Detecting language using up to the first 30 seconds. Use `--language` to specify the language
Detected language: English
[00:00.000 --> 00:01.640]  Welcome to the show.
[00:01.640 --> 00:04.640]  On June 24, I had the privilege of appearing
[00:04.640 --> 00:07.040]  as a guest on the John Dowling Show
[00:07.040 --> 00:11.880]  to discuss the legal principles of common law trusts
[00:11.880 --> 00:14.800]  and how common law trusts operate.
[00:14.800 --> 00:18.320]  John asked some very poignant questions
[00:18.320 --> 00:21.040]  that elicited revealing responses.
[00:21.040 --> 00:23.720]  Whether you've been interested in a common law trust,
[00:23.720 --> 00:26.200]  such as a business trust, or you've merely
[00:26.200 --> 00:29.980]  heard the name common law trust and are curious about them,
[00:29.980 --> 00:33.300]  you'll find this interview exciting and enlightening.
[00:33.300 --> 00:36.420]  There aren't a lot of people who could speak with credibility
[00:36.420 --> 00:37.860]  about common law trusts.
[00:37.860 --> 00:39.980]  So if the subject interests you, this
[00:39.980 --> 00:42.460]  is the show you want to watch.
[00:42.460 --> 00:44.660]  If you have questions, at the end,
[00:44.660 --> 00:45.980]  I mention how you can reach me.
[00:45.980 --> 00:49.220]  So without further ado, let's get into it.
[00:49.220 --> 00:51.520]  Well, hello and welcome, everyone, to the podcast.
[00:51.520 --> 00:54.420]  We have with us special guest Mr. Dave Champion, who
[00:54.420 --> 00:56.500]  is going to be navigating us through the minefield
[00:56.500 --> 00:58.860]  of common law trusts and all the intricacies
[00:58.860 --> 01:00.860]  and bringing it down to a digestible level
[01:00.860 --> 01:03.660]  so that all of you can feel comfortable about the process
[01:03.660 --> 01:05.540]  in your lives going forward.
[01:05.540 --> 01:06.980]  Now, before we get started, please
[01:06.980 --> 01:09.140]  do like and subscribe to the channel
[01:09.140 --> 01:10.420]  as it does help it grow.
[01:10.420 --> 01:12.580]  Even if you're watching or showing enough subscribe,
[01:12.580 --> 01:15.300]  you'll be able to get daily notifications as these videos
[01:15.300 --> 01:17.700]  come in so that you'll be up to date with the most
[01:17.700 --> 01:19.420]  timely information.
[01:19.420 --> 01:22.200]  Now, let me read from Mr. Champion's background
[01:22.200 --> 01:23.140]  verbatim.
[01:23.140 --> 01:25.420]  Dave Champion is a former army ranger
[01:25.420 --> 01:28.380]  with a law enforcement background.
[01:28.380 --> 01:29.820]  Specifically in the private sector,
[01:29.820 --> 01:31.540]  Dave is a businessman turned journalist
[01:31.540 --> 01:34.980]  having hosted his own radio and TV shows ranging from 2000
[01:34.980 --> 01:36.660]  to 2018.
[01:36.660 --> 01:38.780]  In addition to being a physiologist
[01:38.780 --> 01:41.620]  with a doctoral degree in political philosophy,
[01:41.620 --> 01:45.100]  Mr. Champion has an extensive background in legal studies.
[01:45.100 --> 01:48.940]  He served as a legal consultant on state and federal regulatory
[01:48.940 --> 01:52.900]  matters as well as a constitutional law advisor.
[01:52.900 --> 01:54.660]  Dave is also a public speaker having
[01:54.660 --> 01:56.820]  lectured on numerous subjects, including
[01:56.820 --> 02:00.540]  the US Constitution, the Second and 14th Amendment,
[02:00.540 --> 02:02.820]  as well as the 16th Amendment, the history
[02:02.820 --> 02:06.020]  and proper limited application of the income tax,
[02:06.020 --> 02:08.860]  government relations, and human physiology.
[02:08.860 --> 02:11.380]  Dave is a former martial arts instructor
[02:11.380 --> 02:15.700]  with a renowned firearms tactics and use of force instructor.
[02:15.700 --> 02:18.380]  Dave's first book is groundbreaking and widely
[02:18.380 --> 02:21.060]  acclaimed, quote, income tax shattering the mess,
[02:21.060 --> 02:23.340]  which he was gracious enough to give me a copy
[02:23.340 --> 02:24.980]  and I'm still reading through it.
[02:25.020 --> 02:28.140]  Dave's second book is based on years of research
[02:28.140 --> 02:32.260]  called Body Science, the new 21st century understanding
[02:32.260 --> 02:35.340]  of the human body and its working components.
[02:35.340 --> 02:38.100]  In the mid-1990s, Mr. Champion interned
[02:38.100 --> 02:40.940]  with one of the nation's most knowledgeable common law trust
[02:40.940 --> 02:41.900]  advisors.
[02:41.900 --> 02:44.940]  Upon her retirement, Dave began providing common law trust
[02:44.940 --> 02:47.620]  and serving as a trustee for those seeking the protection
[02:47.620 --> 02:49.380]  of a common law trust.
[02:49.380 --> 02:51.780]  Dave spent 15 years educating Americans
[02:51.780 --> 02:54.020]  about the benefits of common law trust,
[02:54.020 --> 02:57.220]  providing indentures, and serving as trustee.
[02:57.220 --> 02:58.700]  With all that said, Mr. Champion,
[02:58.700 --> 02:59.540]  thank you for your time.
[02:59.540 --> 03:00.980]  Welcome to the podcast.
[03:00.980 --> 03:01.580]  Thank you, John.
[03:01.580 --> 03:03.220]  I appreciate being here.
[03:03.220 --> 03:04.980]  It's an honor, believe me.
[03:04.980 --> 03:08.580]  So with so many people looking for how
[03:08.580 --> 03:11.580]  to protect their assets and minimize their liabilities
[03:11.580 --> 03:13.580]  and exposure, there is a high interest
[03:13.580 --> 03:16.540]  in learning more about these specific trusts.
[03:16.540 --> 03:20.180]  In your bio, you did mention you are one of the top experts
[03:20.180 --> 03:21.340]  on respect to subjects.
[03:21.340 --> 03:24.180]  So let's start simple, Dave, and build.
[03:24.180 --> 03:25.820]  What is a common law trust?
[03:31.100 --> 03:33.420]  In order to describe what a common law trust is,
[03:33.420 --> 03:36.700]  we have to juxtapose it against what a statutory trust is.
[03:36.700 --> 03:39.660]  So whether we're talking about a statutory trust or a common law
[03:39.660 --> 03:42.940]  trust, they have quite a number of features
[03:42.940 --> 03:44.620]  that are absolutely parallel.
[03:44.620 --> 03:47.580]  However, statutory trusts are created
[03:47.580 --> 03:51.060]  by laws that our elected representatives have
[03:51.060 --> 03:52.460]  passed in the legislature.
[03:52.460 --> 03:55.580]  And they are creatures of the legislature.
[03:55.580 --> 03:58.860]  So for instance, if you had a statutory trust,
[03:58.860 --> 04:03.940]  and tomorrow the legislature repealed all of those laws,
[04:03.940 --> 04:05.460]  you would no longer have a trust.
[04:05.460 --> 04:07.300]  That is not the case with a common law trust.
[04:07.300 --> 04:11.420]  Common law trusts are based on common law factors
[04:11.420 --> 04:14.980]  that have existed in our tradition, our history,
[04:14.980 --> 04:20.340]  and the judicial landscape in the United States
[04:20.340 --> 04:23.740]  for the last more than 230 years.
[04:23.740 --> 04:26.340]  The common law traditions that are
[04:26.340 --> 04:28.100]  used to create a common law trust
[04:28.100 --> 04:29.820]  existed back in the days of the colonies
[04:29.820 --> 04:30.820]  that have moved forward.
[04:34.860 --> 04:43.260]  If I were to clarify the core of a common law trust, what it is
[04:43.260 --> 04:47.180]  is it is a legal entity established
[04:47.180 --> 04:51.940]  by each particular party in the trust
[04:51.940 --> 04:55.860]  contracting into that role.
[04:55.860 --> 04:58.020]  Now, it's important to understand
[04:58.020 --> 04:59.820]  that one of our unalienable rights
[04:59.820 --> 05:00.980]  is the right of contract.
[05:00.980 --> 05:07.180]  And the US Supreme Court has said 80, 90 years ago
[05:07.180 --> 05:10.700]  that the right of contract is an unalienable right that cannot
[05:10.700 --> 05:12.060]  be altered by the government.
[05:12.060 --> 05:15.820]  The only restriction on that is the right of contract
[05:15.820 --> 05:19.260]  does not extend to criminal activities.
[05:19.260 --> 05:24.940]  So in a common law trust, we don't ask the legislators
[05:24.940 --> 05:28.700]  or the legislature for permission to create an entity.
[05:28.700 --> 05:33.100]  And it is not beholden to the state or federal government.
[05:33.100 --> 05:37.540]  It is created under common law precepts.
[05:37.540 --> 05:41.380]  And it exists simply because Americans have the right
[05:41.380 --> 05:46.540]  to establish those on their own without involving the government.
[05:46.540 --> 05:50.380]  Is that succinct and clear?
[05:50.380 --> 05:51.660]  Makes sense to me.
[05:51.660 --> 05:53.900]  So you mentioned a minute ago, rightly,
[05:53.900 --> 05:56.140]  that there are some similarities between a common law
[05:56.140 --> 05:57.900]  trust and a statutory trust.
[05:57.900 --> 05:59.540]  So diving into that a little bit,
[05:59.540 --> 06:03.260]  what are the major differences in your estimations?
[06:03.260 --> 06:06.020]  The major differences or the major similarities?
[06:06.020 --> 06:08.060]  The differences.
[06:08.100 --> 06:14.260]  The differences are that all statutory creatures are,
[06:14.260 --> 06:17.500]  I won't say all, most statutory creatures,
[06:17.500 --> 06:22.100]  are governed by what's called public policy law.
[06:22.100 --> 06:25.620]  In other words, if the state legislature,
[06:25.620 --> 06:29.900]  they are responsible for enabling this to exist,
[06:29.900 --> 06:35.340]  then they have a legal, I guess we can say colloquially,
[06:35.340 --> 06:36.820]  that they are the parents.
[06:36.820 --> 06:42.620]  And so they have the ability then to discipline and limit
[06:42.620 --> 06:45.420]  the behavior of their children, which would be a corporation
[06:45.420 --> 06:49.860]  or a trust, so forth, if it's created under their authority.
[06:49.860 --> 06:54.140]  So common law trusts don't owe anything.
[06:54.140 --> 06:55.820]  I think that's a really important concept.
[06:55.820 --> 07:00.020]  They owe zero to the government for their existence.
[07:00.020 --> 07:04.820]  Therefore, they are not regulatable by the government
[07:04.820 --> 07:09.660]  unless or until they choose to engage in some sort of conduct,
[07:09.660 --> 07:12.260]  the conduct of which may be regulatable by the government.
[07:12.260 --> 07:14.100]  So for instance, let's say a common law trust
[07:14.100 --> 07:17.180]  decided to get into the alcohol distilling business.
[07:17.180 --> 07:21.300]  Then the alcohol distilling aspect would be regulatable.
[07:21.300 --> 07:23.060]  But the trust itself is not.
[07:23.060 --> 07:27.740]  So people who decide to create a common law trust,
[07:27.740 --> 07:29.980]  they literally, I mean, an ice service trustee
[07:29.980 --> 07:33.260]  for hundreds and hundreds and hundreds and hundreds of trusts
[07:33.260 --> 07:36.780]  over a 15-year period.
[07:36.780 --> 07:42.140]  The interaction between the trusts and the government
[07:42.140 --> 07:46.140]  over that period of time was exactly zero.
[07:46.140 --> 07:49.180]  And that, I think, is one of the major attributes
[07:49.180 --> 07:50.340]  of a common law trust.
[07:50.340 --> 07:54.980]  You can really, I think most of your audience would agree,
[07:54.980 --> 08:00.540]  we sort of live in this construct created by our society
[08:00.540 --> 08:03.580]  as a construct created in great part by government.
[08:03.580 --> 08:05.740]  So what happens with a common law trust
[08:05.740 --> 08:08.380]  is here's this societal construct that, to a great extent,
[08:08.380 --> 08:10.140]  is created by government and its laws.
[08:10.140 --> 08:11.860]  The common law trust goes, nope, not me.
[08:11.860 --> 08:13.100]  I'm going to be over here.
[08:13.100 --> 08:16.580]  I'm not going to be in this realm anymore.
[08:16.580 --> 08:21.580]  And a lot of people who pursue things like common law trusts
[08:21.580 --> 08:23.260]  really have a disdain for government.
[08:23.260 --> 08:25.860]  And while I have a healthy distrust of government,
[08:25.860 --> 08:28.460]  I do not have a disdain for government.
[08:28.460 --> 08:30.980]  Nevertheless, because I have a healthy distrust, which
[08:30.980 --> 08:36.020]  they created, by the way, that's not where I started in life.
[08:36.020 --> 08:40.180]  But because I have a healthy distrust,
[08:40.180 --> 08:44.940]  anything I can do to exist outside that construct we just
[08:44.940 --> 08:47.900]  talked about, I'm going to do it.
[08:47.900 --> 08:49.980]  And that's one of the beauties of common law trust
[08:49.980 --> 08:52.340]  is that if, for instance, a person creates a common law
[08:52.340 --> 08:56.140]  trust to conduct a business, most businesses
[08:56.140 --> 08:59.340]  are highly constrained by public policy law, common law
[08:59.340 --> 09:02.180]  trust or not.
[09:02.180 --> 09:03.180]  That's great.
[09:03.180 --> 09:03.700]  Thank you, David.
[09:03.700 --> 09:05.300]  That was really well said.
[09:05.300 --> 09:08.020]  So this next question may seem obvious,
[09:08.020 --> 09:10.740]  but I have a feeling there's more nuances to it
[09:10.740 --> 09:12.380]  than maybe people realize.
[09:12.380 --> 09:16.340]  And that is, is a common law trust for everyone?
[09:16.340 --> 09:17.220]  No.
[09:17.220 --> 09:20.140]  Common law trust is a tool.
[09:20.140 --> 09:22.260]  If common law trusts were for everyone,
[09:22.260 --> 09:25.020]  I think shows like you and I are doing right now
[09:25.020 --> 09:26.980]  would be much more prevalent, because everybody
[09:26.980 --> 09:28.700]  would be rushing to them.
[09:28.700 --> 09:29.500]  They're not.
[09:32.780 --> 09:36.540]  For instance, I gave the distilling alcohol example.
[09:36.540 --> 09:40.220]  For somebody to create a common law trust to distill alcohol
[09:40.220 --> 09:42.380]  would not be productive.
[09:42.380 --> 09:45.740]  There's an old adage, if everything on the lake
[09:45.740 --> 09:48.860]  is a duck, you might want to look like the duck.
[09:48.860 --> 09:51.540]  And that would be true if something is highly regulated,
[09:51.540 --> 09:54.020]  like distilling alcohol or importing alcohol and so forth.
[09:54.020 --> 09:56.860]  So there'd be absolutely zero benefit to a common law trust.
[09:59.460 --> 10:04.340]  It also would not be a tool that, oh, what
[10:04.340 --> 10:07.460]  would be the right term?
[10:07.460 --> 10:09.900]  Normies.
[10:09.900 --> 10:12.180]  People who buy into the establishment hook, line,
[10:12.180 --> 10:14.620]  and sinker and think that's the way life should always be
[10:14.620 --> 10:17.460]  lived is according to the establishment.
[10:17.460 --> 10:18.980]  Common law trust would not be for them,
[10:18.980 --> 10:21.820]  because it would put them outside their comfort zone.
[10:21.820 --> 10:24.300]  But for people who believe in personal liberty,
[10:24.300 --> 10:28.860]  for people who do not want to live in that system
[10:28.860 --> 10:32.260]  that we described, and perhaps they own a business,
[10:32.260 --> 10:34.620]  or they just want to protect property, what have you,
[10:34.620 --> 10:37.580]  but they don't want to do it with the permission
[10:37.580 --> 10:38.540]  of government.
[10:38.540 --> 10:42.380]  They want to do it the way our ancestors did it,
[10:42.380 --> 10:44.700]  the way our great, great grandfathers did it,
[10:44.700 --> 10:46.860]  the way the founding fathers did it.
[10:46.860 --> 10:48.500]  They want to do it that way.
[10:48.500 --> 10:51.140]  In that case, the common law trust is very attractive.
[10:51.140 --> 10:55.780]  And people might consider pursuing it.
[10:55.780 --> 10:56.340]  Makes sense.
[10:56.340 --> 10:57.660]  Thank you.
[10:57.660 --> 10:59.100]  So with that in mind, for those who
[10:59.100 --> 11:02.420]  it is appropriate or applicable, what assets would you
[11:02.420 --> 11:04.380]  specifically put into a common law trust?
[11:07.060 --> 11:08.980]  You can put any assets.
[11:08.980 --> 11:10.860]  First of all, we should start when we see you.
[11:10.860 --> 11:12.740]  We're talking about somebody who in trust laws
[11:12.740 --> 11:14.780]  called the grantor.
[11:14.780 --> 11:20.340]  And the grantor, I'm going to give the everyman version.
[11:20.340 --> 11:21.900]  It's not the legal definition.
[11:21.900 --> 11:23.940]  The grantor is the person who says, hey,
[11:23.940 --> 11:25.340]  I've got this property over here.
[11:25.340 --> 11:27.740]  And I think it would be really nifty to put this property
[11:27.740 --> 11:30.300]  over here in a trust.
[11:30.300 --> 11:32.580]  That's the grantor.
[11:32.580 --> 11:36.780]  What kind of property can the grantor put in a trust?
[11:36.780 --> 11:38.340]  Anything.
[11:38.340 --> 11:40.020]  They can put real property in a trust.
[11:40.020 --> 11:41.780]  They can put personal property in a trust.
[11:41.780 --> 11:43.860]  They can put intellectual property in a trust.
[11:43.860 --> 11:47.260]  There is literally no limitation as
[11:47.260 --> 11:48.580]  to what can be held in trust.
[11:50.620 --> 11:54.660]  If it has the word property after,
[11:54.660 --> 11:57.660]  tangible property, personal property, real property,
[11:57.660 --> 12:00.380]  intellectual property, if it's got the second word as property,
[12:00.380 --> 12:02.260]  you can put it in a trust.
[12:02.260 --> 12:05.140]  That's great, because that's a very wide net, as you know.
[12:05.140 --> 12:08.260]  So many groups promote, David, having common law trust,
[12:08.260 --> 12:10.900]  also, as you know, called an irrevocable private express
[12:10.900 --> 12:11.820]  trust.
[12:11.820 --> 12:14.460]  Many say that you need to get an EIN for the trust.
[12:14.460 --> 12:19.500]  This trust EIN allows them to open up a trust bank account.
[12:19.500 --> 12:23.420]  But doesn't getting an EIN make the trust known to the IRS?
[12:23.420 --> 12:27.820]  The trust would no longer be private, right?
[12:27.820 --> 12:30.740]  The concept of private is malleable.
[12:30.740 --> 12:32.460]  What is private to one person does not
[12:32.460 --> 12:35.820]  have the same meaning as private to another person.
[12:35.820 --> 12:41.660]  Obviously, if one has a trust that's merely holding property,
[12:41.660 --> 12:43.100]  it doesn't need a bank account.
[12:43.100 --> 12:46.380]  Let's say somebody's got an antique car collection.
[12:46.380 --> 12:48.220]  So they create a common law trust,
[12:48.220 --> 12:51.460]  and they put 35 antique cars in the common law trust.
[12:51.460 --> 12:53.100]  There's not even a discussion about an EIN,
[12:53.100 --> 12:53.860]  because it's irrelevant.
[12:53.860 --> 12:55.740]  They're not going to go out in the business world,
[12:55.740 --> 12:59.500]  and they're not going to create a bank account, presumably.
[12:59.500 --> 13:02.780]  Now, the other side of the coin is, what if they
[13:02.780 --> 13:04.020]  need to open a bank account?
[13:04.020 --> 13:07.620]  Well, there are ways to open bank accounts without EINs,
[13:07.620 --> 13:09.220]  specifically for trust.
[13:09.220 --> 13:12.500]  As an individual, your odds are pretty damn close to zero
[13:12.500 --> 13:14.100]  of accomplishing that.
[13:14.100 --> 13:16.420]  But there are ways to address that as well.
[13:16.420 --> 13:18.100]  So let's talk about the EIN for a second,
[13:18.100 --> 13:20.540]  because obviously, it's a lot easier to walk into a bank
[13:20.540 --> 13:25.140]  and say, here's my trust, and here's my EIN.
[13:25.140 --> 13:30.300]  Having an EIN does bring the trust
[13:30.300 --> 13:33.580]  to the government's attention, but it does not,
[13:33.580 --> 13:35.820]  this is critical, does not mean the government's
[13:35.820 --> 13:37.780]  going to crawl up the trust tax.
[13:37.780 --> 13:39.020]  It doesn't.
[13:39.020 --> 13:41.380]  Here's why.
[13:41.380 --> 13:46.700]  If a person is receiving US source income belonging
[13:46.700 --> 13:48.100]  to a foreign person, which is one
[13:48.100 --> 13:51.340]  of the three classes upon whom Congress has opposed the tax,
[13:51.340 --> 13:55.580]  then that trust would be, common law or otherwise,
[13:55.580 --> 13:58.500]  it would be required to withhold the tax before it pays
[13:58.500 --> 14:01.460]  that US source income, before it crosses the border,
[14:01.460 --> 14:03.700]  leaves the country, and goes to its foreign owner.
[14:03.700 --> 14:06.260]  That doesn't matter whether it's Dave Champion,
[14:06.260 --> 14:08.620]  whether it's John, whether it's a common law
[14:08.620 --> 14:10.660]  trust or statutory trust.
[14:10.660 --> 14:11.540]  The law is clear.
[14:11.540 --> 14:14.940]  If you're moving US source income
[14:14.940 --> 14:16.820]  that belongs to a foreign person offshore
[14:16.820 --> 14:18.900]  to the foreign person, you need to withhold it.
[14:18.900 --> 14:20.500]  You need to file the appropriate tax return
[14:20.500 --> 14:21.380]  and pay it over to the government.
[14:21.380 --> 14:22.620]  So that doesn't matter.
[14:22.620 --> 14:25.500]  So somebody might, a trust might get an EIN,
[14:25.500 --> 14:29.820]  because let's say it does that one time in 30 years.
[14:29.820 --> 14:34.260]  So it needs an EIN for that purpose, yes?
[14:34.260 --> 14:38.580]  Does it need an EIN for all the other days
[14:38.580 --> 14:41.380]  of that 10-year period except that one day?
[14:41.380 --> 14:43.420]  No, it doesn't.
[14:43.460 --> 14:50.460]  So there are methods that I advocate.
[14:50.740 --> 14:52.780]  If a person, if the bank says,
[14:52.780 --> 14:56.540]  which is a different issue than needing an EIN, okay?
[14:56.540 --> 14:59.060]  Legally speaking, because if a trust isn't engaged
[14:59.060 --> 15:00.620]  in some of the activity we just mentioned,
[15:00.620 --> 15:01.900]  it doesn't need an EIN.
[15:01.900 --> 15:03.140]  But then you go to the bank and the bank says,
[15:03.140 --> 15:05.940]  we're not opening an account without an EIN.
[15:05.940 --> 15:08.420]  So what they're doing is they're basically extorting you.
[15:08.460 --> 15:09.940]  Okay.
[15:09.940 --> 15:14.180]  They're saying, unless you acquire something
[15:14.180 --> 15:17.020]  that you are not legally required to have
[15:17.020 --> 15:20.780]  and you furnish it to us, unless you meet our demands,
[15:20.780 --> 15:24.100]  like a kidnapper, unless you meet our demands,
[15:24.100 --> 15:25.940]  then we're not gonna open this account.
[15:25.940 --> 15:26.780]  Okay.
[15:26.780 --> 15:28.340]  So obviously that's not legal,
[15:29.580 --> 15:34.340]  but banks, I think it's no shock to your audience
[15:34.820 --> 15:39.020]  that banks have an outsized role in society.
[15:39.020 --> 15:43.580]  So if we think we're going to say to a bank,
[15:43.580 --> 15:45.500]  here's the law, do what I say,
[15:45.500 --> 15:47.140]  and the bank's gonna go, oh, okay,
[15:47.140 --> 15:48.180]  that's not gonna happen.
[15:48.180 --> 15:50.820]  But there are ways to protect yourself
[15:50.820 --> 15:54.860]  or protect your trust if the bank acts like a kidnapper
[15:54.860 --> 15:56.100]  and says you will meet our demands
[15:56.100 --> 15:58.660]  or this isn't gonna happen.
[15:58.660 --> 16:01.180]  So there are options is my point.
[16:01.180 --> 16:06.180]  And it has to be done correctly.
[16:06.620 --> 16:10.060]  Every jot and tittle of the law has to be properly addressed
[16:10.060 --> 16:13.020]  because banks and the government love it
[16:13.020 --> 16:16.700]  when people don't do things exactly right
[16:16.700 --> 16:19.180]  because it leaves an opening for them.
[16:19.180 --> 16:20.020]  Right.
[16:21.060 --> 16:24.020]  So with that in mind, David, again, thank you.
[16:24.020 --> 16:25.540]  So if I understand you correctly,
[16:25.540 --> 16:29.940]  there is a way to have a relative
[16:29.940 --> 16:31.420]  private common law trust
[16:31.420 --> 16:34.380]  where there's ways around the EIN with the bank,
[16:34.380 --> 16:36.780]  basically is what you're saying, is that right?
[16:36.780 --> 16:38.860]  I don't know if I'd say there's a way around it,
[16:38.860 --> 16:41.020]  but there is a way of protecting yourself
[16:41.020 --> 16:43.380]  or a trust depending, it can be either one,
[16:43.380 --> 16:45.860]  when the bank attempts to extort you
[16:45.860 --> 16:46.780]  into giving them a number
[16:46.780 --> 16:48.100]  that you're not legally required to have.
[16:48.100 --> 16:50.420]  You can correct that on the record.
[16:50.420 --> 16:54.020]  And by doing that, you can protect yourself or your trust.
[16:54.020 --> 16:55.180]  Fair enough, thank you.
[16:56.340 --> 16:58.220]  How does a common law trust work
[16:58.260 --> 17:00.540]  and who is typically involved in the creation
[17:00.540 --> 17:02.180]  and management of said trust?
[17:04.660 --> 17:09.660]  Well, there are a number of trust officers.
[17:09.900 --> 17:11.500]  The most notable is the trustee.
[17:12.780 --> 17:14.660]  The way it works in most trusts
[17:14.660 --> 17:17.580]  and specifically in common law trusts
[17:17.580 --> 17:22.580]  is that the property granted into the corpus of the trust
[17:23.100 --> 17:27.580]  is held by the trustee in his official capacity
[17:27.580 --> 17:28.580]  as a trustee.
[17:28.580 --> 17:31.380]  So I'm gonna use myself as an example for this illustration.
[17:31.380 --> 17:34.500]  If I'm a trustee, the property is held
[17:34.500 --> 17:39.500]  in the name of Dave Champion, trustee for XYZ Trust, okay?
[17:42.180 --> 17:44.260]  Does that give Dave Champion any personal rights
[17:44.260 --> 17:45.100]  to the property?
[17:45.100 --> 17:45.940]  It absolutely does not.
[17:45.940 --> 17:47.740]  There's a fiduciary duty
[17:48.900 --> 17:52.300]  that is a part of the trustee's duties.
[17:52.300 --> 17:53.780]  And if the trustee violates those,
[17:53.780 --> 17:55.060]  he can be taken to court.
[17:55.060 --> 17:58.420]  Now, who would take the trustee to court?
[17:58.420 --> 18:02.300]  Well, the grantor could take the trustee to court
[18:02.300 --> 18:06.220]  if the trustee engaged in conduct that was unethical.
[18:06.220 --> 18:09.740]  Also, there's a officer optional position
[18:09.740 --> 18:12.300]  called the protector.
[18:12.300 --> 18:17.220]  And the only authority that the protector has in a trust
[18:17.220 --> 18:20.100]  is to go after the trustee in court
[18:20.100 --> 18:22.820]  if the trustee begins to act in a way
[18:22.820 --> 18:25.700]  that's not commensurate
[18:25.700 --> 18:27.740]  with his fiduciary duties and trust law.
[18:28.820 --> 18:30.780]  Then, so we've got the grantor,
[18:30.780 --> 18:32.780]  we've got the trustee, we've got the protector.
[18:32.780 --> 18:35.660]  Then we have something called unit certificate holders.
[18:35.660 --> 18:37.780]  I think the easiest way for unit certificate holders
[18:37.780 --> 18:40.740]  to understand, I'm sorry, for your audience
[18:40.740 --> 18:42.340]  to understand unit certificate holders
[18:42.340 --> 18:47.260]  is they are somewhat analogous to the beneficiary
[18:47.260 --> 18:48.620]  in an insurance policy.
[18:49.580 --> 18:54.580]  The trustee, his obligation, first of all,
[18:54.580 --> 18:56.860]  is to the laws of the trust
[18:56.860 --> 19:00.500]  and to the dictates of what the indenture
[19:00.500 --> 19:02.500]  demands of the trustee, okay?
[19:02.500 --> 19:05.780]  His second responsibility is the ethics
[19:05.780 --> 19:07.500]  that we talked about a moment ago.
[19:07.500 --> 19:12.500]  But all of that is for the purpose of that property
[19:13.460 --> 19:17.740]  is being held in trust for the unit certificate holders,
[19:18.020 --> 19:19.700]  for their benefit.
[19:19.700 --> 19:24.460]  So let's say a trust, the grantor specified in the trust
[19:24.460 --> 19:28.780]  that 28 years after the date the trust was created,
[19:28.780 --> 19:30.220]  the trust was gonna be liquidated
[19:30.220 --> 19:33.500]  and all the resources held in the corpus
[19:33.500 --> 19:35.980]  were going to go to the unit certificate holders.
[19:37.300 --> 19:38.700]  Obviously, you can see the parallel
[19:38.700 --> 19:41.460]  to beneficiaries of an insurance policy.
[19:43.060 --> 19:44.500]  The unit certificate holders
[19:44.540 --> 19:48.420]  are for whom the trust benefits exist,
[19:49.580 --> 19:51.860]  the benefits inure to them.
[19:51.860 --> 19:53.260]  But here's a critical component.
[19:53.260 --> 19:54.380]  The unit certificate holders
[19:54.380 --> 19:57.100]  can have absolutely nothing to do with the trust.
[19:57.100 --> 19:59.460]  So for instance, some people they will want to,
[19:59.460 --> 20:00.820]  a gentleman might come along and say,
[20:00.820 --> 20:03.020]  he wants to create a business trust.
[20:03.020 --> 20:05.220]  And he wants his two sons
[20:05.220 --> 20:07.340]  to be the unit certificate holders.
[20:07.340 --> 20:10.700]  But his two sons are in the business.
[20:10.700 --> 20:12.380]  He wants to create a business trust,
[20:12.380 --> 20:14.900]  run the business from within the trust,
[20:14.900 --> 20:18.420]  but his two sons are in the business.
[20:18.420 --> 20:20.340]  Sorry, then his sons have to make a choice.
[20:20.340 --> 20:22.380]  Well, he has to make a choice.
[20:22.380 --> 20:23.980]  His sons can be unit certificate holders
[20:23.980 --> 20:24.980]  or they can be in the business.
[20:24.980 --> 20:26.460]  They can't be both
[20:26.460 --> 20:28.860]  because if they were operating the business,
[20:30.300 --> 20:34.020]  they would not have clean hands, a legal doctrine.
[20:34.020 --> 20:38.820]  And they could possibly influence the actions of the trust.
[20:38.820 --> 20:39.980]  And in doing so,
[20:39.980 --> 20:42.380]  they would be able to influence their own interest
[20:42.380 --> 20:43.420]  as unit certificate holders.
[20:43.420 --> 20:45.860]  And that is impermissible, okay.
[20:45.860 --> 20:48.780]  And lastly, we have something called managing agents.
[20:48.780 --> 20:51.300]  Managing agents are exactly sort of
[20:51.300 --> 20:53.460]  what the name would imply.
[20:53.460 --> 20:56.380]  Not everything that goes on in a trust day to day
[20:56.380 --> 20:57.620]  needs the attention of the trustee.
[20:57.620 --> 20:59.660]  In fact, very little ever requires
[20:59.660 --> 21:01.060]  the attention of the trustee.
[21:02.300 --> 21:05.260]  And if it's merely holding property,
[21:05.260 --> 21:07.060]  managing agents sometimes are not necessary.
[21:07.060 --> 21:09.340]  Managing agents are typically crucial
[21:09.340 --> 21:12.660]  when a business is being operated from within the trust.
[21:12.660 --> 21:17.180]  And the role of a managing agent is to operate
[21:17.180 --> 21:22.180]  either what we might call a CEO of a corporation
[21:23.100 --> 21:24.460]  or a mid-level manager.
[21:24.460 --> 21:27.860]  So for instance, in trust for which I have sat as trustee,
[21:27.860 --> 21:30.500]  sometimes still we're just gonna throw out an example.
[21:30.500 --> 21:32.260]  There were three managing agents
[21:32.260 --> 21:35.060]  and say one of the managing agents,
[21:35.060 --> 21:37.740]  he was in charge of the whole shebang for the business.
[21:37.740 --> 21:41.020]  The other two managing agents were his subordinates
[21:41.020 --> 21:43.780]  and their managing agent agreement was remember,
[21:43.780 --> 21:47.900]  they all have to contract in this entire corpus
[21:47.900 --> 21:51.180]  is comprised of people who contract into the structure.
[21:51.180 --> 21:54.420]  Their contracts literally create the structure.
[21:54.420 --> 21:57.580]  So their contracts would limit their authority
[21:57.580 --> 22:00.780]  as managing agents where the primary managing agent
[22:00.780 --> 22:03.020]  would have full and complete control over the business.
[22:03.020 --> 22:04.340]  Did I express that clearly?
[22:05.260 --> 22:06.100]  You did, you did.
[22:06.100 --> 22:08.020]  I was just processing and making some notes.
[22:08.020 --> 22:08.860]  Yeah, thank you.
[22:09.780 --> 22:11.860]  Dave, let's back up a second before I go forward
[22:11.860 --> 22:14.340]  because I think this is an important point for,
[22:14.340 --> 22:16.220]  I think for us and for the audience as a whole,
[22:16.220 --> 22:18.420]  it's a whole commensurate thing, obviously.
[22:19.300 --> 22:21.700]  So you're talking about with the Common Law Trust,
[22:21.700 --> 22:25.260]  protecting you like if let's say you're a trustee
[22:25.260 --> 22:29.460]  or a fiduciary owner is not above board
[22:29.460 --> 22:32.140]  or they try to pilfer from the trust,
[22:32.140 --> 22:33.980]  any number of scenarios, right?
[22:34.020 --> 22:36.140]  And you would have to take them to court.
[22:37.140 --> 22:38.580]  You're taking them currently
[22:38.580 --> 22:40.460]  to a statutory maritime court.
[22:40.460 --> 22:43.380]  Would this trust in and of itself
[22:43.380 --> 22:44.900]  be outside of the court's jurisdiction
[22:44.900 --> 22:46.420]  because they really can't,
[22:46.420 --> 22:48.820]  it's they can't capitalize on it, is that right?
[22:51.500 --> 22:56.500]  Well, I'm gonna have to take a step back myself
[22:57.340 --> 23:02.340]  and say that your average neighborhood court of equity
[23:02.460 --> 23:03.780]  is not an admiralty court.
[23:05.500 --> 23:07.620]  It is exactly what it says, it's a court of equity.
[23:07.620 --> 23:11.260]  So you see it a lot of things where it talks about
[23:11.260 --> 23:12.580]  at law or equity.
[23:12.580 --> 23:15.340]  We've all heard that expression as we've studied law.
[23:15.340 --> 23:18.300]  At law refers to the common law, okay?
[23:18.300 --> 23:21.580]  And so courts can function at law or equity
[23:21.580 --> 23:24.820]  and 99.999999% of courts today
[23:24.820 --> 23:27.620]  function in equity jurisdiction.
[23:27.620 --> 23:31.100]  I don't think Americans here in 2024,
[23:31.100 --> 23:34.540]  if you explain to them how law,
[23:34.540 --> 23:37.820]  which as a court views jurisdictionally as common law,
[23:39.500 --> 23:42.500]  the common law is harsh
[23:42.500 --> 23:45.100]  and the common law is unyielding
[23:45.100 --> 23:46.980]  and there are no compromises
[23:46.980 --> 23:48.620]  and something that somebody would say
[23:48.620 --> 23:50.220]  is manifestly unfair
[23:50.220 --> 23:52.220]  and it's gonna screw up the rest of their life.
[23:52.220 --> 23:54.300]  In common law, that's it, you're done.
[23:54.300 --> 23:57.220]  There's no question much, equity has more flexibility.
[23:57.220 --> 24:00.380]  So I think Americans today are more amenable
[24:00.380 --> 24:02.940]  to equity jurisdiction of the courts.
[24:02.940 --> 24:05.220]  Okay, so with that handled,
[24:10.060 --> 24:13.180]  the court can hear any a court,
[24:15.500 --> 24:16.660]  I'm gonna say it this way,
[24:16.660 --> 24:18.620]  your ordinary neighborhood court, okay?
[24:18.620 --> 24:20.940]  I don't wanna get into things like
[24:20.940 --> 24:22.940]  various different kinds of federal courts
[24:22.940 --> 24:25.100]  and article one courts and things like that, okay?
[24:25.100 --> 24:27.660]  Your average regular neighborhood court
[24:28.580 --> 24:30.140]  can handle any controversy
[24:30.140 --> 24:32.380]  that is brought before them between two parties
[24:32.380 --> 24:37.380]  and the judges are no better than anybody else, okay?
[24:40.220 --> 24:43.340]  Sometimes they're sterling, they really know their job
[24:43.340 --> 24:45.900]  and sometimes they're dumbasses and they don't.
[24:45.900 --> 24:48.140]  So it is important for whoever is going to file
[24:48.140 --> 24:49.220]  on behalf of the trust,
[24:49.220 --> 24:52.900]  whether it's say the grantor or whether it's the protector
[24:52.900 --> 24:55.180]  that they are able, they are prepared,
[24:55.180 --> 24:56.260]  they may not have to do it,
[24:56.260 --> 24:58.860]  but they are prepared in their filings
[24:58.860 --> 25:02.180]  to tactfully explain the principles of trust law
[25:02.180 --> 25:04.860]  to a judge who may have no experience with trust law.
[25:04.860 --> 25:07.620]  Now, the good news is when you go to court,
[25:07.620 --> 25:10.340]  the fiduciary duty that we discussed
[25:10.340 --> 25:15.180]  concerning how a trustee must act within his role as trustee,
[25:17.140 --> 25:18.940]  they're virtually identical
[25:18.940 --> 25:21.380]  between a common law trust and a statutory trust.
[25:22.180 --> 25:27.060]  The ethical requirements and the limitations of actions,
[25:27.060 --> 25:31.980]  the boundaries for the actions of trustees
[25:31.980 --> 25:35.460]  are damn close to 100% the same
[25:35.460 --> 25:38.180]  between a statutory trust and a common law trust.
[25:38.180 --> 25:42.180]  So my point being that if a judge has some experience
[25:42.180 --> 25:44.740]  with the limitations of the authority
[25:44.740 --> 25:48.180]  and the proper conduct of a trustee in a statutory trust,
[25:48.180 --> 25:50.940]  that is immediately understandable
[25:50.940 --> 25:54.020]  if a common law trust goes up in court and says,
[25:54.020 --> 25:56.100]  your honor, we need this trustee removed.
[25:56.100 --> 25:58.020]  And by the way, the courts do have the authority
[25:58.020 --> 26:02.620]  to remove a trustee who has violated their ethics,
[26:02.620 --> 26:04.980]  violated the indenture.
[26:04.980 --> 26:07.020]  And I also wanna be clear,
[26:07.020 --> 26:11.580]  the indenture lays out the form and structure
[26:11.580 --> 26:12.900]  and purpose of the trust.
[26:14.180 --> 26:17.180]  However, there are many, many, many principles
[26:17.180 --> 26:19.660]  that circumscribe the conduct of a trustee
[26:19.700 --> 26:21.540]  that are not expressed in an indenture.
[26:21.540 --> 26:25.740]  They are simply a matter of common law and well understood.
[26:27.460 --> 26:29.020]  Thank you, that was great.
[26:29.020 --> 26:31.620]  That kind of untangled some things.
[26:33.220 --> 26:35.820]  Okay, so can the trust certificate holder
[26:35.820 --> 26:38.540]  be related to the creator of the trust,
[26:38.540 --> 26:41.860]  board of trustees or the protector of the common law trust?
[26:43.660 --> 26:45.500]  Repeat the question so I make sure I understand it correctly.
[26:45.500 --> 26:46.340]  Yeah, sure.
[26:46.340 --> 26:48.460]  So can the trust certificate holder,
[26:49.220 --> 26:51.860]  can they be related to the creator of the trust,
[26:51.860 --> 26:54.020]  maybe a board of trustees or the protector
[26:54.020 --> 26:56.780]  of that said common law trust?
[26:56.780 --> 27:00.140]  They can definitely be related to the grantor.
[27:00.140 --> 27:02.740]  That's very, very typical.
[27:02.740 --> 27:04.780]  They cannot be related to the trustee
[27:04.780 --> 27:07.420]  or maybe we should say the trustee cannot be related to them.
[27:07.420 --> 27:09.660]  That's definitely a conflict of interest.
[27:09.660 --> 27:12.580]  That definitely is outside the ethical boundaries.
[27:12.580 --> 27:15.020]  And the protector cannot be associated with them
[27:15.020 --> 27:17.700]  because the protector is,
[27:21.260 --> 27:24.780]  the protector is the second most important person
[27:24.780 --> 27:25.940]  to have clean hands.
[27:26.900 --> 27:31.140]  In other words, the protector should be completely neutral.
[27:31.140 --> 27:33.260]  The protector should be able to judge the actions
[27:33.260 --> 27:36.980]  of the trustee without a bias, okay?
[27:36.980 --> 27:41.220]  So let's say the protector was the mother
[27:42.100 --> 27:43.900]  of one of the unit certificate holders.
[27:43.980 --> 27:45.540]  Clearly there's a bias imputed there.
[27:45.540 --> 27:46.740]  There's no clean hands doctrine.
[27:46.740 --> 27:48.980]  There's no arms length doctrine there, okay?
[27:48.980 --> 27:52.140]  So it's important that the protector
[27:52.140 --> 27:53.700]  should be completely non-biased
[27:53.700 --> 27:55.300]  and not have any conflict of interest
[27:55.300 --> 27:57.980]  in standard arms length from the unit certificate holders.
[27:57.980 --> 27:59.900]  Only then can the protector go,
[27:59.900 --> 28:01.740]  because what you don't wanna have happen is this.
[28:01.740 --> 28:03.860]  The protector talks to the trustee,
[28:03.860 --> 28:05.300]  attempts to sort things out.
[28:06.260 --> 28:08.940]  By the way, the 15 some odd years
[28:08.940 --> 28:09.940]  that I served as trustee,
[28:09.940 --> 28:11.020]  I never heard from a protector
[28:11.020 --> 28:13.740]  because I never ever violated
[28:13.740 --> 28:15.700]  the fiduciary duty of a trustee.
[28:15.700 --> 28:18.260]  But for the sake of this, so a protector,
[28:18.260 --> 28:20.780]  and I still serve as protector for a couple of trusts.
[28:20.780 --> 28:23.940]  So what I would do if somebody contacted me
[28:23.940 --> 28:25.740]  that were the grantor of the unit certificate holders
[28:25.740 --> 28:28.180]  and said, I think the trustee is acting
[28:28.180 --> 28:29.940]  outside his fiduciary duty.
[28:29.940 --> 28:31.980]  My first step as protector would be to get on the phone
[28:31.980 --> 28:36.060]  with the trustee and say, this is the concern.
[28:37.060 --> 28:39.900]  Can you explain to me your side of this?
[28:39.900 --> 28:42.100]  Because John, you know how people are.
[28:42.100 --> 28:45.300]  Not everybody's characterization is always factual
[28:45.300 --> 28:47.580]  or fact-based, or they might lack
[28:47.580 --> 28:51.180]  a more subtle understanding.
[28:51.180 --> 28:52.020]  So the first thing I would do
[28:52.020 --> 28:53.420]  is I would get on with the trustee
[28:53.420 --> 28:56.500]  and I would say, here's their position,
[28:56.500 --> 28:58.180]  give me your position.
[28:58.180 --> 29:02.340]  And then if it appeared that there was an ethical issue,
[29:03.660 --> 29:06.060]  fiduciary duty violation,
[29:06.060 --> 29:08.380]  I would have a conversation with the trustee
[29:08.380 --> 29:12.660]  and I would ask him for the best interest of everybody.
[29:13.980 --> 29:18.980]  That he or she steps away from that particular conduct
[29:18.980 --> 29:20.820]  and does not repeat it moving forward.
[29:21.860 --> 29:25.060]  I would ask further that they execute a document
[29:25.060 --> 29:25.900]  that would go to me
[29:25.900 --> 29:27.980]  and would go to whoever the complainant was,
[29:27.980 --> 29:30.380]  stating that they had agreed to step away
[29:30.380 --> 29:33.540]  from that particular conduct and it would not be repeated.
[29:33.540 --> 29:35.620]  Boom, we don't have to go to a courtroom.
[29:36.580 --> 29:39.300]  Nobody should ever wanna go in a courtroom, right?
[29:39.300 --> 29:41.180]  Because that can be a crapshoot, yes?
[29:41.180 --> 29:42.260]  Yes.
[29:42.260 --> 29:44.180]  So that would be the first step.
[29:44.180 --> 29:47.340]  If the trustee, if it becomes evident to the protector
[29:47.340 --> 29:52.220]  that the trustee is, we'll just say,
[29:52.220 --> 29:54.460]  is aware that the actions are stepping outside
[29:54.460 --> 29:58.300]  his fiduciary envelope and intends to continue,
[29:59.220 --> 30:00.820]  then a conversation needs to take place
[30:00.820 --> 30:03.620]  between the protector and the complainant
[30:03.660 --> 30:05.740]  and the conversation needs to become,
[30:07.500 --> 30:12.020]  does this rise to the level that you want to go to court?
[30:12.020 --> 30:14.500]  Because if you do wanna go to court as protector,
[30:14.500 --> 30:16.820]  I'm the guy who's gonna go in and argue.
[30:16.820 --> 30:20.060]  I'm happy to do that, but you need to decide
[30:20.060 --> 30:21.420]  whether this is significant enough
[30:21.420 --> 30:23.020]  that you wanna go to a courtroom.
[30:24.220 --> 30:26.980]  If they say, absolutely, I want this conduct to stop,
[30:26.980 --> 30:30.100]  then as the protector, on behalf of the trust,
[30:30.100 --> 30:33.660]  the trust would actually be the plaintiff
[30:33.660 --> 30:35.900]  and would name the trust as the defendant.
[30:35.900 --> 30:38.460]  And then I would go in court and argue before the judge
[30:38.460 --> 30:41.220]  why the trustee's actions were inappropriate.
[30:41.220 --> 30:43.660]  And at least speaking only for myself,
[30:43.660 --> 30:44.900]  there would be no question
[30:44.900 --> 30:47.540]  that I would make it very clear to the judge
[30:47.540 --> 30:50.660]  with a ton of case law that this action is inappropriate
[30:50.660 --> 30:52.500]  and the judge would agree and he would order the trustee
[30:52.500 --> 30:54.420]  to cease and desist that conduct.
[30:54.420 --> 30:56.820]  Or if it was flagrant enough
[30:57.180 --> 31:01.500]  and it was determined the trustee could not be trusted,
[31:02.780 --> 31:04.980]  it's extraordinary, it doesn't happen very often,
[31:04.980 --> 31:07.540]  but the trustee can actually be removed by the court.
[31:08.740 --> 31:11.500]  Right, and your expertise,
[31:11.500 --> 31:13.380]  you'd also be an impartial observer as well.
[31:13.380 --> 31:15.580]  So you would be more fact-based than emotional-based,
[31:15.580 --> 31:18.460]  which I would think would weigh heavily.
[31:18.460 --> 31:21.780]  Which is critical, and the judge is going to ask about that.
[31:21.780 --> 31:22.620]  The judge is going to say,
[31:22.620 --> 31:25.980]  explain why you're here representing this trust
[31:26.020 --> 31:27.460]  and explain your relationship
[31:27.460 --> 31:29.620]  to the various parties within the trust.
[31:29.620 --> 31:31.820]  And if I can say clean hands and arms length, your honor,
[31:31.820 --> 31:33.780]  I have no association with any of them.
[31:34.900 --> 31:37.340]  I just contract it into the role because they trust me.
[31:37.340 --> 31:40.100]  They're aware of who I am and what my history is,
[31:40.100 --> 31:41.700]  so they trust me.
[31:41.700 --> 31:43.860]  He would say, okay, carry, let's carry on.
[31:43.860 --> 31:46.220]  Yeah, because you're an independent third-party observer.
[31:46.220 --> 31:48.260]  You have no dog in the fight.
[31:48.260 --> 31:49.660]  So thank you, Dave.
[31:49.660 --> 31:52.900]  A couple follow-up questions to what we just discussed.
[31:52.900 --> 31:55.180]  You were talking about how they can't be related.
[31:55.180 --> 31:58.060]  So the first question would be, in your experience,
[31:58.060 --> 32:01.500]  what are the implications if they are related,
[32:01.500 --> 32:04.540]  and do you have a minimum number of trustees
[32:04.540 --> 32:07.340]  that you would recommend a person have on their trust?
[32:07.340 --> 32:09.700]  Okay, minimum number of trustees is one.
[32:09.700 --> 32:10.540]  Okay.
[32:15.460 --> 32:19.220]  There's not a lot of reason, there are some,
[32:19.220 --> 32:22.820]  but they're rare, when it would be,
[32:23.700 --> 32:24.940]  I'm not going to say necessary.
[32:25.780 --> 32:27.980]  We'll say desirable, to have more than one trustee.
[32:30.340 --> 32:32.260]  I guess this is this, let's say your trustee
[32:32.260 --> 32:34.020]  is a person of character and honor.
[32:36.500 --> 32:38.540]  Who understands trust law?
[32:38.540 --> 32:41.700]  How would that be better than five trustees
[32:41.700 --> 32:44.140]  with character and honor who understand trust law?
[32:44.140 --> 32:47.060]  Okay, it doesn't really bring anything to the table.
[32:47.060 --> 32:52.060]  Now, if you're bringing people in because of say,
[32:53.020 --> 32:56.180]  I don't mean politics in the Republican Democrat way,
[32:56.180 --> 32:58.140]  but let's say interpersonal politics,
[32:58.140 --> 33:01.660]  you're bringing somebody on board for political reasons.
[33:01.660 --> 33:04.220]  Yeah, you might want to have,
[33:04.220 --> 33:07.220]  let's say there'd be a family strike
[33:07.220 --> 33:10.300]  if you didn't make Bob a trustee, okay.
[33:10.300 --> 33:13.780]  Well, then you better have some other trustees.
[33:13.780 --> 33:18.780]  Okay, but again, for my 15 years of involvement with trusts,
[33:19.780 --> 33:22.460]  I think I can remember out of hundreds and hundreds
[33:22.460 --> 33:24.580]  and hundreds and hundreds, I can remember one case
[33:24.580 --> 33:27.100]  where there was more than one trustee.
[33:27.100 --> 33:29.740]  So that's not necessarily important.
[33:29.740 --> 33:32.660]  You asked a question about what happens
[33:32.660 --> 33:33.980]  if they are related.
[33:33.980 --> 33:35.140]  Okay. Right, right.
[33:37.380 --> 33:39.740]  Well, obviously the trust would not stand up
[33:39.740 --> 33:40.660]  under scrutiny.
[33:40.660 --> 33:42.220]  So if it ever came before a court,
[33:42.220 --> 33:47.220]  the trust, a judge may perhaps even likely
[33:47.260 --> 33:49.940]  rule that the trust is not valid, okay.
[33:49.940 --> 33:51.540]  And then the property would simply revert
[33:51.540 --> 33:56.180]  to being the property, the corpus would simply convert
[33:56.180 --> 33:58.580]  to being the property of the grantor.
[33:58.580 --> 34:01.180]  And that would be it, and the trust would be no more.
[34:02.940 --> 34:05.420]  A little bit of an awkward question for me because
[34:09.980 --> 34:13.860]  any trust creator, which is what I was back in the day,
[34:13.860 --> 34:17.420]  any trust creator who's worth their salt,
[34:18.540 --> 34:22.540]  he or she is going to ask the pertinent questions
[34:24.020 --> 34:27.180]  at the point when the application to create a trust
[34:27.180 --> 34:28.740]  is being filled out.
[34:28.740 --> 34:31.500]  And if anything comes, for instance,
[34:31.500 --> 34:34.740]  I'll just use myself as an example back in the day.
[34:34.740 --> 34:37.780]  If somebody said, well, I said, well, that's impermissible
[34:37.780 --> 34:40.380]  under the doctrine of trust law.
[34:40.380 --> 34:42.580]  And they said, well, this is the way I wanna do it.
[34:43.580 --> 34:45.940]  Fine, you're gonna need to find another creator.
[34:47.660 --> 34:51.140]  Because while the trust creator
[34:52.300 --> 34:55.780]  is not typically associated with the trust,
[34:55.780 --> 34:58.980]  normally, you go six months, six years,
[34:58.980 --> 35:00.060]  six decades down the road,
[35:00.060 --> 35:01.780]  nobody knows who created the trust,
[35:01.780 --> 35:03.860]  who the guy was who prepared the paperwork and all that.
[35:03.860 --> 35:04.820]  What they know is the trustee
[35:04.820 --> 35:06.780]  and they know the protector and so forth.
[35:08.020 --> 35:10.700]  Nevertheless, I value my reputation
[35:10.780 --> 35:15.780]  and I would never want a trust that I had created,
[35:15.900 --> 35:17.340]  that I had worked with the grantors
[35:17.340 --> 35:19.540]  and the other parties to create that corpus.
[35:19.540 --> 35:23.220]  I would never want a court to say,
[35:23.220 --> 35:27.220]  because the creator did not do his due diligence,
[35:27.220 --> 35:29.020]  I strike this trust down.
[35:29.020 --> 35:31.220]  I just find that professionally reprehensible.
[35:31.220 --> 35:36.220]  So, and I know that there are trust creators
[35:36.780 --> 35:38.220]  who don't know their business well.
[35:38.220 --> 35:39.740]  That's not a supposition.
[35:39.740 --> 35:41.300]  That's a fact.
[35:41.300 --> 35:42.900]  But I would like to think the people
[35:42.900 --> 35:43.820]  at the top of the pyramid,
[35:43.820 --> 35:46.580]  the people I trust, the people I interact with,
[35:46.580 --> 35:48.180]  would never, not in a million years,
[35:48.180 --> 35:50.580]  would they allow trust to move forward with the parties,
[35:50.580 --> 35:54.220]  the parties related who cannot properly be related.
[35:55.060 --> 35:58.620]  Right, so it sounds like if I'm hearing you correctly, David,
[35:58.620 --> 36:00.380]  proper discernment throughout
[36:00.380 --> 36:02.420]  the trust creation process is critical.
[36:03.500 --> 36:04.860]  Can you repeat that?
[36:04.860 --> 36:07.060]  I said, it sounds like what you're saying,
[36:07.060 --> 36:07.900]  if I'm hearing you right,
[36:07.900 --> 36:11.540]  is that proper discernment before, during,
[36:11.540 --> 36:13.620]  and after the trust creation process is critical,
[36:13.620 --> 36:15.780]  including the people or persons you bring in
[36:15.780 --> 36:17.220]  as your trustees.
[36:17.220 --> 36:18.300]  Absolutely correct.
[36:19.460 --> 36:22.420]  You may have heard of putting ceramic coating on a car.
[36:23.500 --> 36:27.180]  Okay, so that one guy, the guy who owns the car,
[36:27.180 --> 36:28.780]  can put ceramic coating on his whole car
[36:28.780 --> 36:31.260]  in like a half an hour, and it'll look like crap.
[36:33.260 --> 36:36.660]  The reason that we pay people thousands of dollars
[36:37.260 --> 36:39.340]  and our car is there for five or six or seven hours
[36:39.340 --> 36:42.060]  to get it done is because of the color correction
[36:42.060 --> 36:44.260]  and the decontamination of the paint.
[36:45.860 --> 36:49.020]  Only then can the ceramic coating be put on correctly.
[36:50.420 --> 36:53.260]  Will it provide the outcome you're looking for?
[36:53.260 --> 36:55.220]  It's the same thing with a trust.
[36:55.220 --> 36:57.940]  Only when that color correction
[36:57.940 --> 37:01.020]  and the decontamination process is done
[37:01.020 --> 37:04.300]  during discussions to form the trust,
[37:04.340 --> 37:06.660]  only when that's done do you get the outcome
[37:06.660 --> 37:09.180]  that is sustainable, that you're looking for.
[37:09.180 --> 37:10.460]  Yeah, I mean, you get what you pay for
[37:10.460 --> 37:12.660]  and don't take shortcuts, basically, so.
[37:12.660 --> 37:13.700]  Oh, yeah, yeah.
[37:13.700 --> 37:15.620]  And I'm gonna be very clear about this.
[37:15.620 --> 37:16.980]  You get what you pay for.
[37:16.980 --> 37:19.580]  Respectfully, I'm gonna disagree when it comes to trusts.
[37:20.780 --> 37:23.820]  I have had people mail me trust indentures
[37:23.820 --> 37:28.820]  that they literally paid $10,000 to get a trust,
[37:29.060 --> 37:31.220]  and they started to have some questions
[37:31.220 --> 37:32.460]  in their mind at some point,
[37:32.460 --> 37:34.340]  and so they paid me to review the trust documents,
[37:34.340 --> 37:36.180]  and they mailed me the trust documents.
[37:37.100 --> 37:38.500]  I read them and I was appalled.
[37:38.500 --> 37:43.060]  Utter crap, just nonsense.
[37:43.060 --> 37:48.060]  All sorts of personal philosophy, sometimes religion,
[37:48.180 --> 37:51.940]  all sorts of things that should never be in a trust indenture
[37:51.940 --> 37:53.580]  because they're not the law, right?
[37:53.580 --> 37:56.900]  And I've read these trusts, and some of them were,
[37:56.900 --> 37:59.980]  65% or 70% of crap that does not belong
[37:59.980 --> 38:01.340]  in a trust indenture.
[38:01.340 --> 38:06.340]  And that significantly elevates the chance
[38:07.060 --> 38:09.220]  that a judge who's reviewing the trust,
[38:09.220 --> 38:11.060]  if it gets challenged, for instance,
[38:12.100 --> 38:14.140]  will say, this isn't a real trust indenture.
[38:14.140 --> 38:16.460]  This is somebody's nonsense BS,
[38:16.460 --> 38:18.420]  and they'll declare the trust invalid.
[38:19.300 --> 38:22.100]  So what we want is we want everything
[38:22.100 --> 38:24.540]  that needs to be in the indenture to be there,
[38:25.660 --> 38:28.540]  and anything that doesn't belong there.
[38:28.540 --> 38:30.340]  It would be like if you and I were doing,
[38:30.500 --> 38:31.820]  executing a contract,
[38:31.820 --> 38:35.020]  I was gonna review something for you, okay?
[38:35.020 --> 38:37.620]  And suddenly the contract gets into,
[38:37.620 --> 38:40.860]  well, the earth is flat, and this and that and the other.
[38:40.860 --> 38:43.380]  I mean, would that belong in a contract?
[38:44.500 --> 38:45.780]  No, not our contract,
[38:45.780 --> 38:48.700]  not the one based on the topic we're addressing.
[38:48.700 --> 38:50.580]  And it's the same thing with common law trusts.
[38:50.580 --> 38:52.780]  And whenever the indenture contains
[38:52.780 --> 38:56.740]  a bunch of personal nonsense that doesn't belong there,
[38:57.020 --> 39:00.820]  that significantly elevates the chances
[39:00.820 --> 39:03.540]  if it gets challenged, it's going to be declared invalid.
[39:03.540 --> 39:05.100]  So, and like I said,
[39:05.100 --> 39:07.460]  I've seen that kind of language in trust
[39:07.460 --> 39:12.460]  where the grantor paid literally $10,000.
[39:12.940 --> 39:16.820]  $10,000 that a guy had in Microsoft Word on his computer,
[39:16.820 --> 39:18.580]  filled in some blanks, spit it out,
[39:18.580 --> 39:22.100]  and just, it is so irresponsible.
[39:22.100 --> 39:23.980]  So I'm professional.
[39:23.980 --> 39:25.740]  Agreed, and I should clarify, David,
[39:25.740 --> 39:27.220]  when I said, get what you pay for,
[39:27.220 --> 39:29.460]  I wasn't necessarily talking about the cost of the trust,
[39:29.460 --> 39:32.020]  but the diligence of picking your team
[39:32.020 --> 39:34.140]  and thinking through the details
[39:34.140 --> 39:35.140]  is what I was referring to.
[39:35.140 --> 39:36.660]  But yeah, you shouldn't have to pay that much.
[39:36.660 --> 39:38.660]  You're absolutely right.
[39:38.660 --> 39:39.700]  So next question I have, David,
[39:39.700 --> 39:42.020]  is how does the trustee know
[39:42.020 --> 39:44.780]  what's in the best interest of the trust
[39:44.780 --> 39:47.340]  for the benefit of the certificate holders?
[39:48.660 --> 39:51.100]  Well, the trust indenture specifies
[39:51.100 --> 39:54.380]  the purpose for which the trust exists.
[39:56.740 --> 39:59.820]  If there are specific steps
[39:59.820 --> 40:02.100]  that are intended to be taken by the trustee
[40:02.100 --> 40:05.500]  over a period of time to increase the benefit
[40:05.500 --> 40:08.260]  to the certificate holders, such as say, investing,
[40:09.260 --> 40:13.340]  that is going to be specified in the trust indenture.
[40:13.340 --> 40:14.180]  However,
[40:16.100 --> 40:18.780]  most trusts generally,
[40:18.780 --> 40:21.620]  but most especially common law trusts,
[40:21.620 --> 40:24.820]  the trustees are not experts at, for instance,
[40:25.340 --> 40:28.260]  since I mentioned investing, financial investing.
[40:28.260 --> 40:33.260]  So in that case, what the grantor would want to do
[40:33.700 --> 40:35.780]  and what the trustee should want to have done
[40:35.780 --> 40:37.580]  and the trustee should advise this
[40:37.580 --> 40:39.740]  during the formation portion
[40:39.740 --> 40:42.540]  is that a managing agent is appointed
[40:42.540 --> 40:44.260]  who does have those skillsets
[40:44.260 --> 40:45.860]  and who does have the expertise
[40:45.860 --> 40:48.260]  and who does have the track record
[40:48.260 --> 40:51.780]  of increasing wealth through investment,
[40:51.780 --> 40:53.420]  as we mentioned that.
[40:53.460 --> 40:56.300]  So then you would want to bring on a managing agent
[40:56.300 --> 40:59.540]  who in the managing agent agreement
[41:00.620 --> 41:04.380]  would have that task specifically assigned to him or her.
[41:04.380 --> 41:06.660]  And it would be to increase the value
[41:06.660 --> 41:08.060]  of the corpus of the trust
[41:08.060 --> 41:10.580]  in the best interest of the certificate holders.
[41:11.620 --> 41:15.940]  I want to be very clear that if the goal of the trust,
[41:16.900 --> 41:20.580]  what the grantor expects to happen,
[41:20.620 --> 41:23.620]  five years, 10 years, 15, 20 years down the road,
[41:23.620 --> 41:25.860]  if that is not expressed in the indenture,
[41:26.980 --> 41:28.180]  it's not gonna get done.
[41:30.220 --> 41:32.660]  Because the trustee does not have the authority
[41:32.660 --> 41:36.380]  on his or her own to simply spatch their head and say,
[41:36.380 --> 41:39.140]  no, AG WiZ, I think today
[41:39.140 --> 41:41.100]  I'm gonna unilaterally make the decision
[41:41.100 --> 41:42.380]  to do this or that.
[41:42.380 --> 41:44.700]  That's not within the trustee's purview.
[41:44.700 --> 41:45.820]  Right.
[41:45.820 --> 41:49.580]  Now, you can bring in a managing agent
[41:49.580 --> 41:51.820]  and you can open up that description
[41:51.820 --> 41:53.300]  to the point where a whole lot of things
[41:53.300 --> 41:55.460]  are within his or her purview,
[41:55.460 --> 41:57.820]  but that would be the managing agent, not the trustee.
[42:00.100 --> 42:02.060]  Yeah, that makes a lot of sense.
[42:02.060 --> 42:03.300]  Thank you.
[42:03.300 --> 42:05.260]  How do you protect the trust
[42:05.260 --> 42:08.300]  from a trustee acting in bad faith?
[42:08.300 --> 42:09.140]  You can't.
[42:10.660 --> 42:13.580]  Again, it's like, how do you stop,
[42:13.580 --> 42:15.580]  if you owned a quick mark,
[42:15.580 --> 42:18.220]  how do you stop it from being robbed?
[42:18.220 --> 42:19.180]  You can't.
[42:19.780 --> 42:20.620]  The guy walks in the door with a gun,
[42:20.620 --> 42:22.140]  sticks it in your face, you're getting robbed, right?
[42:22.140 --> 42:23.780]  The question is, what do you do after that?
[42:23.780 --> 42:28.460]  Okay, so this is where the protector comes in.
[42:28.460 --> 42:32.340]  This is where managing agents can be useful.
[42:32.340 --> 42:33.420]  Yeah.
[42:33.420 --> 42:34.860]  And of course we could turn this around
[42:34.860 --> 42:36.500]  and we could say, what happens if a managing agent
[42:36.500 --> 42:38.740]  becomes abusive, all right?
[42:38.740 --> 42:43.100]  And your question leads to something
[42:43.100 --> 42:46.700]  that back in the day I used to always pound
[42:46.700 --> 42:48.260]  during the formation phase
[42:48.260 --> 42:51.500]  when I was talking to the proposed grantor,
[42:51.500 --> 42:54.980]  I would say, if there's any doubt in your mind
[42:54.980 --> 42:59.780]  about the character or integrity of a managing agent,
[42:59.780 --> 43:02.380]  any of them, if there's more than one,
[43:02.380 --> 43:05.580]  of the trustee that you would like to see appointed,
[43:05.580 --> 43:06.980]  which typically that wasn't a problem
[43:06.980 --> 43:08.140]  because back when I used to do it,
[43:08.140 --> 43:10.220]  I was probably 99.9% of the time
[43:10.220 --> 43:12.260]  I was their selected trustee.
[43:12.260 --> 43:14.500]  And lastly, the protector.
[43:14.500 --> 43:16.420]  I would say, if you have any doubts
[43:16.420 --> 43:19.860]  about the integrity and the honor of these people,
[43:19.860 --> 43:21.380]  they don't belong in your trust.
[43:23.460 --> 43:28.460]  I can only say that during my 15 years,
[43:29.700 --> 43:34.620]  I was unaware of any officer of a corporation,
[43:34.620 --> 43:37.220]  I'm sorry, of a common law trust
[43:37.220 --> 43:41.340]  that took actions that the grantor
[43:41.340 --> 43:43.700]  would have found problematic.
[43:44.700 --> 43:48.340]  So apparently the grantors that I talked to
[43:48.340 --> 43:53.100]  all got the message that you need to have sterling trust
[43:53.100 --> 43:56.060]  in the people that you wanna see in these positions.
[43:56.060 --> 43:56.900]  Sure.
[43:57.860 --> 44:00.660]  Now, back to your question though, how do you stop them?
[44:00.660 --> 44:02.300]  Okay, well, first of all, you have to detect it.
[44:02.300 --> 44:04.060]  So embezzlement, right?
[44:04.060 --> 44:04.900]  No.
[44:06.860 --> 44:08.780]  Companies normally don't understand
[44:08.780 --> 44:11.060]  that somebody over in accounting is embezzling
[44:11.060 --> 44:13.220]  until there's an audit 18 months, 24 months,
[44:13.740 --> 44:14.660]  36 months down the road.
[44:14.660 --> 44:18.180]  And the auditor walks into the CFO's office and says,
[44:18.180 --> 44:21.140]  I think we have a problem.
[44:21.140 --> 44:23.020]  And then they do forensic accounting
[44:23.020 --> 44:24.500]  and they accumulate the evidence
[44:24.500 --> 44:26.220]  and they go after the person, right?
[44:26.220 --> 44:29.980]  So it's much the same in any structure
[44:29.980 --> 44:32.900]  where there are multiple people involved.
[44:32.900 --> 44:35.220]  First of all, you have to become aware
[44:35.220 --> 44:37.060]  that somebody is acting inappropriately.
[44:37.060 --> 44:39.580]  Then you have to conduct an investigation
[44:39.580 --> 44:41.660]  and the courts can help with this
[44:41.700 --> 44:42.980]  through the subpoena power.
[44:42.980 --> 44:44.660]  If you file an action,
[44:44.660 --> 44:47.860]  then you can use the subpoena power to get the records,
[44:47.860 --> 44:50.500]  whether it's an errant managing agent,
[44:50.500 --> 44:52.620]  whether it's an errant trustee,
[44:52.620 --> 44:55.860]  if they refuse to make records available,
[44:55.860 --> 44:58.300]  which would be an immense red flag.
[44:58.300 --> 45:01.500]  Any trustee or managing agent
[45:01.500 --> 45:05.500]  that refuses to make available the non-private records,
[45:08.540 --> 45:09.940]  because for instance, you wouldn't wanna surrender
[45:09.940 --> 45:11.180]  somebody's medical records.
[45:11.700 --> 45:14.260]  But if it's simply business records
[45:14.260 --> 45:17.140]  or simply the business of conducting a trust,
[45:17.140 --> 45:19.340]  those should be available to the trustee
[45:19.340 --> 45:21.620]  if he or she ever requests them
[45:21.620 --> 45:23.820]  and to the protector immediately.
[45:23.820 --> 45:25.820]  If the trustee or a managing agent says,
[45:25.820 --> 45:28.020]  I hear your request and the answer is no,
[45:29.740 --> 45:32.580]  there could not be a bigger red flag waving,
[45:32.580 --> 45:34.140]  that there is a problem, yeah.
[45:35.100 --> 45:36.940]  Clearly, no, that's a good point.
[45:36.940 --> 45:39.020]  You're mentioning rightly, David,
[45:39.020 --> 45:43.220]  the costs, the $10,000 sort of extreme example
[45:43.220 --> 45:44.780]  of a trust that you've seen before.
[45:44.780 --> 45:45.620]  So with that in mind,
[45:45.620 --> 45:50.620]  what is a realistic or measured baseline cost
[45:51.140 --> 45:53.140]  for creating a general common law trust
[45:53.140 --> 45:56.860]  and what is the management fee for maintaining such trust?
[45:58.020 --> 45:58.860]  Wow.
[46:00.900 --> 46:02.700]  Well, they are all over the map.
[46:03.020 --> 46:04.220]  Okay.
[46:04.220 --> 46:08.660]  I have seen junk trusts
[46:09.860 --> 46:13.060]  that I wouldn't encourage my worst enemy to use
[46:13.060 --> 46:15.020]  for like $1,500.
[46:15.020 --> 46:18.380]  I've seen garbage trusts for $10,000.
[46:19.540 --> 46:23.860]  I've seen people ask for thousands of dollars a year
[46:23.860 --> 46:26.500]  to sit as trustee, which is absurd.
[46:33.140 --> 46:34.580]  I'm not sure.
[46:36.620 --> 46:40.460]  I can't answer what like the going rate is for a trust
[46:40.460 --> 46:42.060]  because this isn't like going to the car lot
[46:42.060 --> 46:43.780]  and pricing cars, right?
[46:43.780 --> 46:44.620]  Right, right.
[46:44.620 --> 46:46.740]  And you're paying for expertise
[46:46.740 --> 46:48.740]  is really what it comes down to.
[46:48.740 --> 46:53.060]  And oh my God, I hate to say this, but it is the truth.
[46:54.220 --> 46:57.980]  So many people who are involved in the trust game,
[46:57.980 --> 46:59.980]  they're just out and outliers.
[46:59.980 --> 47:02.140]  They'll tell you they're God's gift to trusts
[47:02.140 --> 47:06.940]  and they don't know what they're talking about.
[47:06.940 --> 47:08.380]  They're slinging crap.
[47:08.380 --> 47:11.100]  They don't understand the fiduciary boundaries
[47:11.100 --> 47:11.940]  for trustees.
[47:11.940 --> 47:14.260]  Just all sorts of horrible stuff.
[47:14.260 --> 47:15.740]  So you're paying for experience.
[47:15.740 --> 47:16.820]  You're paying for rectitude.
[47:16.820 --> 47:17.940]  You're paying for intelligence.
[47:17.940 --> 47:19.340]  You're paying for integrity.
[47:22.020 --> 47:26.860]  I'm gonna guess the going rate that's realistic
[47:26.860 --> 47:31.220]  that you know it's not junk and you're not getting ripped off
[47:31.300 --> 47:34.460]  might be somewhere in the range of four to $6,000.
[47:37.340 --> 47:38.540]  Okay.
[47:38.540 --> 47:40.500]  I think that's what most people need to get an idea
[47:40.500 --> 47:45.500]  of what's reasonable to get for the proper expertise.
[47:46.140 --> 47:47.940]  I would say if a trustee is asking
[47:47.940 --> 47:51.100]  for anything more than a thousand dollars a year
[47:51.100 --> 47:53.540]  and even that I'd be, huh, really a thousand?
[47:54.660 --> 47:56.820]  But if a trustee is asking for anything more
[47:56.820 --> 47:59.620]  than a thousand dollars, you're getting ripped off.
[47:59.620 --> 48:02.420]  I've seen trustee fees as low as $400 a year.
[48:02.420 --> 48:04.260]  I've seen them, you know, 800, 900.
[48:04.260 --> 48:06.660]  But if they're saying more than a thousand dollars,
[48:06.660 --> 48:08.980]  you're talking to a scam artist.
[48:08.980 --> 48:12.140]  Unless there's something very unique about that trust
[48:12.140 --> 48:15.580]  that requires that trustee to be active
[48:15.580 --> 48:16.660]  week in and week out.
[48:16.660 --> 48:18.100]  I've never seen that.
[48:18.100 --> 48:20.540]  But then I could understand a higher fee.
[48:20.540 --> 48:21.380]  Fair enough.
[48:21.380 --> 48:22.740]  Well, that's a great follow-up question
[48:22.740 --> 48:24.980]  that I had for you, David, on what you just said.
[48:24.980 --> 48:28.060]  So with that in mind, what is the ideal criteria
[48:28.060 --> 48:30.340]  for selecting a common law trust expert?
[48:40.060 --> 48:42.900]  It's, I can give you the answer,
[48:42.900 --> 48:44.900]  but what I'm thinking in my head
[48:44.900 --> 48:49.540]  is how does the average Joe know that?
[48:49.540 --> 48:52.420]  So the answer is, I've mentioned it
[48:52.420 --> 48:53.580]  or hinted at it a couple of times.
[48:53.580 --> 48:55.140]  You want somebody who has experience.
[48:55.140 --> 48:56.380]  You want somebody who has rectitude.
[48:56.380 --> 48:57.460]  You want somebody who has character
[48:57.460 --> 48:59.820]  and integrity and experience and knowledge.
[48:59.820 --> 49:00.660]  Somebody who's intelligent.
[49:00.660 --> 49:01.660]  Somebody who understands the law.
[49:01.660 --> 49:04.500]  Somebody who understands trust law specifically.
[49:05.780 --> 49:08.740]  So why do people hire attorneys?
[49:08.740 --> 49:10.300]  They hire attorneys because they don't know
[49:10.300 --> 49:11.900]  anything about the law, right?
[49:12.980 --> 49:17.980]  So when you go to contract for a trustee,
[49:20.620 --> 49:24.620]  the average Joe who begins that process,
[49:24.660 --> 49:27.740]  how do they know anything about trust law?
[49:27.740 --> 49:30.220]  Though, and as I indicated before,
[49:30.220 --> 49:33.620]  there's such a huge percentage of people
[49:33.620 --> 49:37.980]  who are doing trusts that just,
[49:40.940 --> 49:43.460]  either they think they know more than they do,
[49:44.580 --> 49:46.940]  which can harm somebody, right?
[49:46.940 --> 49:49.060]  They don't know what they don't know
[49:49.060 --> 49:50.900]  or they're just scam artists.
[49:50.900 --> 49:52.660]  So for instance, take me as an example.
[49:52.660 --> 49:53.820]  We're sitting here talking.
[49:54.820 --> 49:56.860]  If somebody said,
[49:58.060 --> 50:02.660]  Dave, explain to me why you would make a good trustee, okay?
[50:03.700 --> 50:04.740]  I can lay it out,
[50:06.940 --> 50:09.660]  but how would they know I'm not a lying sack of shit?
[50:12.140 --> 50:16.540]  So it's challenging to find somebody
[50:18.860 --> 50:22.180]  who does possess all of those attributes.
[50:22.220 --> 50:23.980]  They have rectitude, they have knowledge,
[50:23.980 --> 50:26.580]  they have experience, they have honor, they have character,
[50:26.580 --> 50:28.500]  they understand law generally,
[50:28.500 --> 50:30.940]  they understand trust law specifically.
[50:30.940 --> 50:32.460]  You know, there's not a lot of those guys out there,
[50:32.460 --> 50:36.860]  which is why the community of trust providers
[50:36.860 --> 50:38.460]  is such an ugly mess,
[50:38.460 --> 50:41.980]  because most of them just got in it,
[50:44.020 --> 50:45.820]  a lot of them got in it just so they could make some money.
[50:45.820 --> 50:48.260]  Let's be plain about that.
[50:48.260 --> 50:50.900]  And even those that might've had a higher motivation,
[50:50.900 --> 50:52.740]  again, they don't know what they don't know,
[50:52.740 --> 50:53.980]  and that's dangerous.
[50:55.820 --> 50:57.060]  I'm not in the game anymore,
[50:57.060 --> 51:00.860]  but I'm hoping as an example, through this interview,
[51:02.700 --> 51:04.740]  your audience would say,
[51:04.740 --> 51:07.220]  based on the knowledge
[51:07.220 --> 51:09.460]  that Dave has put out during this interview,
[51:09.460 --> 51:11.980]  I believe Dave would be a good trustee,
[51:14.940 --> 51:16.580]  because we've had some time together,
[51:16.580 --> 51:19.060]  and you've asked some very poignant questions.
[51:20.980 --> 51:25.980]  I hope that your audience saw my responses
[51:26.100 --> 51:31.100]  as factual and legal and practical, how it works.
[51:33.740 --> 51:35.980]  But how do they judge somebody?
[51:37.740 --> 51:38.620]  They don't know.
[51:38.620 --> 51:40.420]  They haven't heard this kind of dialogue.
[51:40.420 --> 51:41.940]  How do they judge that?
[51:41.940 --> 51:43.980]  For instance, I'm not gonna name any names,
[51:43.980 --> 51:48.420]  but there was a person who was interviewed about trust law,
[51:48.420 --> 51:52.060]  and he made the statement during the interview.
[51:52.060 --> 51:54.100]  Oh, the whole thing, I'm paraphrasing,
[51:54.100 --> 51:56.220]  it was, oh yeah, the whole thing about trusts
[51:56.220 --> 51:59.540]  is you surrender your legal rights,
[51:59.540 --> 52:02.460]  but you maintain your practical rights over the property.
[52:02.460 --> 52:03.700]  Okay.
[52:03.700 --> 52:08.700]  And in a good many trusts, frankly,
[52:09.940 --> 52:13.340]  that's probably the game that the grantor's playing.
[52:13.340 --> 52:14.900]  Okay, let's be frank.
[52:14.900 --> 52:17.900]  In a good many trusts, that's the game that's being played.
[52:17.900 --> 52:19.780]  But for a guy who's creating trust,
[52:19.780 --> 52:21.780]  the writing trust, serving his trustee,
[52:22.860 --> 52:25.460]  to publicly come out and say that,
[52:25.460 --> 52:27.020]  what's gonna happen if somebody challenges
[52:27.020 --> 52:27.940]  one of his trusts?
[52:29.380 --> 52:33.180]  Okay, somebody's gonna bring into court his statement,
[52:33.180 --> 52:34.020]  and the judge is gonna say,
[52:34.020 --> 52:36.020]  oh, so your trust are basically a scam.
[52:39.100 --> 52:42.700]  So, when I said a trustee should have rectitude,
[52:43.820 --> 52:45.900]  you should know when to keep his damn mouth shut.
[52:45.900 --> 52:50.900]  And first, we've talked before the show,
[52:51.380 --> 52:56.100]  there's some people I'm not involved with them.
[52:56.100 --> 52:57.540]  I know them, that's a better way to phrase it.
[52:57.540 --> 53:00.340]  I trust them implicitly, known them for decades.
[53:01.700 --> 53:05.340]  And you probably know because you made an offer
[53:05.340 --> 53:08.820]  and he declined, he has rectitude.
[53:08.820 --> 53:10.260]  He's not going out.
[53:10.260 --> 53:11.740]  He doesn't wanna be in the public eye.
[53:11.740 --> 53:14.140]  He doesn't want everybody to know his name.
[53:14.140 --> 53:15.740]  He has rectitude.
[53:16.580 --> 53:21.580]  He's keeping his community small, right?
[53:21.780 --> 53:25.260]  The people who need good common law trusts come to him.
[53:26.180 --> 53:27.380]  He doesn't need to be a superstar.
[53:27.380 --> 53:28.420]  He doesn't need to be a rock star.
[53:28.420 --> 53:29.380]  He doesn't need to be interviewed.
[53:29.380 --> 53:31.500]  He doesn't want everybody in the world knowing his name.
[53:31.500 --> 53:33.260]  He just wants to do his damn job.
[53:33.260 --> 53:34.180]  That's rectitude.
[53:35.900 --> 53:39.420]  So, again, back to your question.
[53:39.420 --> 53:40.740]  I don't know how they can know
[53:40.740 --> 53:44.460]  because they would have to know what the right answers are
[53:44.460 --> 53:46.500]  to know that they've got the right guy.
[53:46.500 --> 53:48.180]  And there's a lot of great bullshit artists out there.
[53:48.180 --> 53:51.780]  So, how do people know they're getting bullshitted?
[53:54.260 --> 53:55.700]  Well, I think that's why we brought you on
[53:55.700 --> 53:58.060]  to help kind of simplify and cut through that
[53:58.060 --> 54:01.020]  and give people some guide tools or navigations
[54:01.020 --> 54:02.580]  to at least know what to look for
[54:02.580 --> 54:05.380]  to get closer to that path point, you know?
[54:05.380 --> 54:06.420]  So.
[54:06.420 --> 54:07.660]  In the fact, hopefully the fact
[54:07.660 --> 54:09.460]  that I don't do trust anymore.
[54:09.460 --> 54:10.300]  Right.
[54:10.300 --> 54:11.340]  Haven't in years.
[54:12.340 --> 54:16.580]  Hopefully that allows members of your audience
[54:16.580 --> 54:19.060]  to see more credibility
[54:19.060 --> 54:21.260]  because I have no dog in this fight.
[54:21.260 --> 54:22.300]  Sure.
[54:22.300 --> 54:23.140]  Yeah.
[54:23.140 --> 54:23.980]  I have no interest.
[54:23.980 --> 54:25.580]  My hands are clean.
[54:25.580 --> 54:27.140]  Well, I mean, I think it gives you, again,
[54:27.140 --> 54:29.060]  a level of, when you've worked for your clients,
[54:29.060 --> 54:30.580]  a level of objectivity.
[54:30.580 --> 54:31.780]  You know, you had no dog in the fight
[54:31.780 --> 54:33.060]  and the judge saw that as well,
[54:33.060 --> 54:35.780]  which adds to credibility to give people that.
[54:35.780 --> 54:37.820]  Because what we're trying to do is create comfort and peace
[54:37.820 --> 54:40.220]  about this with the, you know, upcoming reset
[54:40.220 --> 54:41.300]  that's happening.
[54:41.300 --> 54:44.340]  We've had, you know, subject matter experts before,
[54:44.340 --> 54:45.180]  as you know,
[54:46.140 --> 54:49.020]  and people came away with more questions and answers.
[54:49.020 --> 54:50.940]  So I think your simplification of it
[54:50.940 --> 54:52.660]  and getting down to the marrow of it
[54:52.660 --> 54:55.420]  helps people to get a level of, you know,
[54:55.420 --> 54:57.820]  comfort and clarity that's desperately needed
[54:57.820 --> 54:59.740]  at this time, as you would agree.
[54:59.740 --> 55:01.340]  So the last question I have for today, Dave,
[55:01.340 --> 55:03.060]  because we're gonna bring you back on next month
[55:03.060 --> 55:04.780]  to talk about, you know,
[55:04.780 --> 55:06.900]  another popular subject of taxation
[55:06.900 --> 55:08.300]  and why it's not required
[55:08.300 --> 55:11.420]  and what you can do lawfully to, you know, subvert it
[55:11.420 --> 55:13.820]  and be in good standing.
[55:13.820 --> 55:15.140]  But that's for the next show.
[55:15.140 --> 55:18.340]  Just, I'm previewing for people that we are aware of that.
[55:18.340 --> 55:20.220]  We're gonna be covering that with you summarily
[55:20.220 --> 55:22.300]  now that they're getting familiar with you.
[55:23.220 --> 55:25.700]  Again, this is a general guide thing too,
[55:25.700 --> 55:28.980]  but when somebody's building a trust
[55:28.980 --> 55:32.420]  and they, let's say they get two trustees, three trustees,
[55:32.420 --> 55:34.580]  and they get a managing director, as you said,
[55:34.580 --> 55:36.860]  to kind of have continuous oversight.
[55:37.820 --> 55:40.300]  Say somebody is single, they're not married,
[55:40.300 --> 55:42.980]  they don't have kids, but they're planning to have a family.
[55:42.980 --> 55:44.740]  And so they're gonna need to amend that trust
[55:44.740 --> 55:45.940]  as they go along.
[55:45.940 --> 55:49.300]  How many meetings do you recommend that a person has?
[55:49.300 --> 55:52.300]  Is it per need or do you recommend once a month
[55:52.300 --> 55:55.460]  just to keep things kind of open dialogue
[55:55.460 --> 55:56.860]  and make sure everybody's on the same page?
[55:56.860 --> 55:58.700]  What's your guide for that?
[55:58.700 --> 55:59.660]  There is no fixed number.
[55:59.660 --> 56:00.660]  Let me start with that.
[56:00.660 --> 56:01.940]  Sure.
[56:01.940 --> 56:03.060]  Especially in a common law trust.
[56:03.060 --> 56:05.940]  Some statutory trusts, there are statutory requirements.
[56:05.940 --> 56:08.500]  In a common law trust, there is no requirement.
[56:08.500 --> 56:13.500]  So meetings are, I don't wanna say optional,
[56:14.300 --> 56:18.380]  because if there's something of a momentous thing happening,
[56:18.380 --> 56:20.220]  there should be a meeting.
[56:20.220 --> 56:23.860]  If the indenture specifies that meetings shall take place
[56:23.860 --> 56:28.220]  at particular moments, it can be based on calendar months,
[56:28.220 --> 56:29.500]  it can be based on events,
[56:29.500 --> 56:33.020]  it can be based on general need,
[56:33.260 --> 56:35.460]  sort of an open-ended, if the need arises.
[56:39.180 --> 56:41.380]  But you specifically talked about the fact
[56:41.380 --> 56:42.980]  that the unit certificate holders
[56:42.980 --> 56:45.660]  may not be the grantor's children,
[56:45.660 --> 56:48.460]  but the grantor intends to have a family.
[56:48.460 --> 56:50.980]  So in that eventuality, what should happen
[56:50.980 --> 56:53.140]  should be the unit certificate holder
[56:53.140 --> 56:57.940]  should be chosen very carefully, because here's why.
[56:57.940 --> 57:00.780]  The unit certificate holders can surrender their units.
[57:01.260 --> 57:04.300]  Okay, so for instance, let's say I wanted to start a family.
[57:04.300 --> 57:05.140]  I'm a little old for that,
[57:05.140 --> 57:07.340]  but for the sake of this illustration.
[57:07.340 --> 57:12.340]  So I might choose one guy that I know has sterling character,
[57:14.060 --> 57:16.100]  I've known him my whole life, right?
[57:16.100 --> 57:17.260]  Like a brother to me.
[57:17.260 --> 57:19.140]  Okay, I want you to be the unit certificate holder.
[57:19.140 --> 57:20.900]  So he signs on.
[57:20.900 --> 57:23.060]  So then I get married a couple of years down the road,
[57:23.060 --> 57:24.980]  I have a kid, a couple of years later I have another kid,
[57:24.980 --> 57:25.820]  a couple of years later I have another kid.
[57:25.820 --> 57:28.100]  So now I have three children, right?
[57:28.100 --> 57:31.700]  So now I go back to him and I say,
[57:31.700 --> 57:34.900]  I would like you to surrender your units
[57:34.900 --> 57:36.180]  back to the trustee.
[57:37.020 --> 57:39.580]  Okay, so he gets sent a document,
[57:39.580 --> 57:40.980]  he fills it out and notarizes it
[57:40.980 --> 57:45.180]  and sends it back to the trustee surrendering his units.
[57:45.180 --> 57:48.460]  The trustee then reassigns those units
[57:49.300 --> 57:51.900]  based on the information that was provided to the trustee
[57:51.900 --> 57:54.420]  at the time that the trust was formed.
[57:54.460 --> 57:57.700]  The trustee reassigns those units
[57:57.700 --> 57:59.820]  to the children of the grantor
[57:59.820 --> 58:02.620]  based on whatever percentage was discussed going in.
[58:04.820 --> 58:06.580]  Jay, I don't know if you're aware of this.
[58:07.780 --> 58:09.980]  It doesn't have, if you have three children,
[58:12.540 --> 58:15.780]  each of them doesn't have to receive 33 and a third units.
[58:17.540 --> 58:21.100]  It can be specified that one child will receive 20 units
[58:21.100 --> 58:22.740]  and the other child receive 50 units
[58:22.740 --> 58:24.220]  and the third child receive 30 units
[58:25.060 --> 58:27.620]  because there's typically 100 units
[58:27.620 --> 58:29.940]  and that can't be exceeded.
[58:29.940 --> 58:30.980]  Correct.
[58:30.980 --> 58:33.100]  Yeah, I'm glad you clarified that
[58:33.100 --> 58:34.460]  because that's good for people to know.
[58:34.460 --> 58:36.500]  So again, thank you.
[58:36.500 --> 58:38.020]  So Dave, we're coming up to the end here.
[58:38.020 --> 58:40.260]  So as always, what we do with our guests that you'll learn
[58:40.260 --> 58:43.060]  is final words you have for the audience today
[58:43.060 --> 58:45.420]  and where can people find out about your work?
[58:46.340 --> 58:48.540]  Okay, final words to the audience.
[58:50.500 --> 58:51.420]  Don't get taken.
[58:52.220 --> 58:54.820]  It's an ugly scene out there
[58:54.820 --> 58:55.940]  when it comes to common law trust.
[58:55.940 --> 58:58.700]  Please do your due diligence, don't get taken.
[58:59.540 --> 59:02.940]  And try, if there's some other source
[59:02.940 --> 59:03.820]  you can get information,
[59:03.820 --> 59:06.660]  please do not believe the trust creator.
[59:06.660 --> 59:08.380]  They have a financial interest
[59:08.380 --> 59:11.380]  in getting you to believe whatever they say.
[59:11.380 --> 59:14.100]  So that is inherently a conflict of interest going in.
[59:15.300 --> 59:16.660]  So if there's any other source
[59:16.660 --> 59:19.580]  from which you can get information to verify or not,
[59:19.580 --> 59:22.100]  what they're saying, try and find that source.
[59:22.100 --> 59:23.900]  If I could be of any assistance,
[59:23.900 --> 59:25.900]  people can reach me at my email address,
[59:25.900 --> 59:29.260]  which is dave at drreality.news.
[59:29.260 --> 59:34.260]  That's dave at drreality.news
[59:34.260 --> 59:36.060]  so they can reach me there anytime.
[59:39.700 --> 59:41.340]  Anything else that you...
[59:41.340 --> 59:43.220]  I wish I had great words of wisdom.
[59:44.820 --> 59:46.620]  Again, I guess I would say
[59:46.620 --> 59:49.040]  if you're in some sort of regulated industry,
[59:50.580 --> 59:52.700]  it depends on what regulated industry,
[59:52.700 --> 59:55.500]  but if you're in some sort of regulated industry,
[59:55.500 --> 59:58.100]  perhaps a common law trust is not for you.
[59:59.980 --> 01:00:01.500]  And by the way, I should also point out,
[01:00:01.500 --> 01:00:02.580]  I think one of the advantages
[01:00:02.580 --> 01:00:03.860]  that people see of a common law trust
[01:00:03.860 --> 01:00:06.620]  is they're free and clear of the income tax system.
[01:00:06.620 --> 01:00:08.900]  And that's only true if the activities of the trust
[01:00:08.900 --> 01:00:11.140]  don't fall within the boundaries of income tax law,
[01:00:11.140 --> 01:00:14.020]  which is probably 99.9999% of the time.
[01:00:14.020 --> 01:00:17.860]  Nevertheless, the same is true of an LLC.
[01:00:17.900 --> 01:00:20.700]  An LLC that doesn't engage
[01:00:20.700 --> 01:00:22.940]  in the very narrow scope of activities
[01:00:22.940 --> 01:00:24.460]  upon which Congress doesn't pose the income tax.
[01:00:24.460 --> 01:00:26.260]  They're also free of the income tax.
[01:00:27.340 --> 01:00:31.700]  So again, somebody tells me they're running a shoe shop.
[01:00:31.700 --> 01:00:34.500]  Okay, common law trust might be right,
[01:00:34.500 --> 01:00:36.460]  or running it in their own name might be right.
[01:00:36.460 --> 01:00:38.640]  If they're running, I don't know,
[01:00:40.060 --> 01:00:42.060]  what do they call it, the people who clean up your yard
[01:00:42.060 --> 01:00:44.380]  and they do golf courses and stuff?
[01:00:44.380 --> 01:00:46.640]  Landscape, yeah.
[01:00:46.640 --> 01:00:49.000]  So if somebody owns a large landscaping business
[01:00:49.000 --> 01:00:50.280]  and they've got a lot of power tools
[01:00:50.280 --> 01:00:52.760]  and trucks out there and a lot of workers, okay.
[01:00:52.760 --> 01:00:56.120]  So common law trust might be really, really good for them.
[01:00:56.120 --> 01:00:56.960]  Okay.
[01:00:58.400 --> 01:01:02.600]  If they're engaged in the manufacturing of ammunition,
[01:01:04.440 --> 01:01:06.600]  don't go with a common law trust.
[01:01:06.600 --> 01:01:10.800]  So yeah, just again, if I can be of assistance,
[01:01:10.800 --> 01:01:12.360]  people can reach out.
[01:01:12.360 --> 01:01:14.160]  Yeah, and we'll leave all those links in the description
[01:01:14.160 --> 01:01:15.440]  so people can get ahold of you
[01:01:15.440 --> 01:01:17.580]  and we'll look forward to seeing you again next month
[01:01:17.580 --> 01:01:20.960]  on the subject of taxation, which is a great segue point.
[01:01:20.960 --> 01:01:23.640]  So again, Dave Champion, thank you for being here.
[01:01:23.640 --> 01:01:24.600]  We're honored to have you
[01:01:24.600 --> 01:01:26.640]  and thank you for all the information you provided
[01:01:26.640 --> 01:01:29.040]  and we will look forward to seeing you again shortly.
[01:01:29.040 --> 01:01:30.160]  Thanks, Sean.
[01:01:30.160 --> 01:01:31.000]  Take care.