I have clients come to me all the time and they’ve gotten one story from one attorney and another story from a different attorney and they don’t know which one to believe or what’s happening. What’s happening is a lawyer only has so many tools. A carpenter only has so many tools. Here’s the question: Does a hammer drive a nail in? Or does it take it out? Well, it depends on how you use it.
Lawyers have trusts and corporations and LLC’s and wills and all of these things. The question is: What do you want to use them for? There are three facets to each one:
- Taxes – can I use this to save money? Well, with an LLC, yeah, you’ll save a lot of money on your income taxes! (If you know how to use it!) Problem is you’ll get the tool but no teaches you how to use it.
- Asset Protection
- Estate Planning – passing your things onto your family when you pass away.
Why Lawyers Answer Can Differ
So which one of these tools do you want to use? That’s why when you go to an attorney; he’s been trained to use a specific tool in a specific way. The second attorney uses the same tool but he uses it for a different reason. Very few attorneys can melt all the reasons together. They don’t think “income tax,” or they don’t think “estate.”
Your business guy when he goes to set up the LLC for the business, he really isn’t thinking “income taxes” or “estate planning.” But if you do it right, you use the tools for all three of the aspects! You get some income tax, you get some estate tax protection, and you get some asset protection out of the tool.
So, when you go to a lawyer and you get a different story, this guy says you need an S-Corp, this guy says you need an LLC – there isn’t much difference. The difference is which has he been trained to use? And how is he thinking? Is he thinking taxes? Is he thinking asset protection? Is he thinking family planning?
It’s like the blind guys that feel the elephant. You know that story right? These three blind guys come in to a room with an elephant. They each feel the elephant, but different parts. One guy’s got the trunk, the other guys got the leg and the last one’s got the tail. The funny thing is, you get three different versions of what this animal is depending on where you feel. Depending on how you’re looking at it, the lawyers give you different stories.
So that’s why you get different stories from the lawyers and I’m sure you’ve had the experience. Most people have, especially if you use the legal profession at all. You just have to know about the tool to know how YOU want to use them. That way YOU can go in and direct the attorney as to how to use them and how to set up the document.
But that’s not good enough. A lot of people have the documents; you can get them on the internet, you can get them at the attorney’s office; I DON’T CARE! They set up the tool, they have their trust, they have their LLC, whatever it is, they put it in the drawer and they never learn how to use it. Learn how to use it!! Or it won’t do you a bit of good!