If you've made significant gains in crypto and want to secure your wealth for the long term, setting up a family office is a key step. In this video, we break down the essential steps you need to take—from building a professional team to estate planning and structuring your investments for sustainability.
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00:00In today's video, we're going to run down some of the steps that you need to take
00:03if you make a ton of money in crypto, if you want to set up a family office and be successful
00:07over the long term. A lot of people have a significant allocation to digital assets right
00:15now. They've bought during the bear market. We've seen some price appreciation and with the
00:19anticipation of some really material gains coming along, people taking profits and managing those
00:25assets over the long term, I wanted to run down some of the best practices and things you might
00:29be thinking about as that takes place. So you want to build a professional team around yourself and
00:34you want to build it early. So that's going to require, you know, maybe a tax attorney, other
00:40types of attorneys, legal, a CPA or tax advisor, as well as a wealth manager to make sure that
00:48your assets are protected and you have a solid foundation to safeguard your assets over the
00:52long term. And it's great to go ahead and start reaching out to these people now, even before
00:57you have 20, 50, 100 million dollars worth of value or net worth. You can start these conversations
01:03with people and the people that don't give you the time of day before you have the money are often the
01:08people that are also going to be beating down your door on the other side of you coming into the money
01:11and may not have your best intentions at heart. People that are willing to work with you early on
01:16and foster that relationship or in it for the long term and likely, again, going to be a better part of
01:22your team than somebody that shows up later that just wants to check. So, you know, and the more
01:28conversations that you have with these professionals, the better you're going to understand
01:32the lingo. Interviewing these people is what you're doing when you're having these conversations early
01:37on to make sure that they're going to be a good fit culturally with your family, with their alignment
01:42and values, their core values and what they want to accomplish, where they see themselves helping
01:48their clients over the long term. All these things are what stuff that you want to ask when you're
01:53interviewing these professionals that you might be working with in the future. If they start telling
01:58you about quick ways to save money with, you know, tax credits or things that seem too good to be true
02:05or if they want to oversell themselves, just take all that with a grain of salt. They may or may not be
02:12the person you want to work with. But again, you know, like the old adage says, anything that's too
02:19good to be true usually is. So if they're quick to tell you why they're better than everybody else
02:24or poo-poo their competitors, probably not the best person to be working with. You want people that are
02:29honest, that have integrity. They're going to tell you where they're deficient. If they don't have an
02:33expertise in a certain area, they're going to come clean about that, let you know up front, especially if
02:38you ask about it. So if you, you know, talk to a wealth manager or CPA or an accountant or, you know,
02:44somebody else that's an attorney and they, you know, you say, have you dealt with crypto before?
02:48Have you dealt with digital assets? And they say, well, you know, I have, but this, these are the
02:54circumstances, or I've been doing it for this many years, or these are the clients that I had, you
02:59know, there's attorney-client privilege and things, but they can kind of give you a gist of who they've
03:03dealt with and how much and, you know, dance around the topic of who it was with specifically.
03:09But you want to know that they are competent and capable and have dealt with it in the past,
03:12especially when you're interviewing. So that's just one of the considerations. And again, I would
03:17encourage you to start that early before prices move up. But if it's on the other side of it, those
03:22are the people that you're going to want on your team. The next step, and I encourage people to do
03:28this, is just think about a financial committee. Again, some of these advisors that I just spoke
03:34about may sit on that financial committee, but you may have other people in your network of people
03:40that you know that you might trust, right? And they also might have certain competencies. They might
03:45be a previous investment banker. They might have very high qualifications from their financial
03:51background. I would say that that's probably something better to have if it's on a financial
03:57committee. You get to set these standards, right, if you're setting up a family office.
04:00But I would set pretty high standards for people that sit on the financial committee and review
04:05and do due diligence on wherever you're going to be investing your money over the long term.
04:10The other piece of that is your family board council, and that's going to be made up of family
04:14members and maybe a few other strategic individuals in your network that could provide a lot of value
04:18and make sure that your interests or the family's interests stay top of mind with all these
04:25professionals over the long term. Well, one of the benefits here is, especially if you do come
04:31into a significant amount of wealth very quickly, is there may be some animosity between you,
04:37family members, friends that come knocking on your door asking for money. So if you have a
04:43financial committee that you've put in place, it could be three to five people that you trust to do
04:47due diligence on stuff or might have specific expertise in real estate or M&A transactions or
04:53financial markets as a whole. You just tell the individual that comes to ask you for money,
05:01whether it's your friend or family member, whoever it is. Sure, I would love to invest in whatever you
05:06have. If you could just put together a pro forma and some documents for due diligence, projections,
05:12financials, pitch deck, whatever else you have around this opportunity, I will make sure that it gets
05:18to, you know, our financial committee and they can review it. And if it's something we're interested
05:22in investing in, if it's within the thesis of where we're putting capital and it's within the parameters
05:27of how we're going to allocate that money, then we would love to make that allocation. Then you didn't
05:33say no, right? You gave them the opportunity to present their opportunity to your team and swing, swing
05:42for it. Sometimes they're, most of the time they're just going to drop the ball right there. They're not even
05:46going to put it together. They're going to go on about their business. They may still hold a little
05:51resentment toward you, but at the end of the day, it wasn't you. You had a system and a process in
05:55place and they didn't follow it, right? And then there's also going to be times where it is a really
06:00good opportunity and they do have all that collateral and it's passed to your team. They do
06:04due diligence and it's awesome. And you do make the investment in, or the loan or whatever it might be
06:10for the other party. But I think that that's, I don't want to say imperative, but a really,
06:16really good strategy to mitigate any potential conflicts that you're going to have with friends
06:21and family as those things do crop up. And they will. If, if you've told friends and family about
06:27your position in digital assets and they do really well, um, it's likely that, you know, some of them
06:34are going to show up asking for some things. Um, and then you get into the estate planning. You know,
06:41we talk a lot about them on the lives and other things that we do, uh, again, with the estate
06:46planners, there's a couple of different considerations here. There's a lot of different
06:50strategies when it comes to this. And I would encourage you to meet with your estate planner,
06:54uh, and find somebody that wants to work with your specific situation and details. Um, there's tons
07:01and tons of ways that you can structure it. There is no wrong way to set it up. Uh, I guess there are
07:06wrong ways to set it up depending on your constraints and how you want things to go. Uh, the three
07:11things that we look at when we're working to set something up for people is, uh, do you want to
07:17maximize your lifestyle? Do you want to maximize your legacy or do you want to maximize your, your
07:22giving or philanthropy? And you kind of pick which one of those you're leaning toward the overall,
07:29you know, estate planning process may involve all three, but there's going to be one true North
07:34star among those three that is your main focus and will guide how things are built out over the long
07:40term and where you start in that process. And that might be with a trust. It might be with an LLC.
07:45It might be with a foundation. It could be a charitable remainder trust. There's all kinds of
07:50things that you can do off the jump. We recommend that most people move their assets into an LLC first
07:55because that gives you the most flexibility on the other side of price appreciation to go any
07:59direction, set up insurance policies and get all of the breadth of the tax code to be able to offset
08:04any capital gains or profits that you might want to take. And so that's it. Those are just some of
08:09the main considerations that people have here in the short term, just three things that you might
08:14want to start thinking about before your assets do appreciate and value. If you got value from this,
08:20please like subscribe and we'll see you on the next one.