[00:00:00] Welcome to The Financial Call. We are financial advisors on a mission to guide you through the financial planning everyone should have. Whether you're doing it yourself or working with a financial advisor, these episodes will help you break down complicated financial topics into practical, actionable steps.

Our mission is to guide motivated people to become financially successful. This is the last episode within the charitable giving category, right, Laura? That's right. So, Season 7, this is Episode 5, Business Exiting Charitable Strategies. It says right now, Business Exit. I think we need to change that. I don't know.

But you get the idea. We're talking today about if you own a business and you also give to charities, there is an opportunity to take advantage if you are going to exit your business, take advantage of your charitable giving to reduce your taxes. That's the bottom line. So we're going to talk about how that works today.

If you are not already giving to charities, we're not trying to tell [00:01:00] you, you need to give your money away. Sometimes people put the, really, your priorities are what matter most here. And then within your priorities, we try to minimize taxes. We're not trying to tell you to do something entirely different than you want to, in order to just control taxes.

I often tell people, if you're already donating to charities, we can do it in a more tax efficient way. But if you're not giving to charities, fine. We just won't account for that. But some people do say, well, I'd rather pay to a charity than to Uncle Sam. And typically, just so you guys know, if you give $100 away to a charity, you're usually going to save somewhere between $20 to $50 in taxes, depending on your tax rate.

So, it's not a one for one. It's not a situation where you can say, well, I'd rather give that $100 to a charity than that $100 to Uncle Sam. Right. It's giving more to a charity or less to Uncle Sam. You got it. So let's talk about how a complex asset donation works. In particular, [00:02:00] if you have not listened to any episodes about donor-advised funds, it would be good for you to maybe pause and go back a couple episodes, learn about donor advised funds.

I did a couple of episodes about donor advised funds way back before we started any of the Guided Path series. If you are just catching up to us and joining us with just this episode, because this topic pertains to you, let me give you a quick refresh. We are on Season 7 of 8. Each season is a particular financial planning or wealth management topic.

And then we start from start to finish. We go from basic to more advanced inside that topic. So, this topic is charitable giving and strategies around charitable giving. And we are on the more advanced end of the charitable giving category. So if you haven't, just the episode right before this one was donor advised funds.

And then the very first one in this season, 7-1, talked about donating cash versus stocks. Now when I say [00:03:00] stocks, uh, typically we're talking about publicly traded stocks. Privately held businesses you could also consider very much like a stock. You can donate shares or an allocation of interest. or percentage of your business to a charity.

Now a lot of charities are very good at what they do, but they're not very comfortable becoming a limited partner in a random business. So let me give you an example. I helped a group who had storage units sell their storage units in this way to avoid a bunch of taxes. So, the idea is they were eventually going to give money to a church, but the church isn't necessarily going to be super comfortable becoming a partner with them in a storage unit business.

Like there's a risk of that going on for a really long time. And there are complicated aspects of that where a charity, if they have a bunch of income that's [00:04:00] unrelated to their entity, then it could be considered unrelated business taxable income, UBTI, or sometimes they say UBIT, UBIT, unrelated business income tax.

So either way, it's a tax associated with income that doesn't have to do with the charity’s work and it has to do with them being or receiving income from other activities. So I'm just throwing that out there so you know that there's some complication, but let's bring it back to what the original thought here is.

If these two partners are going to sell their storage units at some point in the future, they will pay capital gains on the entire cell. Any capital gains right now, so it's 2023, for a couple filing jointly, if they have more than $250,000 of income, the Medicare surtax kicks in. That's a 3.8 percent charge on investment income.

And you might think selling my business is not an investment income, but it is to the [00:05:00] IRS. It's, they're looking at it like you have a capital gain, which falls in the investment income category. So that was part of paying for the Affordable Care Act back when Obama was in office. So that would be in addition to their capital gains rate.

So, if they have a 20 percent capital gains rate, they'll add on an additional 3.8%. Yep. Now, the rates change from 15 to 20 percent for the normal standard capital gains rate for a couple at about $550,000. So, from, there's actually a 0 percent capital gains bracket. Not a lot of people realize that, but from zero to about $80,000 for a couple, that's 0 percent tax.

From about 80,000 up to 250,000, it's 15 percent tax. And technically, the 15 percent goes all the way up to $550,000, but there's this extra 3.8. So we just call it the 18.8 percent bracket from 250,000 up to 550,000. Then from 550,000 up, it's going to be [00:06:00] 23.8 because it's 20 plus the 3.8.

Okay. So that's the amount of federal tax savings, we're not talking about states because we have listeners in all states and each state's a little different. Some don't have tax on this. Some do. For some, it's really high. For some, it's moderate. You know, four or five here in Utah, you're going to pay about five.

For these folks here in Utah that we helped with storage units, they are going to avoid 28.8 percent tax on gains if they don't have to show those gains on their own tax return. Now, these two partners don't have to show each other's gains on their own tax return, because the other partner is experiencing it. They're not the owner. Yeah, of that portion.

So, the concept is that these two partners can bring in a third partner, and that third partner is a charity. They can bring in the third partner. And therefore, the third partner has to experience the capital gain instead of them. Now, this third partner is a special charity. It's a donor-advised fund.

It's [00:07:00] a charity that will coordinate with them. They are what's called account holders. They're no longer owners of that money or of that asset and they are account holders. So, they donate a certain portion of their business to the donor advised fund, and now there are three partners. So, whenever that sell happens in the future.

The three partners go through and sell the business, and the capital gains are reported based on their percentage ownership. And that is how every $100,000 worth of capital gains that they would have experienced, but that they didn't because it was sitting in the DAF, saved them about $28,000. $28,800 in taxes.

So that's a really, like, quick and dirty way of looking at the idea of saving capital gains. Now, some people will say, that sounds like a lot of work. I'm just gonna donate cash afterwards, cause I get a standard, I get to itemize that deduction, and I'm just gonna donate the cash afterwards, and I'll still get to reduce my income by that [00:08:00] $100,000 donation.

That's true. But so do these guys. Because when they added the third partnership to the charity, they got the deduction for giving it to them. It was a gift. And then they didn't have to realize the gains. You got it. So, it's two things. You get a benefit twice. You get a benefit from the value of the donation to the charity.

And then you also get to benefit from the avoiding of the capital gains when it eventually sells. Now, I keep saying things like, whenever it sells and when it eventually sells. Now, those two things tend to be pretty close together, but the IRS does not like when those two things are really close together.

If they're too close together, and if it's all just a formality, the IRS will say, hey, this is an assignment of interest. You're just assigning the income to another entity. You can't just do that and play games with taxes that way. There needs to be reasonable risk that the business sale isn't a done deal.

It's [00:09:00] not already inked and completed. So, if there's reasonable risk that it's not going to go through, it does open the door for the risk that you end up with the charity on your business long-term. But that also opens the door for you to be able to, to actually get the tax benefits of doing it. In your experience with these, Zacc, what's usually that time frame that people need to watch for?

From, I guess, just to clarify, from adding the donor-advised fund to the partnership to the sell of the business. I've seen it as short as like five or six days, and then I've seen it as long as months. Haven't seen one go over a year because usually by time the owner gives away an allocation of their business to a charity, they're pretty certain at some point they're going to try to sell that business.

And so, it usually doesn't last a crazy amount of time. But the five, six days didn't trigger anything with the IRS? We'll see. I'm not their tax preparer, but, and I helped them, I let them know about, here are the risks, here's what's going [00:10:00] on, like, and everybody else felt really comfortable. They said, this thing is still not settled.

Like, that was one where, like, it was up in the air all the way till the last day, whether or not that thing was going to go through. And the buyer doesn't ever have issues seeing now a third party on there? Sometimes they will want to know what's going on a little bit. Like, wait a second. I thought we were buying this from this person and now we're not, but usually most, I've never had any buyer back out of it or really stress about it much.

Most of the time, they understand that when someone exits a business, they're going to do a bunch of things to try and make sure the right entities, like maybe even within the estate planning, they might have a certain trust receive the assets instead of them or another partnership. It's pretty normal for that to happen.

So, most buyers are pretty aware of that possibility, and they don't really care. They're going to get the business for a certain price. That's what they care about. What I have found though is that this is the last thing on their minds, which I totally get and I understand why. On the seller's mind? Yeah.

Because they're [00:11:00] like, listen, I feel like I'm counting my eggs before they've hatched here a little bit. If we're thinking about this, I want the money in the bank and then let's talk. And it's like, well, the hard part is that's too late, but I get what you're saying. Like I totally get what you're saying.

And, and deals fall through all the time. So, I can understand why their life's work, which is probably a business they built over decades, that they're a little bit stressed about that. And on top of that, the process of actually selling a business. You're going through a crazy amount of negotiation and terms.

And do you have an earn out? How likely is it for you to hit your earn out provisions and get the extra payouts? Do you have certain assets that are being sold in certain assets that are not being sold? Is it, is it a whole business entity or asset sale? There's a lot going on there. There's so much possibility of someone suing someone later that you really want to button up a lot of that.

And so, this is usually one of the last things that people are ready to talk [00:12:00] about. And we do have a full episode on this for business owners. We brought in some professionals as well, so you can go back and listen in the business owner season about some of those options you were talking about. And it's a pretty permanent addition to your business, your partnership.

Once you add the DAF or once you give anything to a DAF, yes, you are the, the manager, you can decide what happens to it from there, but you can never take the funds back. Yeah. So, the assets that you donate to the donor-advised fund, those are under your control. But to Laura's point, you don't get to pull them back out and be like, I changed my mind.

I'm going to use that for my kid's school or whatever. They're considered donated assets. To a charity and then at that point you can, again, I don't want to go over DAFs too much because we have other episodes, but for those who are just, who still are listening, basically it's an account that you can then give that money to other charities in the future.

Or you can invest it really, really long term. You don't have to give it away right away [00:13:00] and it can grow and grow and grow all tax free to be given to a charity in the future. Going back to the idea of this whole donation, it was funny when I talked to the storage folks, apparently I didn't explain it very well, because I tried to explain it to them, and they asked me the question, well, gosh, we don't have that much cash in the business to give to the donor advised fund.

I told him, oh, hold on. That's not how this works. It's actually just a one- or two-page document that we write in, you're going to give whatever percentage, like 2.687 percent of your entity or five point whatever, you know, they just calculate exactly what the value of the business is, and then we decide how much of it you want to give, what amount of donation you want to do, what you think it's going to sell for in the future, and you just assign that over by a wet signature.

Like, you don't have to move any cash. And that was a little bit, that can be a little confusing for people because they think, I don't have the cash until I sell, how am I going to give that to charity? It's like, you're not. You're going to write on a document that they own a piece of your [00:14:00] business and that's it.

And that agreement, that contract is an actual donation, and that's why the IRS says, we'll let you deduct that as a deduction from your, a charitable deduction from your taxes. And you've done this for a beauty line company as well? Yep. Okay, so storage units, landscaping business, beauty product business, just a bunch of different business types like that.

So, most businesses can qualify for this. Yeah, real estate gets tricky. Rental property or something like that, then the way that real estate gets depreciated is, it's not as advantageous from a charitable giving standpoint. But businesses, yes. And some of those were asset sales, and some of those were entity sales, so there's a little bit of a difference between in one of them, they had a bunch of equipment and trucks and things like that.

And they were selling that. They were also selling the brand, like the goodwill of the brand and the contracts and all of that. But there was a piece of real estate that was to be [00:15:00] retained by the original seller. So, it was like 98 percent of the value of the business was being sold, but this one piece of real estate that the business did own was actually meant to be kept and retained.

So, it was an asset sale rather than a full business sale. And that can get a little bit tricky because you talked about, once you give it away to the donor-advised fund, it is done. Once you add a donor-advised fund onto the business, there are mechanisms that could potentially allow you to buy that back off.

So that's what happened in a couple of these cases where, like one of them, they sold only half the business. They didn't sell the whole thing. The goal was to sell half the business, bring on strategic partners that could help grow the business even further, and then sell the other half at some point in the future.

So, they brought the donor advised fund on. But then, you know, you think, okay, if we only sold half the business, then we only sold half of what the donor-advised fund had. So, there are ways that [00:16:00] you need to be really careful to understand, like, can we legally, of the half the business that's purchased, can we have the donor-advised fund be wholly purchased out?

And then the rest of the partners remain in, or the other one, I had one where there was a triggering event where if the business was sold, then there was the right for the business to buy any minority partners out. And that language had to be in a very specific part of the operating agreement, but that's why these get complicated.

And you work with your attorney and they had to fit that in and the business attorney said, yeah, I'm comfortable with that language. So that was built into the operating agreement. And then that one took us about a year and a half to completely finish after the business sold. It took us about 18 months to get through all of the steps.

And in fact, I actually got an email about three weeks ago on that one still. And it's been, it's actually been two or three years, but the reason is, and I think this is helpful for people to understand. So first let's talk about the benefit. The benefit is you can save a [00:17:00] lot of money. If you're selling a business for 20, 30, 40, 50 to a hundred million dollars, and you're charitably inclined at all, like you're thinking, I'm going to give 1 percent of this to a charity and you drop a million dollars into it.

It'll probably save you about $300,000 here in Utah. So that's a pretty decent tax savings. If you can get some professionals to do the heavy lifting for you, people like us that can dive in and kind of quarterback the traffic and the communication, and then your CPA and the attorneys and the donor-advised fund people to coordinate well with each other.

That's a good use of your time. You save $300,000 in taxes and there are going to be some fees for some of those people. Capita doesn't charge any fees on our coordination of that, of that effort. We just do it for our clients and hope that it also helps win clients and things like that. But there are fees for some of the other folks and other parties involved.

For example, when you give that money or give that asset, I should say, to a charity and you do the assignment of interest, there has to be a valuation done [00:18:00] so that you know how much of a deduction you can take. And without fail, every single time, the owners are always like, I sold the business two weeks later.

The value of the business is what somebody would pay me in cash. We know exactly how much it was worth because it's sold two weeks later, let's use that number. And that's actually a little bit risky because then you're kind of signaling to the IRS, like it's an assignment of income. So, you can't say that the sale is the value that it was two weeks ago.

You actually need to do an independent valuation, which is a little bit of a hassle and costs. I've seen some cost $50,000 and I've seen some costs two. And some of that has to do with how complex you need it to be. Like if you're going using that particular valuation to determine the actual sale price.

You probably want it to be more in depth than you want to be more robust. You're going to pay more for that. But if you're just using that valuation for the sole purpose of your tax deduction calculation, you're going to want to [00:19:00] save some money on that valuation and go on the lower end and not have them go crazy in depth and dedicate a ton of employee time to gathering all the data that they're asking for.

Especially if you already know the sale price. You know the sale price. Exactly. And so if you know the sale price and it, your valuation comes in way different than the sale price, you can go back to the valuation expert and say, Hey, what are we missing here? You valued this business at 40 million and the person buying it potentially make, giving us an offer to buy it right now for 75, we're missing the boat here a little bit.

What are we missing? And so, then that can help the valuation expert. So going back to those are different events. And so sometimes you need a valuation for when you do the assignment of interest to the donor advised fund. Sometimes they'll want another valuation because valuations are done with specific lenses on like the valuation expert is going to say, oh, I did it with the idea of it being a minority interest, which has a discounted value because you have less control [00:20:00] versus this other valuation done.

Because they're buying the whole business and because they have a majority control, that's worth more to them than having a minority interest. So, there are different factors that can change the actual value of 1 percent of a business, depending on what, which lens you're looking through. So, the valuation's done for the assignment of interest.

Sometimes, another valuation needs to be done for the actual legitimizing of the sale price, the actual sale price, and then if there's a triggered buyout in the future, six months, years down the road or whatever it is, to maybe buy out other partners or buy out residual DAF ownership or something like that, then another valuation likely will need to be done at that time too.

So, the valuation costs can rack up. So sometimes if somebody says, hey, I have this business and it's worth $300,000 and I'm going to give $30,000 of it to a charity, I'll look at that and say, you're probably not gonna save enough in taxes to warrant the valuation costs and the [00:21:00] professional fees to get the actual transaction done.

There's a line of how much you're gonna donate, how much is your business worth. We can estimate, you know, what the appraisal costs will be and the tax savings and that's something that we can do. We can give them a rough idea knowing how much our different network partners charge and how much tax savings they're likely to experience and give them a rough idea and say hey, this is not worth your headache or it is worth your headache and given the fact that we don't charge on it, it's kind of nice because then we don't really care whether they do it or not.

Yeah, true. And it's nice to know before you go through the hassle and rack up those fees to know if it will be worth it beforehand. Okay, so that's donor-advised funds. So that's a strategy that you can use where you assign a portion of the value of your business to a charity. It's a special type of charity because you still get to maintain control over those assets in terms of what end charity they go to or when they go to a final charity.

But you get the tax deduction in the year you assign the interest over. And you avoid the capital gains [00:22:00] whenever the business eventually sells. So there's double tax benefit. It's one of the only, I've said this before, it's like one of the only ways that I know of where I've been able to save a client hundred, two hundred, three hundred thousand dollars and in one case over a million dollars of taxes.

Really. Yeah, it's like the only scenario where in my entire financial planning career started in 2007 right before the 2008 financial crisis. Great time. Great time to get into the industry. Yeah, and it's the only strategy that I feel like I've been actively, I know there are others. But that's when people have hundreds of millions of dollars, then it's easier to save them, you know, a $500,000 in taxes based on trading in the portfolio.

But it's the only strategy where I can take somebody that may have a business worth 5 million or, or 10 million and actually save that kind of tax. The highest percentage of savings. Yes. It's really fun one to see finished. It's from, from our standpoint, it's not necessarily the most fun to get through [00:23:00] because it is so complex because usually, we're actually training the CPA.

The business CPA has never seen this before in many cases. So, you're teaching the business’s CPA what's going on and helping them feel comfortable with it. And then you're also teaching the attorney, the business attorney, what's going on, helping them feel comfortable with it. Then you're going back to the other professionals who do it constantly and you're translating between them.

And you truly are quarterbacking the whole sale of it. Not the sale. I mean, just the charitable portion. Just the charitable portion. Yes. Because the reality is we're not designed to be mediators in a business transaction and helping you get the best price for your business. I mean, we're sitting in the background for that part, ready, like in the wings to say, okay, are you ready?

Let's go. Let's save you on taxes for your charitable giving. Okay. Okay. So that is donor advised funds. When you're giving, we call it a complex asset donation. I wasn't involved in these, but I've heard about a pig farm. I've heard about vending machines. I've heard of, like, [00:24:00] there are a lot of different types of assets that I think the first step is just, if you have something unique, the first step is to talk to us about that and say, hey, do you think this could go into a donor advised fund before I sell it?

And that's the important thing. And two, second most important thing is to talk to someone about this before the sale is too far along. Or else you're running some risk. You won't experience that risk until years later when the IRS, if the IRS decides to audit you, then you have the burden of proving that it's not assignment of income.

You know, you find out about that later, but so far, I mean, I've been doing this, let's see, the first one I did was 2015 or 16. So that puts us about seven years out. Yeah, it was, it was before this time of the year in 2015, early 2015. So yeah, we're about seven, seven and a half years out. And I haven't had anybody come back and say so far that they've had to deal with proving this, which is good.

I'm going to move on to [00:25:00] charitable remainder trusts. This one is a little bit less involved. We're not going to go into all of the details of how these work. I want to teach you what they are, and they really need to be reviewed with an estate planner. Typically, it's an estate planning attorney that will know how to use charitable remainder trusts well.

So, a charitable remainder trust, the name of it? Somewhat describes it. It's a trust in which the remainder will go to a charity. So, if we just reverse the letters. They call them CRUTS or CRATS and the U or the A stands for Unitrust or Annuity trust so that has to do with whether you're taking out set dollar amounts or percentages and we're not going to go into that too much.

The key thing to understand is the C, the R, and the T. Charitable remainder trusts. So, the way you set this up is you could put a million dollars into a charitable remainder trust and get a tax deduction for having done so. You could then [00:26:00] take maybe $50,000 out every single year as income to you from the Charitable Remainder Trust.

So trusts typically have two major benefactors, or two parties that are very involved. And this is normal trusts too, so I'm not talking about just Charitable Remainder Trusts. There are current income, let's call them income owners, but the terminology they use as income beneficiaries. But when you say the word beneficiaries, people think that somebody has to die to get it, but that's not what we're talking about here.

We're talking about the current income people and then the remainder people. So, there's the remainder of the balance that goes to somebody. And then there's the income that goes to somebody. And I'm avoiding that word beneficiary on purpose. So, there's the income people and the remainder people. And the way a charitable remainder trust works is you take the remainder people and you just replace them with a charity.

So, whatever's left over goes to a charity, but the income still goes to people. It still goes to you, [00:27:00] typically. So, you get this tax deduction for dropping in the million dollars and that's calculated based on what some tables the IRS uses and what they expect to have left over based on reasonable interest rates and how that works.

Which portion is actually going to go to the charity at the end? And discounted for today's value and, you know, they give you a tax deduction for that, right? Then you take the money out and you have to show that as taxable income as it comes out to you, but then you might live a long time and get more than a million dollars back out and you avoided, well, you were able to get a pretty good tax deduction.

So that's just the tax deduction side. Now, the reason a charitable remainder trust could be really useful in a business sale is now I'm just going to throw out there if it's an S corp, this is probably not going to work because an S Corp cannot be owned by a non human. So, it doesn't have a belly button, can't own, trusts don't count, [00:28:00] LLCs don't count, partnerships don't, you know what I mean?

No belly buttons there. So anyway, he basically said that, well, sorry, so S Corps don't work. If you, because a CRUT is an entity. And so it cannot own an S Corp or CRAT or whatever you want to use. So, going back to what could happen. So, with one of the businesses I told you about with the donor-advised fund, we actually explored taking the whole business and moving it into a charitable remainder trust, instead of just the portion he wanted to go to charities.

So, like $10 million to a charitable remainder trust. That would avoid capital gains on the whole thing, rather than the portion going to the DAF. So, we talked about donating $1,000,000, saving $300,000. If you donated $10,000,000, you could save $3,000,000 in capital gains tax because it hits the charitable remainder trust.

Then that person might take a half a million dollars out as income and get to spread out that tax liability over a really long period of [00:29:00] time as they take the income back out. In the meantime, they could invest that $10 million in real estate projects, in investments like stocks and bonds, in markets, whatever they decide.

There are some restrictions, but it's pretty broad. And then they're able to take that money back out, and they avoided all that capital gain tax, and they were able to get a tax deduction for that big donation in. It works very similar to a donor advised fund. It's just a little bit different because the mechanism is you put the money in and then you take income back out and what's left over goes to charities.

Whereas a donor advised fund, you only put in what you know will go to charities without income expectations back to you, and then you leave it there or give it to charities. So, similar but different. And then lastly, because when you set up the trust on a charitable remainder trust, you're supposed to identify the charity.

What people actually do is they grab a DAF and hook it to the back of the Charitable Remainder Trust so that they can change the end charities within the [00:30:00] DAF paperwork or within the DAF account login very easily and they don't have to commit to one charity when they set up their trust, you know, five, ten years ago.

Or they could list multiple charities on the DAF. Yes, exactly. On the trust you list the DAF and then on the DAF you can update that whenever you want, list as many as you want, do whatever you want there. That facilitates a concept of just keeping your options open. They call that degrees of freedom, you know, multiple future pathways.

That's a concept a lot of clients really appreciate in a financial planner is not pigeonholing them into just one end path. Yeah, so if you sat down and met with somebody, what are some things that you're thinking about when you're deciding between going with the DAF scenario, the DAF option, or using a CRAT or a CRUT?

How charitably inclined they are. If they're really charitably inclined, a charitable remainder trust might be a little bit better for them. What entity type they're working with. If they're sitting in an S corp, that was the reason we didn't go this route, is because the entity being sold was [00:31:00] an S corp.

And it immediately would have caused all 10 million to be taxable. That 3 million in tax savings we were talking about is gone because it would have been a deemed sale and it wouldn't work. So, the entity type. If you're in a C corp, I'm not going to go into this, but there's something called 1202 stock and founder stock.

I mean, there's opportunities there that are completely different that have nothing to do with charitable giving. That could save you a lot of taxes too. So, the first step is if you're looking at just between CRAT/CRUT versus a DAF. It's what is your entity type, how much of this money do you eventually want to go to charities, what is your tax liability if you were to take the rest of it as current capital gain versus spreading it out over multiple years.

And what are the costs and complications of setting up either path? And a little bit on, with your real beneficiaries, you know, who you want to inherit your estate, because the CRAT and CRUT, it's whatever's left over is going to the charity. Yeah. Now [00:32:00] ideally what's happening is you live a long time, and as you take that money back out, you're setting it into a new estate planning structure where it has your kids maybe as remainder beneficiaries on those assets as it flows out.

And so, that's kind of like just doing an installment sale almost to be able to spread out the capital gains. I mean, you could think about it like that way a little bit. That makes sense. So, both really could be a good option for people, but it makes sense to sit down, evaluate your goals, your business, and just make sure you're doing what's best for you.

We know this stuff because we sit in the room and talk to clients while they're working with their estate planner on it, but we're not drafting trust documents and we're not the final say on this is exactly what needs to be done, right? Ultimately, the client has the final say, but in this scenario, we typically will pull people in who specialize in business exits, like the Fabian VanCott folks that we had on the previous episode, um, back in the business owner section, [00:33:00] or an estate planner who specializes in charitable remainder trusts, but the benefit of having somebody like a good wealth advisor is we can interpret, we can speak the lingo, we can translate it into real terms that everyone uses and can understand.

Like the income people and the remainder people, you know, those types of communication we can help translate. And also, we can just keep things on track and understand what's going on. So, I would say that's what you need your financial planner to do for you in this type of scenario. But being honest, like this is hard to be super familiar with these strategies as a financial planner.

It's hard. And a lot of financial planners shy away from it because of the complexity. And there's a decent amount of risk that things can go wrong here if you don't follow it well and know like, oh, if you have certain inventory, that can be considered a hot asset, which can be a problem. Like, I don't know how to fix that, but I know that it exists.

And I know that we need to have that conversation with the CPA before we sell. That's the type of help that I hope that we can help people along the way. [00:34:00] Just having somebody in your corner to provide a good network of experts that know what they're talking about and help you avoid potholes and not miss opportunities as well.

You and I did an episode on having the right network back in the business owner section. This is an example of that, like having, having access to the people who know how to do this and do it multiple times per year. That way, you know, we probably do one or two a year. They're doing 15, 20, 30 a year.

So that's, that's nice to be get access to them. Yeah, awesome. That's it. We did it today. Awesome. This podcast is intended for informational purpose only and is not a substitute for personal advice from Capita. This is not a recommendation, offer, or solicitation to buy or sell any security. Past performance is not indicative of or for future results. There can be no assurance that [00:35:00] investment objectives will be achieved.

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