This video presents a tax-saving system, called the "trifecta," designed to help Americans save taxes, build wealth, and leave a legacy. The speaker, Mark J. Kohler, details a three-part system involving a revocable living trust, operational income structures, and wealth-building assets. He emphasizes that this system is adaptable to various financial situations and stages of wealth building.
The Trifecta System: A three-part system for tax savings and wealth building consisting of a revocable living trust as the foundation, operational income streams (business activities), and wealth-building assets (passive income generating assets).
Revocable Living Trust: A crucial foundation for asset protection, privacy, and efficient wealth transfer, avoiding probate. It should ideally own the home, financial assets, life insurance, and business entities.
LLCs (Limited Liability Companies): Different types of LLCs serve distinct purposes: holding companies for asset protection, operational companies for conducting business activities, and LLCs taxed as S corporations for significant tax advantages.
S Corporations: Converting an LLC to an S corporation can significantly reduce self-employment taxes, particularly for those with substantial net income. This involves strategically structuring salary and pass-through income.
Strategic Wealth Building: The trifecta system facilitates maximizing tax deductions and minimizing tax liabilities. The speaker suggests using saved taxes to invest in additional assets and further grow wealth.
