Structure

What if we have to unwind all of this?

By design, an irrevocable trust cannot simply be “unwound.” If you could revoke it at will, the IRS and courts would ignore the protections. That permanence is what makes the trust effective for estate tax exclusion and asset protection.

That said, the structure isn’t a trap. Corporate entities like LLCs and the C-Corp can be sold, merged, or dissolved through normal corporate processes if business needs change. Within the trust, changes are only possible if all beneficiaries agree and formal amendments are executed according to state law. Even then, those modifications are narrow and carefully documented to keep the trust respected.

The takeaway: the corporate layers can evolve with business needs, but the trust layer is meant to be permanent. That permanence is the price of the protections it provides.

Why use a C-Corp at the top instead of just LLCs?

C-Corps cap the tax rate at 21% and provide a layer that keeps trust-level tax brackets (37%+) from biting into operating profits. They’re also the only entity type that scales cleanly for reinvestment, equity raising, and international recognition.

Can’t we just have one LLC for everything?

No single entity solves all three estate planning needs (asset protection, tax reduction, legacy) - not trusts, corporations or partnerships. Combining entities amplifies benefits and reduces liabilities.

How do we prevent piercing the veil if family members are also managers?

By observing corporate formalities - minutes, bylaws, separate bank accounts, officer elections. The operating agreement makes managers’ duties explicit. The most common violation of formality is combining personal finance with that of the structure - and secondly: haphazardly moving value from one company to another. Avoiding these and the other 9 compliance "don'ts" generally keeps the integrity of the structure sound.

What’s the difference between a multi-member LLC taxed as partnership vs an LP?

An LP leaves general partners fully liable to lawsuits. A multi-member LLC provides limited liability to all members while still giving pass-through treatment.

How often should minutes be updated to keep the structure respected?

Annually at minimum, and anytime a major decision or transaction occurs.

How do officer roles get documented in an LLC or C-Corp?

Through minutes. The board (or managers) appoints officers, which is then logged in the corporate record, shares/interest assigned, and control assumed.

Who has signing authority across entities, and how is that decided?

The operating agreement gives managers exclusive management and authority. They can delegate signing via resolution.

What’s the process for adding or removing an owner?

Membership transfers are strictly controlled. Unauthorized transfers can terminate the interest and even membership altogether.

How do I get paid?

The best tax protocol is often counterintuitive: personally earning as little as possible. Every dollar you take as “earned income” is exposed to high individual tax rates and payroll taxes. That’s why the structure is designed to keep wealth inside companies and trusts, where it enjoys capped rates, protection, and reinvestment advantages.

If you need more than about $80,000 per year for personal living expenses, we typically establish a single-member S-Corporation in your state of domicile. That entity contracts with the larger structure to provide services, allowing you to extract only the minimum cash needed to cover personal bills. The S-Corp framework also lets you pay yourself a reasonable salary as required  while taking the remainder as distributions that avoid self-employment tax.

Any larger assets, investments, or acquisitions should and must be handled inside the structure itself. That way the purchase benefits from corporate protections, favorable taxation, and legacy planning instead of exposing you personally to unnecessary taxes and liabilities.

Does this structure mean I can never take money out for myself?

No. It doesn’t block you from enjoying your wealth, it just changes the how. The design is built so profits aren’t casually drained out of companies into your personal checking account, because that’s where taxes and liability hit the hardest.

Instead, cash is used strategically:

• Reinvestment inside the structure keeps the 21% cap, fuels growth, and avoids second-layer taxes.

• Personal needs are covered through a small S-Corp or officer compensation channels, providing only the income you need to pay bills.

• Larger liquidity can come later through planned events such as redemptions, sales, or trust distributions all of which are structured for tax efficiency and protection.

So you’re not locked out of your money. You’re simply taking it on your terms: deliberately, tax-advantaged, and protected.

If the shares of the C-Corp are in an irrevocable trust, how can the shareholders have control over the structure?

Simply: they don’t — and that’s the point. In a C-Corp, we want ownership and control to be separate (as we do in our LLCs). Shareholders own value (the shares), but Directors control the company. Once the initial Board is elected, Directors have the exclusive authority to appoint, remove, and replace officers, set policy, and govern the corporation. Directors can even vote in new Directors, meaning continuity of control stays inside the Board itself rather than flowing through shareholders.

With a corporation, the trust can hold the shares for estate and asset protection, while the Directors, chosen carefully at formation, retain full control over the business. That separation is what makes the C-Corp the ideal partner to an irrevocable trust: ownership is protected, while control stays in the hands of the people best equipped to run the enterprise.

If the C-Corp is so great, why do we need the irrevocable trusts?

Because while the C-Corp caps tax at 21% and centralizes control, its shares still have value, however small after the buy/sell agreement. If those shares are held personally, that value is exposed to estate tax at death, inheritance tax in certain states, and to creditors or lawsuits during life. In other words, the C-Corp may protect the business, but it doesn’t protect the owners.

By placing the shares of the C-Corp inside an irrevocable, non-grantor trust, two major benefits lock in:

• Estate tax exclusion – the trust owns the shares, not the individual, which removes them from the taxable estate. Heirs don’t face a liquidation event just to pay estate tax.

• Asset protection – because the trust, not the shareholder, is the legal owner, those shares can’t be seized in a lawsuit, divorce, or creditor claim against the individual.

The C-Corp builds wealth. The trust preserves it across generations. Without the trust layer, the value of the C-Corp itself would eventually be stripped by taxes or exposed to risk.

Who should be the trustee of the irrevocable trusts?

The trustee must be independent. It cannot be the C-Corp itself, and ideally it is not a family member either. The reason is simple: if the grantor or beneficiaries can control the trust, courts and the IRS may disregard it, undoing both the estate and asset protection benefits.

Instead, the trustee should be an outside professional or trusted third party with no personal interest in the trust assets or the C-Corp. Their role is to follow the instructions in the trust instrument, safeguard the corpus, and act in the beneficiaries’ best interest. Independence keeps the trust respected legally and ensures that the assets are truly outside the grantors’ estates and out of reach of creditors.