Unincorporated Business Trust?

savvypro · Jan 24, 2010

Came across the following site a while ago:
Code:
svpvril.com/ubo.html
The page sells a pack for setting up what they call a Unincorporated Business Organization Trust or UBO.

There is quite a bit of information on the site, some of the claims on the pack order page are:

Advantages of the UBO trust:
â€¢ A Pure Trust
â€¢ No yearly fee.
â€¢ Limited liability.
â€¢ Privacy - All officers or Board of Trustees do not have to be revealed.
â€¢ Your financial records are private and, under common law, require notification and a court order to be seen.
â€¢ Privacy in personal and business dealings
â€¢ Greater control over what you have acquired and accomplished.
â€¢ Reduced exposure from lawsuits and claims of adverse parties.
â€¢ Reduced liability when owning and operating high risk asset or performing high risk professional services, thereby saving money on high-priced insurance premiums.
â€¢ Increased profits via reducing business costs.
â€¢ Flexibility and creativity in personal and business planning.
â€¢ Simplicity of doing business in this increasingly complex society; including the buying and selling of big-ticket capital assets, businesses and real estate.
â€¢ Preserve and distribute assets at your sole discretion.
â€¢ Avoid probate and eliminate death taxes.
â€¢ Reduce or avoid federal and stateincome/franchise taxes.
â€¢ The trust may develop its own credit and investment program to provide security and protection for the beneficiaries at retirement.
â€¢ and more....
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On the page that the link above points to the following is stated.

The advantages of a business trust far exceed the benefits of a corporation.

ADVANTAGE No. 1. Because the corporation is created by the state as a privilege, corporate benefits may be diminished, limited or eliminated by the state government, whereas business trusts, or unincorporated business organizations (UBO) existence and operation are controlled by its contract, not by state corporation law.

ADVANTAGE No. 2. The state charges incorporation fees and ongoing annual fees. The UBO, as a privately created entity, does not have these expenses.

ADVANTAGE No. 3. A corporation (expect for a Subchapter S corporation that is taxed as a partnership) can be subject to double taxation (income taxes on corporate profits (unless zeroed out), then income taxes on dividends paid now or in the future from those profits to shareholders). In contrast, a UBO does not pay income taxes on its profits if it must distribute all of its net income to its beneficiaries - thereby escaping taxation as a simple trust.

ADVANTAGE No. 4. Likewise, capital gains taxes may be entirely avoided by a UBO that sells assets at a profit if the trust contract specifies that all net trust income is to be distributed annually to the certificate holders (beneficiaries) who will be the ones to report the capital gains as taxable income and pay any due taxes.

ADVANTAGE No. 5. Corporate officers and directors (and sometimes shareholder names) and financial dealings are a matter of public record and detailed annual reports. UBO affairs are private and not a matter of public record.

ADVANTAGE No. 6. The avoidance of probate administration is one major advantage of a UBO. If ones assets are all owned by one or more trusts, at ones death, there are no assets in the deceased persons name to go through probate. The trustees and successor beneficiaries continue the uninterrupted administration and benefit of the trust assets and income.

ADVANTAGE No. 7. Because the UBO assets do not go through probate, a UBO cannot be challenged by persons falsely claiming to be heirs or creditors of the deceased person.

ADVANTAGE No. 8. Assets can often be protected against creditors while beneficiaries are alive because the UBO holds legal title to the trust assets with the result that beneficiaries cannot have their shares of capital units attached by creditors if the trust has valid spendthrift clauses.

ADVANTAGE No. 9. Like the initial funding of a new corporation, there is no income or transfer (gift) tax to put initial assets into a business trust (structured to be like a corporation in the initial funding process) because the transferor of the assets receives back a proportionate share of the Certificates of capital Units.

ADVANTAGE No. 10. Whereas corporate stock owned by a stockholder is liable for death taxes (to the extent the value exceeds exemptions and deductions), the assets to a properly structured, funded and administered asset preservation trust will not be part of the grantor who originally funded the trust when the trustor/grantor dies.
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Anyone come across this before?

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Unincorporated Business Trust?

savvypro Regular Member

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Unincorporated Business Trust?

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