This is the first step that we take with each of our clients. We help the business owners we serve build what we refer to as "The Real Wealth Matrix", a multi-layer structure of business entities that help the owner stay protected from any external force; creates the optimal structure for Tax Avoidance; and serve as a rock-solid foundation for future growth.
Each Real Wealth Matrix is totally customized and personalized to its owner, but the general frame for it is the one explained in the training in this page. On the bottom of the structure, we have have your operational companies, the first layer. All these operational companies will be LLC taxed as disregarded entities. Even though each LLC in this layer will have its own bank accounts, and will have its income and expenses, everything that is left when the year ends, will flow up to the second layer, the Holding Company.
The Holding Company is an LLC taxed as an S-Corp. The main purpose of these HC is to manage your different operational companies. Having this structure allows you to just file 1 Tax Return for all of your different businesses, among several other benefits. This HC will be owned by your Trust, the third layer.
Your Trust will be a Revocable Living Trust. We highly recommend that this Trust owns no only your businesses, but all your personal possessions (boats, planes, cars, houses, bank accounts, etc.). You personally will set up as the Grantor, Beneficiary, and Trustee. Now, for the first time, your personal name comes into play, in the third layer (The third layer if you have this basic Real Wealth Matrix)
There are multiple benefits for an structure like this: