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Welcome to the era of absolute financial sovereignty. We live in “interesting times”: a term often used as a hidden curse to describe periods of inflation, political instability, and job insecurity. While most people are drifting in a sea of uncertainty, those in the know are seeking a Safe Harbor. That safe harbor is the Spendthrift Trust.

THE TWO WORLDS OF TRUST LAW: STATUTORY VS. CONTRACT

Most people, including your average attorney, only understand one world: Statutory Law Trusts. These are “creatures of the legislature.” They exist only because a state legislature passed a law allowing them to be created. Because the state created them, the state controls them, regulates them, and taxes them.

Then there is the private world: Contract Law Trusts.

A Contract Law Trust is based on the Constitution of the United States, Article I, Section 10, which states: “No state shall pass a law impairing the obligation of contracts.” This trust is a private contract between private parties. Because it is not a creature of the legislature, it is not subject to the myriad of strangling rules and regulations applicable to corporations and statutory entities.

The Supreme Court confirmed this in Elliott v. Freeman (220 U.S. 178). The ruling held that trust relationships come under the realm of equity based on common law and are NOT subject to legislative restrictions.

THE 5 PILLARS OF INCOMPARABLE PROTECTION

To operate at the highest level of efficiency and protection, your trust must be built on these five immovable pillars:

1. NON-GRANTOR: The Creator (Settlor) has no management over the assets, is not a beneficiary, and will never be considered an “alter ego” by the IRS.
2. IRREVOCABLE: Assets are irrevocably sold to the trust. They cannot “revert” to the person making the transfer, ensuring the shield remains intact.
3. COMPLEX: This structure serves the beneficiaries while protecting the corpus (the body of assets) from external threats.
4. DISCRETIONARY: The Trustee has absolute and sole discretionary power. They decide when and if distributions are made, protecting the assets from being seized or turned over.
5. SPENDTHRIFT: This is the ironclad provision. No outside force can penetrate the trust. No lawsuit, no court order, and no seizure can touch the assets held within the Spendthrift Trust.

MASTERING THE ROLES WITHIN THE CIRCLE

Operating within DK’s Private Business Circle requires understanding the hierarchy of a private contract trust:

• THE SETTLOR: The official creator. Their only job is to create the trust and use their information to obtain the EIN. Once the trust documents are signed, they are removed completely.
• THE COMPLIANCE OVERSEER: This individual holds full control over the trust’s direction. They can add or remove Trustees at will but cannot be a beneficiary.
• THE TRUSTEE: The Trustee holds legal title and manages the trust. They have the power to add or remove beneficiaries.
• THE BENEFICIARIES: They hold the beneficial interest but have zero management power and no access to trust records. This separation is what keeps the assets protected.

THE ASSET TRANSFER PROCESS: HOW TO MOVE WEALTH PRIVATELY

You don’t simply “give” assets to a Spendthrift Trust; you sell them. This is a private transaction that stays off the public record.

We use a Cost Basis Price for the sale. This is the original price you paid for the asset, plus any improvements, minus depreciation. By selling at cost basis, you do not trigger a capital gains tax event.

1. Bill of Sale: A private document listing all assets (Exhibit A).
2. Promissory Note: The Trust gives you a “Demand Promissory Note” (an IOU) instead of cash.
3. Return of Capital: When you, as the Trustee, need funds, you simply withdraw them from the Promissory Note. This is legally considered a Return of Capital, which is NOT a taxable event.

THE STRATEGY FOR ZERO TAXES

The Spendthrift Trust is designed to zero out at the end of every year. Because it is a Contract Law Trust, it is invisible to the state. It does not register with the Secretary of State, meaning no state income tax.

Here is how the “Zero-Out” strategy works:
The Trust can pay for almost all legitimate expenses:

• Real Estate: Mortgage, insurance, property taxes, maintenance, and landscaping.
• Vehicles: Gas, oil changes, repairs, registration, and insurance.
• Beneficiaries: Health, wellness, and education expenses (not just accredited schools: any form of learning).

At the end of the year, if there is $50,000 of taxable income left after all expenses, the Trustee simply withdraws that $50,000 against the Promissory Note. Because that withdrawal is a return of capital, it is not taxable to the individual. The Trust now has zero taxable income left. Zero taxes for the Trust. Zero taxes for you.

TAKE ACTION NOW

Stop operating in the public sector where you are subject to every new legislative whim and “interesting” tax law. Move your life and business into the Safe Harbor of a Contract Law Spendthrift Trust.

Schedule your strategy session now to discuss how to shield your assets, eliminate your tax burden, and gain absolute freedom.

Text “Private Life” to 702-200-4900 immediately.

Welcome to the Private Sector. Welcome to DK’s Private Business Circle.