Many Florida real estate investors believe their estate plan has them covered. In this episode of Trust This, recorded at the Wealth Council Symposium in Las Vegas, Asset Protection Attorney Joe Seagle shares a story that shows why that assumption can be costly. A couple came to Aspire Legal Solutions with an excellent, recent estate plan: two revocable trusts, pour-over wills, durable powers of attorney, health care surrogates, and living wills. They also owned ten rental properties, a mix of short-term and long-term rentals. Yet not a single property had been placed into an LLC or a land trust, and their prior attorney had told them land trusts were not worth the effort.
That gap is the difference between estate planning and asset protection. An estate plan is the foundation. It addresses what happens if you die or become incapacitated, helps avoid probate, and may reduce estate taxes. But a foundation is not a finished house. As Joe explains, stopping at the estate plan is like pouring a slab with plumbing stubbed through it and walking off the job, with no frame, roof, or walls. Asset protection builds the rest of the structure: LLCs to separate liability, land trusts for privacy, and trust provisions that give the trustee authority to hold LLC interests, land trust beneficial interests, and S corporation stock.
Older trusts often lack those powers, so Aspire Legal Solutions frequently restates and amends an existing trust, or drafts a new one when nothing was ever funded, and then builds the protective structure around it and guides clients through funding it correctly. If you own rental property in Florida and are not certain your estate plan actually reaches it, now is the time to find out. Watch the full episode, then schedule a discovery call with Aspire Legal Solutions to review your structure. This is general information, not legal advice; consult an attorney about your specific situation.
Transcript
Okay, so I’m getting ready to go on for my talk today at the Wealth Council Symposium. You can see here I’m a speaker today, and I will be talking about land trusts in Florida, but also in all 50 states and how those work. So I just wanted to talk to everybody today because I get a lot of questions, especially here in Vegas, of what’s the big difference between a asset protection lawyer and an estate planning lawyer. And they really go hand in hand, but let me tell you sort of an anecdotal story to really set the mood for this discussion today.
I have clients who come to me all the time, and one of the things that we ask for as part of their activation call when we first meet with them is, of course, we ask for all their LLC documentation, all of their current trusts and everything else they have, but we also ask for, of course, any estate planning documents that they already have.
Well, I can’t tell you how many times people will bring us their estate planning documents that they have, and they’re great estate planning documents. There, some of them are fairly recent, even. I had one the other day that was from the when was it 2022 and the documents were good. Don’t get me wrong, the documents were really, really good, but they had not funded one thing into it.
So these folks had paid all this money. They had tons of properties, tons of investment properties in Florida. They had a great, they had two revocable trusts, one for the husband, one for the wife. They had pour over wheels. They had all the ancillary documents, the durable power of attorney, the healthcare surrogate, living wheel, all that great stuff that goes along with it. They had all of that, but not one piece of real estate had been moved into an LLC that had been put into a land trust. In fact, they told me that their s their their estate planning lawyers had told them flat out that land trusts provide no asset protection Oh. anyway, so don’t bother.
And that really struck me that this estate planning attorney, who they were obviously great at estate planning. Was not focused at all on their asset protection, and these folks own 10 rental properties. Some of them are short-term rentals, some of them are long-term rentals. But the tying them to that railroad track and hoping a train doesn’t come was insane to me. So I. Really, that really drove home to me the difference between an estate planning lawyer and an asset It’s difficult for you protection lawyer. to answer a statement. Right there, I really, really saw the difference right there.
Now, what we do then is, of course, we review those documents that they have for their estate plan because you have to have an estate plan. I always tell everybody that is like the slab you’re building, the foundation you’re building for the house, and you have to have that estate plan because the estate plan is going to deal with what happens if you die. Disappear, divorce, get a judgment against you, for future generations, everything else. That that estate plan is going to deal with avoiding probate, and also maybe even helping to to reduce your estate tax, should that become an issue. So the estate plan is absolutely the foundation for everything. But from there, that’s just the first step, folks. The estate plan is just the first step.
So many estate planning lawyers go, “Okay, great, we’ve done it. Now here’s a big, thick binder of paper that we’re going to give you that says everything we are not going to do for you. We are not going to create your LLCs. We are not going to create land trusts. We are not going to make sure that deeds are done to to get everything put into those LLCs and into those land trusts and everything else that needs to be done to ensure.” That that is done, and I hear a lot of estate planning lawyers say, “Well, clients don’t want to pay for that,” and I go, “Well, then you’re not you’re not telling them properly what you’re going to be doing and the importance of it.” And and and to me, that’s your job as an estate planning lawyer to explain why it’s so imperative that you do it, Fuck. but then also do it and charge for it, of course. And the client should pay for it because that is sort of the the last.
Thing there, I told a client the other day, I said it’s almost like the estate planning lawyer poured this great foundation, built this great foundation. They had the the tubing coming up for the electrical and the and the plumbing and the sewer and everything else was coming up through the the slab. And then they walked off the job and said, “Great, hope you like your house.” Would you want to move into a house that’s nothing but a slab or a foundation with some some pipe coming up through it? No, of course not. They didn’t even put up the frame. They didn’t put a roof on. They didn’t put up drywall. They didn’t they didn’t put in the cabinetry. They didn’t put in the carpet and the flooring. That’s what an asset protection lawyer does. An asset protection lawyer takes that ass that that estate plan.
Usually we have to beef it up. I’ll tell you that too. A lot of times we have to beef up that estate plan because the trust agreement itself doesn’t include a lot of the powers. That we need the trustee to have to deal with land trusts beneficial interests, to deal with LLC interests, to deal with S corporation stock. We see a lot of old trusts that were drafted before the qualified business for S corporation rules came about. So we have to restate and amend the trust. Or in the case of a client where nothing has been put into the trust in the first place, we just go ahead and do a whole new trust, and then we fund it and we do it right. But that’s what an asset protection lawyer does versus an estate planning lawyer.
Now I’m going to get out of here. I’m going to talk to a bunch of estate planning lawyers, probably some asset protection lawyers too, some business lawyers out there from all over the country. If you like this video, of course, like it, subscribe to our channel, keep up with things like this, but also. If you have any questions, comments, please leave them below. We love to get your comments and questions and answer those for you, any way we can. And until later, trust this.
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