0:01 oh yeah yeah it takes it takes a minute for the streaming to get going so okay and okay well hello and welcome to trust and Estates weekly one of the way to wow shows I'm your host Kevin deml and we're here every Tuesday at 10: a.m. Pacific 1 p.m eastern time and I'm really excited to today to have a guest um on the show Von Marie Thomas um Von Marie uh
0:38 actually reached out to me I think um a few months ago and in addition to talking business we've also developed a very nice friendship um I mean that's always such a great um part of of the business world is is the friendships um that that you make along the way and um I don't want to sound like an old guy but you know you can you can look at her you can see Von Marie is a a young woman um ex extremely bright um extremely
1:16 accomplished um and and hails from you know one of my favorite cities um the Big Apple so that that's a plus two is we when we when we get when we meet we get to talk about you know things New York so um we're going to talk today about um accounting strategies with respect to trusts and Estates so for those of you tuning in who are are doing so because you're in your own estate planning uh process or you're considering your estate planning um I think you will find
1:52 this particularly relevant and for those of you who are tuning in because you're looking to build um an adjunct to your current business by being involved with trusts and Estates so this will give you I I think some insight into how you can do that so um Von Marie's practice does not only um entail trust in estates this is one of the Specialties that she has but her practice is of course broader than that which I think is also important from an accountant um when you're looking at estate planning if you're if it's just that sort of narrow
2:28 Focus that that problematic and and before before we started the show I was mentioning to Von Marie that um one of the I I think a lot of people consider estate planning to be a legal process so you have to drop a will well you go to a lawyer you have to drop a trust you go to a lawyer but the the reality is is is trust I mean estate planning is a financial process it has legal aspects that are part of it of course but the the real Crux of it is a
3:03 financial process and so um I encourage you to get your accountant involved or if you don't have an accountant by all means call Von Marie her contact information will be in the show notes um after the show posts um so you know without further Ado Von Marie welcome to trust and Estates weekly thanks very much for coming on the show thank you so much for having me Kevin and it's always great chatting with you I love talking all things business All Things New York food champagne grunch listen we can
3:38 cover a lot of topics here exactly so um do start out by telling us Ju Just a little bit about your background so people can understand you know who you are um kind of the you know the the scope of your practice and and you know the various professional involvements that you have absolutely absolutely so I am an advisor I am a franchise owner of breakaway bookkeeping and Advising and this franchise is based in Oregon so the
4:15 West Coast but I'm on the east coast and a lot of my work is remote so I'm happy to hop on a zoom call to keep track of all your documents electronically um to meet with your teams of other accountants or CPAs or um tax professionals or your lawyers as well to team up with them to provide the best service for what you're trying to do for your own goals and um something else I guess another detail about my background
4:51 I do have an audit background I I do come from Banking and insurance and public accounting and I studied it in college as well so I've worked in it for publicly traded companies as well so I do understand a lot of the reporting that has to go out to Who and the repercussions and the types of reports and how to work your way through those um different requests from the different parties right because there are there is different regulation for all of this and
5:28 it's important sometimes times people don't realize they have an LLC the LLC is is owned by the trust or something like that it's a normal occurrence to protect your assets but the LLC needs bookkeeping the trust needs bookkeeping you might need your own bookkeeping I know that a lot of um Bank apps allow you to see how you your money but aside from that how are you going to stand in in terms of of an audit right do you have all the documentation around
6:03 that to support you in the case of an audit and that's where my work comes in in terms of being the I guess the person you might not love but you'll love me but you you might not love the I know how anyone could not love you [Laughter] frankly that's just not a possibility so that's the the good thing is I I make it super easy to understand and and we'll we'll get through it it'll be an easy process fun I'll set you up on the different software I'll make sure
6:40 you have your financial reports whenever you need them whatever Cadence you need them in monthly weekly bi we bonly um annually and I'm happy to talk to anyone around you as well to you know make sure that you have what you need and if there's something you don't understand I'm also happy to break it down happy to you know take the fear out of it as well because it seems to a lot of people daunting and and heavy and a lot of these matters deal with family as well and that is also something that
7:15 tugs at my heart strings as well like I'm very family oriented and I'm always thinking about the people around me you know so I I keep that in my work as well so and I I I want to take a minute to just highlight a couple of things that you said that I think are so important one is you have a background um in banking and insurance right so these are such important components of um working on an estate plan um because both of them play Into the Heart of of um um maintaining
7:54 our wealth passing our wealth along to our heirs um and and the last thing that that you mentioned just now about you know being aware of the people right when all is said and done in a state plan well it's it's a financial plan in the end it is about people right um if if if we don't care about our our airs our family or whatever then we don't really need to bother with an estate plan so all the numbers and the insurance and everything that goes into it in in in in the end that's just a means to an end right exactly and also there's
8:30 you can also sign Charities up if you don't have direct heirs you can assign Charities to inherit your your estate your assets as well so that's another thing you could possibly set up um and I know a lot of people are also very much um into helping out animals and protecting them as well and there are plenty of Charities that do that kind of work that that would love to have the funds to be able to help more of them so
9:06 it it goes in any direction you might want it to go in so like the biggest thing is about being clear about the end result and and depicting that out and obviously once you're clear working backwards with the team of people like Kevin your fiduciary right in out of California and people like myself a CPA um a a lawyer uh that can help with all of that and create that reality so when you're working with uh you know a client
9:42 who um they're doing their estate planning or maybe they have a trust already or you know um that sort of thing what do you see as being let's say the um the three most important issues um that that they need to focus on or they need to consider um I mean you know out out of the range of I me there's always right a thousand things that that we need to deal with um I think we need to sort of Chunk them down so that we can keep our major Focus um on on the most important
10:19 ones so from from your perspective um um involved in accounting and and and bookkeeping what do you see as as like maybe the top three issu issues okay so the top three issues off the top of my head one the recordkeeping two the The Entity distribution between what is part of the trust what's not part of the trust What's um part of your LLC that you might also own so how to distinguish those things and break them out and account for them separately because they all need their own record
10:54 keeping and how to communicate that to your accountant um and then three is having a good team um that communicates with each other is super important which sometimes I've seen is happen sometimes I've seen it not happen and it makes a huge difference and when you introduce your assistant to your accountant to your lawyer and everyone knows each other and knows what their roles are and you're you're just better Ed like you
11:30 almost don't even have to think or be present and if questions come in to to that that vicinity that group of people everyone knows what to look out for and how to communicate that to you so you are covered from all angles and um I think those are the biggest things but I think in the recordkeeping a lot of people don't keep track of their receipts and if they do they live in their in Gmail somewhere or and and they were never really allocated to the proper entity or maybe if you do
12:07 have some kind of organization maybe you have a a credit card that is just for your business or just for your personal and that's a great place to start however there's more to it like you you'll want to have detailed reports because at that point it's hard to argue um if were in an audit what the the basis of that expense was for and that's a lot of what my work entails like being able to provide you with a paper trail even though we're not using paper anymore
12:44 every we're done with the paper save the Earth so curious to hear your thoughts about this so I know for my own personal finances I mean I have my credit card that I use for personal expenses I have a different one that I use for my business expenses and I have a I have a third one that I that um I use for a a rental property that I have and in that way um you know from a from a credit card standpoint right all of those um
13:20 are are separate and then I keep a a separate set of books if you will for each one of those as well so is would you say something like that is sufficient or does it need to go you know beyond that how how how would we you know how would we break that down I mean if it's simple enough that it can be tracked on an Excel sheet or something like that if if it doesn't ex if it's something that's trackable and manageable at that level good good job I
13:57 have to say because some people don't they co-mingle um different business transactions with other ones and then they they might feel scatterbrained or scared when the IRS comes knocking and then so you want to be able to separate that out so good job on doing that um if it's past the the level of being able to manage like on an Excel sheet it's best to get an accountant get get a bookkeeper or some somebody else to be
14:34 able to categorize the transactions that are occurring outside of the credit card because you might be invoicing uh for for a separate business you might need that set up you want to be able to track the income that came in through there as well because then there are expenses that get applied directly to that income and you might want further analysis on that business as well so outside of the trust space that's what you should look at but within the trust space you want to keep track of your your
15:09 distributions the interest that you've made on the different bank accounts or assets that you might have because those things get taxed under the trust and you also want to be able to apply any legal expenses that you've uh spent on a fiduciaries that you've paid anything in relation to administering the the trust you want to be able to report that and so something else I didn't mention is that the work that I do I know that
15:46 uh that trust in Estates all all those issues happen on a state byst state basis there are different laws around that but the federal filing is federal and it cover covers all 50 states therefore the accounting might not be different it's not going to be different like it goes to the IRS it's Federal like the reporting that I would technically do is Cookie Cutter depending on obviously like what assets are in there if you have commercial real estate or residential if it's making some kind of money then you're going to want to account for it in a detailed way
16:23 so okay yeah so so for each one of those entities it should have its own chart of accounts income expenses and and it should be um easy to to look at a financial statement then and determine you know what was the income what were the sources of the income what were the expenses to whom did they go and then what's the bottom line as well as generate potentially even a balance sheet for each of those entities as well is that is that correct yes a balance sheet and a distribution report so
16:59 the way that I would account for it I guess in accountant terms uh it would go on the equity as like owners draw or distributions that's where I put it when I'm accounting for these things I don't keep it on the on the income statement per se um because it doesn't mean the same thing like the the net income of the trust is it's is the trust is that income the distribution would flow through onto your personal tax return so obviously if you have questions and you
17:35 need details on that definitely reach out to a like a tax accountant that will get all the IRS details ironed out for you um but the work that I do will go to them and I will I will be able to distinguish what happens where and kind of get ahead of all of the questions that your tax accountant might ask you and you'll be better prepared that way but the distributions do flow through to the regular 1040 it'll go from the 1041 any distributions get reported and then
18:11 the beneficiaries or the people that have um obtain that that cash or any benefits will pay taxes on it in their own um tax bubble right right okay so you and your second one was um making sure that each entity um has its own um not just I guess not just its own set of Records but um um you know again like I have a separate bank account for my Corporation I have a you know um personal bank account um you know my
18:48 daughter has I have separate bank accounts for my daughter right um so and yet at at at some point there it seems to me there needs to be an aggregation or or not or is it is it literally are they all kept separate so how how do we deal with these sort of multiplicity of entities making sure that in the end we you know we can deal with them individually but we also have the overall picture so there is a way for a person
19:23 like myself to provide you with a Consolidated income statement or consolidated Financial reports you can ask for that or you can ask for the individual um entity financial statements so you might ask your account I guess this is important this is actually super important to communicate at the beginning of working with someone because the the amount of work it is to backtrack and and split things up into the different entities can be cumbersome however it's possible is
19:58 possible to do but it's best if you going in know that I guess you could probably follow the rule of knowing the different EIN numbers that apply to the different things you're working on right so your business is going to have its own EIN number which is the whatever taxable entity identification number that the IRS is going to have for your for for that entity so your bookkeeper would know to to capture things under the different EIN numbers and if there
20:33 are 25 bank accounts in one trust which I've seen you would want your you would want to know as as a bookkeeper and and as a as a trust owner a trust um grantour you would want to know what bank accounts belong to What entity as well and that would make a huge difference friend and kind of creating the reports later on as well okay um and and I I would assume
21:08 it's possible to do both um individual um reports on each entity but then also do a Consolidated for for the overall picture right yes yeah there's accounting software that does let I mean QuickBooks does it it allows you to be able to separate those things out um and that's what I really use to be to be completely honest I really like the level of customization because the amount of detail I need to be able to pull out of these
21:43 transactions is is very high so I do customize the the different subcategories the different like business and classes all of that is accounted for and super detailed because then by the time I'm going to to the reporting part of of my work I want most of the work to be done so the hard work is done at the beginning the end is just a click of a button and we have a report and then those reports go off to the CPA go off to your to you or whoever else
22:19 needs to be seeing that the charity that you might have as a beneficiary would need a copy as well because then they know their own know portion of what is what should be um for them right right signs of them okay and um I'm sorry refresh my memory on on on the third issue that you raised oh the third one was about keeping I think it was about keeping track of the receipts oh okay keeping track of the receipts so the there is software to be able to do that
22:55 and a lot of times I hear people are having their accounting done but then their receipts are in limbo right they're they're in a shoe box they're in a paper bag they're somewhere in a folder like let's get away from that um there's so much technology now and it's not expensive either um to be able to snap a picture of something or have it autof forward from your email into that software for it to just be captured is I think is super important as well
23:31 because otherwise the digging as a result of of being now frazzled from a letter that you receive is not the best way to deal with things sometimes it's the only way but if you can be proactive about it um that's something I do recommend So when you say receipts are you talking about cash receipts are you talking about credit card receipts both what okay scope of that because from my perspective I look at my credit cards and you know at the end of the month not the end of the month but I mean at the end of the billing period right I get a
24:06 statement it has all of the you know all of my charges for the month I you know go into quickin I tell it to you know update right it downloads all of them and then I go I just did this yesterday right I go through them all and make sure that they're all properly you know coded um in terms of C categorization um but where and and you're you're telling me this is reminding me where that falls apart is in any kind of cash receipt no it's it's it's not getting
24:41 into my books anywhere ah yeah so you would probably have to enter those manually um I know that there's regulation coming out regarding like how like at what point do you start to report this and I think it's the $600 rule um with the IRS about reporting income or payments out from any particular entity but with the receipts do you attach the receipts to the
25:17 transactions or is it just you knowing where you spent it and then the categorization of it but there's no attachment right well right so with my credit cards I mean like if you looked at my waist basket you would see all my credit card you know rece once once I verify you know the amount and that it came through so then I throw the receipt away um and I and I SN my books um with the idea that if I ever had to prove an expense I would you know go back on the credit card's website and I can download you know a copy of the receipt there um
25:55 I mean I guess I've been lucky I I've never been audited I've had clients you know who who were audited um and that you know that I was doing work for in one one shape or one form or another um but um I haven't like copied my receipts and and attach them to anything um I don't know should should I be so there something about what you're telling me I guess now I'm understanding that different words mean one word might mean different things to different
26:31 people so when I talk about a receipt I talk about like a Resturant receipt things like that what you're talking about to me means a bank statement a credit card statement and the statement will contain all the details of the transaction but it won't like it's not the detail it's not the whole detail so the whole detail would be on the receipt on the actual like restaurant style receipt so it's an individual Trans on an individual transaction
27:08 basis so okay yeah and those so those actually should be retained is what you're saying yes I what what kind of actually we're coming up on our our time here because we oh we are so what um what what kind of software um do you recommend for you know dealing with those receipts so you can use any accounting software to be able to do that between QuickBook zero fresh books um you can use uh something called
27:45 Dex you can use Hub Hub do I think it's called things like that those all can uh support detailed recordkeeping and receipt um capture or receipt like attachment to the transaction so okay that would be helpful yeah I mean it it particularly hits home in talk when you when you said restaurant receipts yeah because they're going to want to see you know was there alcohol what was the tip right all of that what was all of that is is part
28:20 of you know and audit I it's funny the things that you say that create memories I I remember remember um one of my first jobs I worked for a lawyer and he got specifically audited on his entertainment expenses and my mother was his bookkeeper at the time and I mean it was just an enormous task and this is going back a lot of years this is going back more than 30 years ago but it was an enormous task to put together the documentation to you know sustain all these entertainment deductions um so so
28:58 and that's when he started I I think that's when they started actually you know keeping um you know Rec all all the individual records so this this is before you know computers and all that kind of stuff so um but yeah it can be a huge huge problem wow we're we're out of time already the it goes swiftly um and and and what I really appreciated is is that you were willing to sort get down into the Weeds on this because I think sometimes we stay a little bit to surface and people really need to
29:36 understand um the the details of this and how important it is to put these systems in place from the beginning um so you're not having to go back and and and and recreate um I I I know there's much more that you could could teach us so we'll we'll have to have you back um on again and and we'll we'll talk about um some of the other uh strategies that that you've got to you know make our lives easier when it comes to trust and Estates but um Von R thank you so much for for coming on the show today um it it's always just it's so
30:14 much fun talking with you you can see M blushing a little bit you know so funny but you know before sign off I mean kind of any any oh um oh we got a comment here uh oh okay that that she said very cool interview so um before we sign off um any any questions we've got a couple of um a couple of uh folks uh joining us any any quick questions for Von Marie we we can go on for an extra few minutes um you know
30:50 before we sign off if if you have if you have something you want to ask her so yeah hi clarabell hello hi there I loved it I just didn't want to take attention away from the highlighted folks um I was curious I know that you went through the different platforms to be able to record the receipts but I didn't get all of them would you mind repeating them yeah so I said freshbooks QuickBooks zero with an X at the beginning is X eer um Dex was another one so I said
31:25 zero Dex QuickBooks hob do was the other one um so that one is Hu b d o c that's do okay do perfect thank you so much you're welcome excellent well thanks thanks clarabel for for um taking the time to clarify that appreciate it so um you know kind of last last thoughts before we uh sign off on Marie well last thoughts I'm I'm really happy to talk to anyone and that that
32:02 has questions about this accounting process for their trust or newly formed trust the implications I'm happy to introduce you to anyone that might make a difference in your journey as well um but other than that I'm usually it can be found either on LinkedIn or my favorite platform right now is Instagram I'm posting there I just got back from a conference fincon and there's pictures there about all the food and the dinner and the fun but it's I also use it for informational purposes as well so I keep the fun high and the education high as
32:38 well so you can find me at Von Marie Breakaway Orba so yeah I'd love to chat otherwise thank you so um I'll make sure that um there are links to both your LinkedIn profile and your Instagram account in the show notes so that folks want to get a hold of you they can and but I'm glad you mentioned your Instagram because I did see your posts recently um and there there was lots of great uh tips on on how to deal with these you know various bookkeeping accounting issues so so uh I
33:14 I am one of your newest followers um thank [Music] youin every morning I check my feed well well um again Von Marie thank than you very much for for coming on the show I I so appreciate it um clarabel Dario also thanks for joining us live it's it's always a treat um to have folks with us in the meeting and I appreciate you tuning in and for all of you you know out there in social media land thank you very much for tuning in we do appreciate it um just real quickly coming up
33:49 tomorrow at 11:00 a.m uh Pacific time is uh business lessons from the military and we're going to be continuing our discussion of Marine Corps Warf fighting Doctrine on intelligence that's spy versus spy type intelligence and how we can apply those Concepts to to our our professional Pursuits to the business world and then on uh Wednesday at 12:30 pm is people making money and we it's G to actually be a nice takeoff um on today's discussion Von Marie because I'm
34:24 going to talk about sort of basics of um Financial reports so we we we're to talk about income and expense reports um uh a balance sheet so people have a sense of really what those are because I think we may have heard those terms but we're not really sure what's involved in these and they're really the basis of any kind of financial or estate plan is is being able to have you know that that picture that comes from those reports so um we're going to talk about that on Wednesday and then of course seven days from today at 10: a.m. uh Pacific time
34:59 we'll be back again for the next edition of um trust and Estates weekly so what is oh cool great um uh so again um to everyone thank you very much for joining us wishing you a wonderful rest of the day V Marie I'm gonna ask you to hang on and don't click off I'm going to go ahead and take us take us down in a second um but uh wishing you all a wonderful rest of the day and signing off as I always do recognizing my dear friend Marie up in heaven you are and ever will
35:35 be my bell so take care and hope to see you again soon this week