorney based on the Previous Transactions they have completed. I will let you in on a little secret in the M&A space. Most Partners at Big Firms will assign your transaction work to their associate attorneys. Making them do most of the work. All the while smiling and sharing with you how hard they have worked.
  2. Furthermore It’s good to personally know and have lunch and dinner with your Associate Attorney who is doing most of the work for your transaction. They can be your warning alarm if things go sideways. In the end this associate Attorney will form a bond with you. This can be helpful during On & Off again negotiations or other times when you need that Associate Attorney to share “What you can do”, instead of “What you can’t do”. I hope you get my drift.
  3. Carefully select and interview the Attorneys and Firms you want working on your transactions. Make sure your a good fit for each other. Do you have good rapport? Be choosy. Don’t rush things.
  4. So many M&A law firms use templates for Transactions.
  5. Never ever pay for Up Front Fee’s without negotiating a billing agreement in place. Some Attorneys will bill you for the privilege of talking to them. This is a NO GO!!! NEVER EVER allow them to pull a stunt like this with you.
  6. Never go to an Attorney to be educated. This can and will cost you big time. Most Attorneys bill by the hour. If you seeking your Attorney to educate you? That will probably be the most expensive education you will ever receive. All the while they will smile and thank you for the opportunity.
  7. Make sure the Attorney your working with welcomes the opportunity to work with you as an Entrepreneur. You can easily test their mettle and authenticity. By asking if they have provided entrepreneurs in the past the same courtesy as you. And if they have? Ask them nicely to introduce you.
  8. Don’t expect your Attorney to want to be your friend. It’s likely they won’t want to be. Usually Attorney’s are unfriendly to Entrepreneurs unless you come in with Heavy hitters on your left and right.
  9. Always have a Mentor or fellow Board Member present when dealing with Business Attorneys. They are very used to taking advantage of Peoples ignorance or inexperience.
  10. Don’t be a bumbling fool who calls themselves a Entrepreneur. Never try to impress your Attorney. They won’t care anyways. And will likely assign disrespectful and profane pet names to you when your not around. I have seen it.
  11. Never allow a M&A Transaction Attorney the privilege of meeting your Mentors or Board members alone. Keep everything documented. And do be suspicious of any Attorney you do not know well. It’s so easy for people to cut you out of Transactions. In the end without the support and leadership of your Chairman? You are the weak link. I have seen this happen unfortunately. It’s not pretty.
  12. One last thing….. Be suspicious of money matters and always use other Attorneys for your benefit. You want to be a informed Entrepreneur with second and third opinions.

Please take these suggestions as loose suggestions only. Be informed. And it may come in handy one day when you have a suspicion that well founded. I would also look for my other post about “Wall Street Attorneys as Secret Weapons” read that as well. Thank you for reading. I do hope you find an Attorney who is suitable and is a proper and comfortable fit. After all they are one of the most important puzzle pieces to have as a Business owner and Entrepreneur.

JS

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Business Articles

“Wall Street Lawyers” are secret weapons in Business

Business owners and Entrepreneurs I would highly suggest you reach out to current or former “Wall Street Lawyers” “Attorneys”. Just having a few as personal friends can and will enable you to bypass the normal road blocks entrepreneurs encounter. Examples? Taxes, fund raising, advice on forming a LLC or partnership or other advice. It’s the only way to move forward as a Entrepreneur. They honestly are that damn vital for your shared personal and professional success. Period.

I would love to take this opportunity to share a Wall Street Transactional Business Attorney I just connected with. I connected with him by watching his energetic online videos, and just reaching out about his guidance in his videos.

Mr. Ennico is an Best Selling Author, Entrepreneur Columnist, Business Attorney, Community Leader and My Friend who is going to be on our Finance Podcast. His insight and energy is on point and I can’t imagine not having his input and advice as I navigate the Executive halls of Corporate Negotiations and deal making. His name is Mr. Cliff Ennico ESQ.

I am very happy to add, Mr. Cliff Ennico to my Website of Business Professionals. Cliff has authored several invaluable books for Business Owners. And between me and you? I have to list a few important content platforms about Mr. Ennico that should be mandatory for all entrepreneurs to read and watch.

Cliff’s Youtube Channel – A must watch for anyone who is in Business.

Cliff Ennico’s YouTube Channel “CLICK HERE!!”

Business Book’s

“Crowdfunding Handbook Link Here”

As you can see Cliff is certainly an expert in the Field of Law. Please feel free to reach out and watch his video’s, check out his impressive content collection of Books. His website is certainly full of interesting content that is helpful to Entrepreneurs and Business Executives alike.

Thank’s Again Cliff. Im happy we connected good sir.

JS

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