E183: Chad Ettmueller and Monty Walker Discusses Structured Installment Sales and Annuity Products

[00:00:00] Ronald Skelton: Oh, and welcome to How2Exit Podcast. Today, I'm here with Chad Ettmueller and Monty Walker. They are with JCR Settlements. We're going to talk about structured, uh, payments and structured, uh, I guess it's a annuity based product. So structured installment sales, structured installment sales.

So basically how to save money when you sell your business through, ways that can defer taxes and, to make sure you have an income longterm. So I appreciate having you here. 

[00:00:25] Chad Ettmueller: Well, thank you, Ron, for having us. We appreciate the opportunity.

[00:00:29] Ronald Skelton: So, let's just start off with a little bit of origin of the story.

Who are the, you know, kind of introduce, each of you to introduce yourselves, and then we're going to introduce, who JCR Settlements is. And then we'll get into the video. 

[00:00:40] Chad Ettmueller: Yeah, Monty, go ahead. 

[00:00:41] Monty Walker: I'm, uh, Monty Walker. I'm based, I am based in Texas. I'm a CPA for a formal background. I practice nationally. Primarily in supporting the M&A industry. Dealing with business ownership, transitioning.

So my sandbox that I'm in every day is helping entrepreneurs try to determine how to keep more of the funds when they go to sell their company, as opposed to giving it to the government. 

[00:01:06] Ronald Skelton: Awesome. And Chad, tell us about yourself a little bit. 

[00:01:08] Chad Ettmueller: Yeah. So my name is Chad Ettmueller I'm with JCR Settlements. We are a settlement planning firm.

We're based in Scottsdale, Arizona. Although I office half of the year out of,Georgia and half of the year out of Michigan. But uh, we offer a structured installment sale product that we're going to talk about today, which was built on the 50 year chassis and 50 year history of the structured settlement industry.

So we, we may seemingly start in an area where your viewers are going to go, what are, what is this, uh, that we're talking about, but it'll make a lot of sense once we work through it a little bit. 

[00:01:45] Ronald Skelton: I think so. And what we're talking about is, um, making more money when they exit, and in a very unique way.

So I was telling Monty before you were able to come on, this has been shown to me once before, like it's a week I got into this space. So,got into this space, came out of the real estate world, got into this space, was going to all the business network, B and I's a business network and stuff going. Looking for CPAs and stuff who knew a lot of business owners.

Hey, if anybody's ready to retire, I've got a group of people. We've raised some money. We want to buy a company. And one of the guys pulled me aside and he showed me this, structured settlement kind of installment through a annuity insurance product. Where the owner could put money in it, get paid over time, earn. I think he even said like a, like they have to structure was like pretty much guaranteed a certain amount, because the security probably wasn't a guarantee, but it was like 8 percent was like the minimum they'd ever seen.

I seen your sheet has its own. But um, it went over my head. I was telling Monty just kind of went, I was like, okay, that's a little more convoluted or,the way he explained it, like I can't explain that to a business owner if I just meet him. So my goal was is if we had one that met the criteria he outlined, I would just bring him in and show it.

So hopefully today what we're going to do is we're going to, you guys are going to teach me. That's what I do on the show. I do this show because I want to learn different things about the industry. And then we share it with everybody in the industry because I'm sure they want to learn the same things I want to learn.

So let's start off with, what is it? What is this product that you guys have? 

[00:03:07] Chad Ettmueller: Yeah. So in order to tell you what it is, I'm going to go back a little bit further and, I mentioned that I'm a settlement planner. My firm, traditionally we are working with individuals who have been catastrophically injured.

Maybe family members who have lost a loved one to a tragic event. And we will help those individuals settle their litigation. And then we invest their settlement into fixed or indexed annuity products. Where they can design a future payment schedule that meets their unique needs. We kind of take the financial stress away from them about how they're going to meet the mortgage payment.

How they're going to pay for their health insurance and their future medical needs. How they're going to go on that family vacation,with diminished earnings and such. And, And so,you can appreciate we were talking earlier about some, some, friends of yours who had endured traumatic injuries, right?

It's life changing. And so we're there to help them secure peace of mind through the annuity investment, uh, structures. So the same life insurance companies, Ronald, with whom we placed those structured settlements, have jumped into the real estate and business sales, space,under section 453 of the internal revenue code, which deals with installment sales.

They are now offering those same annuity products that I was just talking about that we use for injured parties in their litigation. Now an individual who is selling their property or their business can defer their immediate capital gains tax obligation by placing a portion of their sales transaction into one of these annuity products.

And, really the name of the game is constructive receipt. Uh, the IRS can't tax a seller on what he or she doesn't take receipt of at the time of sale. So the key to this whole structured installment sale transaction is allowing the individual to define the amount that they want to place into the annuity.

And then we assure that money goes directly from the escrow account to the life insurance company with whom that annuity is placed. IRS can't tax them on that portion, but the IRS will eventually tax them. And they're going to tax them in the future year or years when those annuity payments are received.

The best part about it there, Ronald, is they can design the payment schedule in any manner that they would like. They can defer their first payment for up to 40 years if they wanted to. And by doing that, they're, of course, deferring their tax obligation for that period of time. And then they'll pay a two fold tax obligation in the future years that they receive the payments.

There will be a prorated capital gains tax obligation, and then a prorated ordinary income tax obligation on the amounts received in that given future calendar year. 

[00:05:52] Ronald Skelton: That's what I was going to ask. Is it,ordinary income or capital gains at the end? So it's a prorated of both. So I guess the prorated capital gains would be based on, a basis of what they, at the point of time, what was sold at.

And then I guess it would be capital gains on anything that, that, and that increased upon the time that it was held in the annuity and making money? Or how does that work? 

[00:06:13] Monty Walker: Now, when the, when the asset or assets, of course, when, as you're quite aware, Ronald, when you're selling a company, there's multiple assets.

So the tax people have to deal with the gains that are coming from each of the respective assets. So, what we're dealing with this topic today, and specifically, Code Section 453, which is your installment,or installment method provisions, we are dealing with the actual capital gain that comes out of a transaction, that would not be subject to any form of ordinary income tax treatment. That would happen with a piece of equipment, as an example.

So, equipment, uh, subject to depreciation. Depreciation recapture is the term that's associated with any gain that comes back in from prior depreciation that would not be included as an example. But any gain that would happen that truly is subject to treatment as a capital gain, that's what applies here.

And so that amount of money in this particular strategy can be deferred. It would not be recognized at this point in time. It would be deferred. And because it's deferred, then that money is used to compound and grow and in the future, when funds are paid out underneath this, solution, at that point, whatever portion is being paid out in an annual year that gets taxed. And it gets taxed at capital gain rate or the gain deferral in any income that's associated with the investment process that we're talking about here.

Of course, that's an ordinary item because that's an income growth item, but the gain itself is going to be subject to capital gain and taxed at the rates in place at the time of the payments, when they occur in the future. 

[00:07:59] Ronald Skelton: Okay. So how does this work inside of a business? So I get it on a structured settlement, right?

I get it on like, you know, I get a lawsuit and they give us a judgment. I reach out to a company like you and the judgment goes straight into the annuity product, right? The insurance product. And then, we structure what payment should look like. Instead of a business sale transaction, there are two different ways they can be sold, right?

You buy the corporation. You can do the, uh, buy the, S corp, or you can do an asset transfer, the asset sale. The most people want to do the asset sale because it helps mitigate the potential liabilities of the company. You're not buying the actual corporation, you're buying the assets of it. Including the brand, and you'll, probably end up dissolving that LLC or C Corp and setting up your own. So you're not carrying the liabilities for it.

So what does it look like along that, I'm thinking about the value, so I know when we do the evaluation, and at the end of the day there's a check. I guess, uh, the, the attorneys and the, CPAs figure out what portion of that check goes where, right? . So the, I guess the question is how does it go from, in this case what you were just were described was the asset sale.

How does it go from there to the, uh, the insurance product? 

[00:09:14] Monty Walker: Okay, Ronald. Uh, as we, you've brought, you've opened up a wide spectrum of, of response options.

Okay. So, when, when dealing with a transaction, you've referenced LLC. Mm hmm. You've thrown out S Corp. You've thrown out C Corp. And so there are some fundamentals that are consistent between each, but each entity then has its own application in terms of what happens in a business transaction, right?

So let's just talk about the fundamental component. And then we can back up and address anything specific to an entity. That way, we don't get, we don't have any confusion in just the general response. So when, when dealing with a business transaction, if it happens, and I want to reference both asset and equity, okay, just broadly. So in a business transaction, if there is a asset transaction that is occurring, you're, you will have a, some certain that's been agreed upon between the parties. Whatever that price is. And we're not going to get complex here to say that they have future earn outs, and we're going to just, they've come up with an agreed upon price. Period. 

Now, with that price, there will be a cash component. And it's not uncommon that there would be some seller financing, oKay? But let's just go from the premise that we have a full cash deal. They have a plenty of money and or bank financing, but they've got a cash offer on the table. At that juncture with that cash coming in, that seller, the owner of the business entity, the seller can make a decision on how much of that incoming cash, they ultimately would take possession. They can choose how much then would not be taken in possession and it would be handled through the structuring. When that choice is made, once again from the premise, we have an all cash deal.

And if the choice is made by the seller, that the seller says, I would like 75 percent of the total transaction proceeds to be structured through this process. What will happen at that point is, there will be some paperwork and Chad will talk about thaT. There will be some documents and paperwork that will be attended to their existing contract. Not a brand new contract. But some paperwork attended to their existing contract.

And then that portion of the funds that are associated with the choice that the seller has made to structure, those, that portion of funds will never make its way directly to the seller. So we have no, we have no receipt. Uh, we, what we actually have is a process called, uh, referring to as a substitute obligor that steps in, and Chad can expand on that. But the, so there's an obligor that's in place to make payments under this arrangement because this, when that 75%, in my example, becomes structured, what's really happening is the seller says, I'm going to enter into an installment arrangement with that buyer for that 75, and buyer, you won't give me the money that you have available.

You will make, you will transfer that appropriately through the mechanism, to the settlement group, and then that settlement group will take responsibility for making payment under that arrangement in the future. That's the settlement. Now that, is in an asset transaction or in a equity transaction, that process is the same. Okay. Either in an equity deal or in an asset deal, that's the same. 

So what we can do if it's good with you, Chad can expand on. Okay. Now that the 75 percent is handed over and is happening. How does that flow? Then Ronald, what we can do is expand as deep as you want. Coming back to the entity types, the equity or our asset. And I think for you, that's probably going to be helpful to dig a little deep. To understand mechanics.

But at this top level, now we go at 75%, whether it's an equity or a asset transaction. We've now got an installment arrangement that's in place for the 75. The money's will not reach the seller. They in turn are moving over to the structuring side. And so Chad would step in now and give the explanation.

[00:13:34] Chad Ettmueller: Yeah. And so Ronald, what we would do is, ideally, we want to work with the seller a couple of weeks to a month in advance of their actual closing. Last thing anybody wants to do is show up at the closing table in spring, a section 453 installment sale on everybody. That's the surest way to kill a deal.

Um, so we want to work with the seller well in advance of their date of closing. And we'll help them to Monty's point, they've already identified that they want to take 75 percent of their transaction and defer their capital gains obligation on that, by placing it into a structured installment sale.

So at this point we have a couple options. We've got fixed annuity products, through met life or independent life. Or we have an index linked annuity option through Independent Life, in partnership with Franklin Templeton Advisors and Bank of America. Um, the index is actually the Franklin Bank of America Global Index.

So it's taking not only the best of what the American market has to offer, but also the Asian and European markets. And so we'll talk through the merits. of the fixed annuity. And we'll show illustrations associated with that. The yields on the fixed annuity product are around 4 to 4. 5%. Not bad, not great.

Better than they were back in 2006, 2007 when we were doing this with, with 2 percent yields. The index returns or as high as 12%. And so that's pretty significant. That's a game changer. But we'll help them design a payment schedule that meets their unique needs and the needs of their families. And to give you a quick example, I had a gentleman in Florida who sold his business and adjacent property for $25 million.

At the closing table, he took $10 million and put it into an indexed annuity product. At closing he, he funneled the 10 million through escrow to independent life. By doing that, Ronald, he saved 1. 2 million roughly in immediate tax obligation. So that was his first victory for which he was very excited.

But he's 51 years old and he said, I don't want to take, any payment until my age 65. So we did that. We defer, we are deferring in the process of deferring his first payment for 14 years. He's not going to pay a penny's tax on that $10 million for 14 years, and it's just going to sit there and accumulate interest, right?

Einstein said, the second most powerful force in the universe is compounding interest. And you're going to see why here in this example. And so this gentleman then said, I'm going to take monthly payments from age 65 to 85. And we project that through the performance of that index, we're going to turn his 10 million into between 64 and $130 million.

So his $25 million transaction just became potentially a $150 million transaction. The best part of all of this is there are no fees associated with this to any party. I get paid, as the settlement planner and the broker. I get paid a one time commission by the life insurance company. I don't get a trailing commission, and, so I get paid once at closing, uh, based on the amount that's invested. There are no fees to, to any party. And then, his question, the obvious question is, well, what happens if I pass away? 

Well, the named beneficiaries will receive all remaining guaranteed payments. And they'll pay the same tax obligation that the seller would have paid. There's no additional estate tax, no additional inheritance tax associated with it. And so this gentleman had a three year old and a five year old, and he was excited that he saved the 1. 2 million in immediate taxes, but more excited that should he pass away, he'd passed on generational wealth to his daughters. 

[00:17:20] Ronald Skelton: So now it's, uh, they get the structured payments the same way, or is there an option for them to get some type of lump sum? 

[00:17:27] Chad Ettmueller: Yeah, that's a great question. So the payment schedule, because it's incorporated as an addendum to the sales contract, remains intact.

With some annuity contracts, you can commute those payments. I can tell you one of the life companies considering commutation and trying to discern how they can do that within the confines of, Section 453. But right now, you have to be very thoughtful in the payment design and schedule because it can't be changed.

So if somebody finds 10 years down the road that they have need for liquidity, they can't accelerate the annuity payments. But what they can do is take that annuity contract to their local banking institution and secure a personal loan using that annuity contract as collateral. 

[00:18:09] Ronald Skelton: That's what I was going to ask. Cause a lot of these annuity products actually can act as a personal bank to where you can borrow money against your own annuity with, inside of the annuity structure. Is that something that this, these things do, or is that a, that's a totally different product? 

[00:18:22] Chad Ettmueller: Yeah, no, you can't do that. And I'll let Monty discuss the tax reasons for that.

But in short, uh, once the annuity payment schedule is defined. And the premium has been paid to the life company to fund those future periodic payments. And because it's part of the actual sales transaction that both parties signed off on, it can't be changed.

[00:18:45] Ronald Skelton: Okay. So I take it to one of the products i'm thinking about that acts like private banks, it's because it's a post tax dollars instead of pre tax dollars.

[00:18:53] Chad Ettmueller: Exactly. 

[00:18:54] Ronald Skelton: That's why they can do that. Okay. I'm gonna kind of switch gears on you just slightly a little bit here. We talked about lump sum where the buyer comes in and before we do that, you said that might disrupt the buyer. In my mind when you guys put this in place the only thing that changes in the buyer's world is the wiring instructions, right?

The buyers attorney, you know, he wires the money the buyers attorney or the attorneys dealing the deal, kind of as escrow. And the wiring instructions goes from the seller's wire to your wire as opposed to, so from a buyer's perspective, I don't see how that disrupts anything I would be doing as an act, as acquiring a company.

[00:19:29] Chad Ettmueller: Yeah, it doesn't. Now the buyer is going to sign a non qualified assignment agreement, right? And that's an important document for the buyer because it transfers the future payment annuity payment obligations to the life insurance company with whom that annuity has been placed. So not only is there an addendum to the sales contract or the purchase agreement that details, that a portion of these funds, in accordance with Section 453 are going to be placed into a structured installment sale, but there's also a non qualified assignment that says all of the obligation to make those future payments is now resting with either Met Life or Independent Life as the two life markets that are offering this product. 

[00:20:13] Ronald Skelton: I don't know which one of you can answer this but the the second question I have is, what happens when, it's not just a cash deal, right? Where I come in, you want $10 million dollars for your business. You agree to take you know half of it through an SBA loan and the other half you're going to do through some type of structured payment from the buyer. 

Can that be put in that annuity too where the buyer's paying a structured settlement into in it? Is it a one time stuffed money into it? Or can you build on it? Like the uh, meaning that, can my payment is like, let's put me in the shoes of the buyer. I'm buying the company. I take a five million, a ten million dollar company.

I take five million from SBA. I agree with the seller that I'm going to pay them certain amount for the next, say 15 years. Can those payments also contribute to your product where I'm paying you as opposed to him? 

[00:20:58] Chad Ettmueller: It cannot. So we can only work with the cash that is available at the closing table. And again, that's because there's an addendum to the sales contract that defines that future periodic payment schedule. And there's no way for us to know that if the buyer is making an installment payment two years from now, there's no way for us to define what those parameters are going to be or what the payment amounts are going to be, two years into the future.

So we can only work with the amount of cash that is available on the day of closing. 

[00:21:31] Ronald Skelton: Okay. That makes sense. So, what does it look like as far as sending something like this up? Why would a seller want to do it or versus not want to do it? What would be the, the like decision making process for, if I'm the seller, why would I want to talk to you guys?

[00:21:47] Chad Ettmueller: Yeah, well, the illustration we just discussed with my client in Florida, right? There's two advantages there. He not only saved 1. 2 million in immediate tax allegation and spread that out over a 34 year time period. That's the first reason any seller would want to consider this. The second reason is that it allows them to truly maximize their net sale proceeds.

His $25 million transaction just became a hundred to $150 million transaction when the annuity payments are finalized. You know, these business owners have put their blood, sweat and tears into building their company, and they now have an opportunity to sell it. It's going to be, for many of them, their one opportunity to cash in.

And this offers an opportunity to not only defer taxes in accordance with Section 453, but to really amplify their sales proceeds. And design a payment schedule that meets the unique needs of either them individually or their family. And if done correctly, it can really generate and provide for generational wealth. And from a tax perspective, I'm sure Monty has some other, advantages that he would advise his clients on.

[00:23:00] Ronald Skelton: So from a tax advantage, you're deferring taxes and, I guess the theory out there or the, uh, hindsight is taxes rarely go down, they always go up. Do the potential seller have a potential of paying higher taxes on, per dollar on that deferred? Or, what's the risk exposure from deferring the taxes on an annuity like this?

[00:23:25] Chad Ettmueller: Yeah. So I think, Ronald, the capital gains rate is at the year where the future payments are received. It's not the cap gains rate in the year of sale. So in our previous example, my, my client, my Florida client, he's selling in 2023. But he's not going to receive payments for 14 years. And so,to your point, we don't have a, we don't have that crystal ball.

We don't know what the tax hit is going to be. So there is some risk that the cap gains is going to be slightly higher than it is in the year of sale, but I think that's offset by the fact that you've deferred and spread the tax obligation out over a longer period of time. And it's further offset by the fact that you're amplifying the net sales proceeds through the growth of the investment.

And so you have an opportunity to really, unfortunately, we don't have that crystal ball. We don't know what that cap gains tax, it is going to be in the future year that is a risk. But I think it's a calculated risk and it's one worth taking when you counterbalance that against the earnings that you're going to receive through the investment annuity.

[00:24:37] Ronald Skelton: There's the other side of that estate planning side of this, right? Where, a lot of business owners, they're selling because they know they have a health risk. They know they have something going on in their life. They want to spend more time with their family. The fact that this goes to the kids in a structured way, is a big risk. 

I've talked to hundreds of business owners at this point. And one of the things is, is like,a lot of times I do a lot of off market reach out. And a lot of times, like, I don't,I don't need the money. I don't know why I would want to sell. And I damn sure don't want to give my kids the money right now.

They're not very good with money. So the first thing I always say is, well, we can set up, I've got attorneys that'll set up a trust for you. And we'll put the money in that and then get it structured. This would be another way to say, Hey, look, you're worried about the kids just blowing the money. We can put it in something where they get it over 30 years, right? 

[00:25:19] Chad Ettmueller: Yeah, exactly. And there's no reason why the annuity payments Ronald, couldn't be made to a trust, right? And Monty will have some, some opinion on that. I mean, we have to set it up correctly and,but it can be further insulated and protected,from being squandered. 

But it's, it's a tax smart strategy at the end of the day that allows folks to uniquely design and prepare for their future. And to your point, unfortunately, as we age, we don't get in better health. We find ourselves in failing health. And so if design properly, you can really make certain that you've got some hefty monthly income or annual income coming in the door in your eighties or 90.

So that God forbid you find yourself in a situation where you need assisted living care, you have the financial wherewithal to pay for that and live your final years with dignity rather than being shoved in a nursing home somewhere. 

[00:26:13] Ronald Skelton: I think that's my way to go. I think I, when it's time for me to be in a rest home, I want to be stuck on a cruise ship somewhere and, uh, have enough money that, my kids don't have to say anything. But I'm kind of one of those guys too. I've got a, my, my children are 12 about to be 13 and, seven about to be 8.

And, the girl so far, my youngest, she's probably more on the lines of, at eight years old, it's hard to tell, but at this stage in life, she's extremely intelligent and very, good with money. My 12 year old, I don't care if it's $20 million. It would be gone in a week. He'd buy a video game empire.

I could see where one structured, you know, structured for myself and the family. Now, I'm going to get into something that keeps coming in my mind. Is it just off the beneficiaries or is it like most insurance policies where it's per where it's per bloodline? So, can I, if something happens to me and I have it, my beneficiary is my wife. the secondary beneficiary, or when you call it successor beneficiary is my kids.

If something happens, we're all in a car wreck, is it still going to be per stirpes? Does that money go somewhere? 

[00:27:11] Chad Ettmueller: It goes to whomever, you can name a lineage of beneficiaries as deep as you would like. And then God forbid you pass away and your wife assumes the payments as your primary beneficiary.

She will then name her own beneficiaries and again she can create a lineage as deep as she would like Ronald and it can be beyond bloodlines, right? It can be uh, you can name a local non profit organization or religious, group that she wants to be the beneficiaries. And you can assign different percentages to various different beneficiaries as well.

There's no, no limitations on that now. God forbid you pass away with no contingency plan and no named beneficiaries, well, that's going to go into probate and the probate judge is going to determine where the balance of the remaining payments goes.

[00:27:59] Ronald Skelton: Okay. The answer, the question and the fact that the future beneficiary gets to define their beneficiaries for the remainder of that, because that's a structured payment. X number of dollars for X number of years, right?

[00:28:09] Chad Ettmueller: Correct. And again, if I didn't mention this before I want to mention it again now, there's no additional estate or inheritance tax associated with that. The beneficiaries will pay the same prorated cap gains and prorated ordinary income. Tax obligation that the seller would have paid because it's all defined in the corpus event, which is the sales contract and addendum and in sales transaction of either the business or property. 

[00:28:36] Monty Walker: And that's called the income irrespective of decedent. 

[00:28:39] Ronald Skelton: Now, I've got one, the SBA is currently like there's rumor flying yesterday and the day before they just changed how they do transactions with real estate attached. Whether the real estate's got 51 percent of the value or less or it changes the rules now. And I'm still looking for somebody to clarify it because there's work we're throwing a Twitter chat around. This is November, 15th when we recorded that. Yesterday there was some statement things of something went in effect yesterday, it changed that. 

That said, if it's two different transactions, I'm buying a business with real estate, can I shove both those transactions into the, like,my real estate proceeds and my business proceeds into the same structured annuity? Is that, or is that two different events? 

[00:29:23] Monty Walker: In dealing with the, in dealing with the question associated with the real estate. Okay. And since you brought up SBA. SBA has a process for business owners where they have a structure called an EPCOC.

Not trying to get overly complicated, but the SBA, it's a direct correlation to SBA. EPC is an eligible passive company. OC is the operating company. Very common in business structuring where the operating entity will be separate. Real estate will be in its own company. Then they'll lease the real estate back.

I'm going from the premise that's associated with how your question is coming, because that's the most common thing that you'll see. What you actually have in that scenario is you have two different sellers. Two completely different sellers, right? 

[00:30:10] Ronald Skelton: Technically, yeah. Yup.

[00:30:11] Monty Walker: The OC, now you may have a group and they're recognized together and under common control, all those things, but you have two different sellers.

So this comes back to the premise of your point shortly ago before I froze out, and that was the buyer is not affected by this. It seems like, well, yes and no. The buyer is not affected by the outcome that the buyer has in front of the buyer. The buyer is still going to buy the business. The outcome is going to be the same.

They're going to own, the buyer's, going to own the asset, but the buyer does have to agree to an installment provision addendum that's coming to bear here. So all of a sudden the buyer is agreeing that I've got cash, I am paying for this whole thing, but the buyer is executing a documents that essentially is changing a component of this into an installment provision.

And that's how come we can structure this into the future. So, if there is all cash, that's all cash. But if it's anything other than just all cash, there must be something else happening. And so the buyer is entering into an agreement with the seller to essentially have an installment provision now in place.

And the buyer is bringing cash that, as opposed to being handed to the seller, will be handed over to the installment, I mean to the settlement group to handle the installment payments under that new addendum that's been added. So, if we come back to your premise now and say, Mr. Buyer, you're buying real estate and you're buying a business. The issue is, who's the seller?

If it's an asset transaction, the real estate holding entity is the seller, and the entity holding the business is a seller. Now we have installment notes in place with each, and we're going to have an annuity solution that meets the installment note obligation each because we have separate sellers.

And same thing would not necessarily be true if it were equity, because now we could possibly have a one seller person. So now we have multiple assets from one person, so we could have a common annuity solution there, but separate sellers, each has to have their own. 

[00:32:26] Ronald Skelton: So in scenario one, we would use one product or two product from chat? 

[00:32:30] Monty Walker: In scenario one with two. E. P. C. O. C. Top environment with the S. B. A. Operating company separate, we would have two. 

[00:32:38] Ronald Skelton: So we basically have two of these annuities, two different, like two sets of documents, two structured things. Payments would add up. The end result, the seller would get a check or two that would equal to what he needs to live on.

The difference is, is the way the product would be structured. And then the option two is, it could be potentially, it's just all in one because it's a one seller. That makes sense. So, uh. 

[00:33:02] Chad Ettmueller: Yeah, and, and Ronald, that should mention it's not uncommon for sellers to take, whatever portion they've determined is going to go into the installment sale and place part of that with MetLife and have a fixed annuity design in place and place part of it with Independent Life and have an indexed annuity in place. So that they have multiple investments and they've diversified across different financial platforms as well. So it's not an all or nothing scenario, for the seller. 

[00:33:31] Ronald Skelton: Is that, I was about to ask that question. Is it a one and done thing? You're like, can I, is it certain things in the tax code you can do one of these, right? You can only do X, or you can only put so much in per year or one of those types of things. So potentially, 

[00:33:43] Chad Ettmueller: There is an interest penalty on the sale of a business if a seller is looking to place more than five million dollars into a structured installment sale. There's an interest penalty in short, and Monty, please correct me where I'm, I'm, I'm misspeaking. I'm not the tax professional Monty is, so I want to make sure I, I don't, uh, step on his toes.

But, there is an interest penalty. There's a formula for us to determine what that interest penalty is. And one of the strategies that many of our sellers are deploying to address that, if they want to put in more than $5 million is we just determine what that interest penalty is. And we set up a lump sum to be paid every January 15th, in that amount that they use to make their interest payment, interest penalty payment, but they continue to enjoy a deferral of over $5 million. There is an exception. If you are selling farmland or land or acreage that could be used in the future for farming purposes. There is no cap. There's no $5 million cap.

So you could put, if you had a $200 million sale, you could put as much of that into the structure as you'd like. And Monty, please correct me where I may have misspoke. 

[00:34:58] Monty Walker: No, and that's accurate. Now you're, Ronald, this comes back to your LLC, S Corp, C Corp, the dynamics begin to change because you have taxation for S Corps, as an example, that occur with the individual owners.

So if you have two different owners and you have a structure that happens with the sale of the assets, those get deployed out to the respective owners and that's where the limitations exist. Is with those individual owners. But the main thing is, if you have over 5 million in a single transaction, that game deferral, the IRS, or the Internal Revenue Code, says that there will be an interest factor calculated on the excess gain above the five because you're not paying tax. And it's the gain on the tax. It's a tax, I mean, it's the interest on the tax that you would pay is what you have to pay. And so that, you obviously have things getting really fine out when you talk about the entity types. But it's anything above 5 million in gain, you have to pay some interest on the deferred tax. 

[00:35:59] Chad Ettmueller: Yeah, so these guys are selling these pro sports franchises, Ronald, you know, for four, for $400 billion, a $5 million, uh, cap is, is,I mean, that's, that's silly, but, but to Monty's point, we can discern what that, that penalty is and set up an annuity payment to address that.

[00:36:18] Ronald Skelton: Now, I know what I asked earlier about a one and done. So a lot of these guys sell their business cause they've got a brighter idea. They've got something else, a side business that's starting to take off. So they'll sell an SBA qualified business, meaning they're doing 5 million valuation or lower because they've got a side.

Here's one we evaluated, I can't say the name because the NDAs.Software company doing pretty good. Probably, you know, if they get the multiple they want, they'll sell at 4. 5, 4. 4 million dollars. His other business already has the one, the one he spun out of underneath there, a sub idea that they tried as a product.

Took off and is already doing 2 million in EBITDA. It doesn't make sense to run both. Like he needs to focus on the other one. So my question is, he sells this he put some of this money, you know, maybe two and a half of that for something in this product. Four years later he gets bored with this next one. Can is, it's a one and done or can you have multiple of these annuities? Can they can you have multiple of your products? 

[00:37:15] Monty Walker: You can do multiple. So it's not that, it's not that you've sold something now and you can never do another, another sale. So it's a lot of it's going to be the structure, but yes, you it's not an annual limit. Like, if you were thinking about a limit, a great, one that people often recognize as a sale of home.

I mean, it's just kind of common to a lot of everybody. They know that the married couple, they can get a, like an exemption on a certain amount of that. But if you try to pull the thing, same thing off the next year, you can't do it. So that, something like that doesn't apply here at all. 

[00:37:49] Ronald Skelton: I laugh 'cause I have a few dozen houses. Like, yeah, I wish I could get it every year. 

[00:37:53] Chad Ettmueller: Yeah. But, but you could use this strategy, right? And defer your, your gains. But more importantly, maximize your sale and amplify your sale through the design of the annuity. 

[00:38:04] Ronald Skelton: So there's also nothing stopping anybody from doing, taking the lump sum they get in a structured payment.

Like, you know, for a guy like me who likes to get the owner to carry some skin in the game, get you the money they get up front can go into the annuity. Then I'm still paying them a payment on the other side of it. It's just limit, you know, it would limit the amount that they could put in there, of course.

They could only put up to my, whatever trunk of cash I give them as a down payment. They could put into that annuity right? 

[00:38:27] Monty Walker: Now, you know, let's think about the kind of the premise of the question that. Let's say that you had somebody that cut a deal the way you described it where, I think you were describing 50-50.

You're going to have almost half of the transaction coming through in cash. And then the other half was already a note, with the seller. Now, what that leaves you with is one half of the total deal that was cash. And then, yes, the seller could then decide that they, how much of that cash portion that they want to structure.

Now, let's,let's take this premise to a $10 million deal. Not trying to over inflate, but just to get us into the limits. So if you have a $10 million deal and 5 million of that is already a note. 5 million is already a note. And then you have five, the other 5 million that would be cash. Well, if you, if the seller, and we've got one seller, let's say it was one seller. If that seller, structures, a part of that cash, they are already above the 5 million limit.

Because they had 5 million that was already in an installment note. 

[00:39:37] Ronald Skelton: Oh. So, the limit is the installment note, not the whatever we're putting into this particular structure. 

[00:39:42] Monty Walker: It's the code reg. Yeah. It's the code reg provisions in that transaction. So yes. So you have to look at the transaction and apply the limits within the scope of the transaction.

But I might add, most of the time than these business deals and you're probably familiar with your work in this space as well. You don't see this level with that much money and these limits already happening. Most of the time it's, we're dealing with the cash piece and worrying about limits on how much we're setting due to that, due to the.

[00:40:14] Ronald Skelton: Right. The reason I was asking is, a lot of times you're going to end up getting creative with the seller because they want to do something like this, but they want to do something else and, or they want, you know. But it sounds like they get to define this. Like they want some of the money down now and they want it because they have to live on that for the next couple of years, or they want to put that money towards our next project, but they're okay for taking the rest of it in installments.

[00:40:35] Chad Ettmueller: Yeah, it's really all about the opportunity to defer tax and the flexibility that this solution provides you. Right. I'm going to pivot for a second. I know we're business focused on this podcast, but just as an example. A popular tax strategy in real estate transactions are 1031 exchanges. Where you're just rolling your profits into the next property, uh, and deferring your tax obligation that way.

Well, in today's market, we've got all time highs in the real estate market. That's great. Wonderful to sell at the top of the market. It's not necessarily great to buy at the top of the market. And inventory is difficult right now to find. And so what we have a lot of real estate professionals coming to us with, are clients who, are, are accustomed to that 1031 process, but they don't want to do that anymore. They can't find a property that they are willing to pay for. And so what we're doing, is putting those proceeds into the structured installment sale. And we're allowing for a single lump sum in three years or five years from now.

And they know what that lump sum amount is going to be. And it gives them three to five years worth of runway. One, they're deferring the taxes, but it gives them some runway to identify that next property that they want to buy. They know that they've got that lump sum forthcoming. And they, they're going to have to pay their tax obligation when they receive that lump sum, but it allows them to identify the next property. Or in the case of a business owner, the next entrepreneurial endeavor that they want to jump into. 

It gives them some runway and you can define the payment and payments can come, the following year or they can be deferred up to 40 years. So the flexibility that the seller has, Ronald is second to none. It gives them opportunity to think about what their next chess move is going to be. They don't have to have that all figured out at the time of sale. 

[00:42:33] Ronald Skelton: So if somebody is listening right now and they're thinking about selling, or they're in the middle of selling their business and they're worried about the tax hit, what are the criteria to do something like this? Like, well, when does it make sense?

Is it a million dollar transaction? A $500, 000 transaction? Give me kind of the parameters in which that makes sense to, to have a call with Chad here. 

[00:42:54] Chad Ettmueller: Yeah, it's a great question and I appreciate it. And there's really no right answer. I will tell you, I've done deals as small as $20, 000, right? And it was, it was a, couple of, lovely couple in their 80s.

They had a very modest electrical business. They sold it for under a million dollars, but they had just had their first grandchild who was born. And they wanted to make sure that his college education was taken care of. So they took $20, 000 of their sale, put it into a structured installment sale and are making four annual payments to coincide with when he will be going to college.

It turned into roughly over $225, 000 for him. So they were thrilled with that opportunity. But it was a $20, 000 transaction. So, I appreciate the question. The answer would be it's appropriate in any situation where the seller needs or wants to defer taxes and needs or wants to do some financial strategizing or forecasting, that we can accomplish for them. 

There's virtually no scenario that a seller could bring to me, that I can't put in place for them, in terms of future payment design. I can pay monthly, quarterly, semi annually, annually. I can drop lump sums in along the way on identified future dates. Or we can do a combination of all of those payments.

And we can do it with fixed products and index products. So, I would be hard pressed for a seller to come to me with a, payment schedule that they want to implement that we couldn't accomplish for them. 

[00:44:31] Ronald Skelton: That's interesting. As far as the, from the, from Monty, your point of view, what needs to be, you think of all the stuff a seller has to do during a sale. Especially when they're doing an asset sale and they got to get all their assets identified, line item, then that big purchase prices has to be kind of somehow divided amongst all of it.

There's a lot of work that the CPAs and the attorneys and all do to make that work. When should they start talking to somebody like you and Chad, when this is going to happen so that it's structured? Is there something, the first question I guess would be, could they mess it up? Like when they're doing those asset allocations to all the different prices. Like even like brand equity and all these other stuff, all kinds of things getting in an asset sale, get labeled with a portion of that proceeds, right?

In that mix, when they, I don't even know what that process is called. I pay somebody else to do it if I'm, when I'm at that stage, but there's an, I'm sure there's a name for it. But when they're allocating that, say I'm gonna pay $2 million for businesses. The 200 line items, it's not just divided evenly.

The brands were something and the cars were something right. Can they mess that up if they don't do it right? Do they need to work with somebody like you and know that there's going to be an instruction annuity on the other side of it? 

[00:45:40] Monty Walker: It's best, uh, taxes, a proactive process. And uh, if you don't deal with it early enough, you lose planning opportunities. The closer to the date, you're going to try to close out the deal.

For M and A professionals, the time to really work with the client is when they're listing that business. And that you start working that out, identifying what's going on. I mean, anybody selling their business, there's several things that they need to know. One of them for sure is what's it worth.

But every one of them wants to know where am I going to land on the backside of this? What's going to be in my pocket when this is over with? And this, if you're going to be asking, well, what's going to be in my pocket, which they all do ask that, you've got to be able to start planning for the outcome of what's going to be in your pocket.

So let's say, let's nail that issue on the allocation of purchase price that you're referencing. You have a business that you're selling for two or three million dollars and that's for all the existing assets. So, if it's for all the existing assets, some of those assets are going to drive ordinary income.

Some of those assets are possibly going to drive capital gain. Some of the assets that are there may not even be justified to be purchased and they should be dropped off. You've got inventories that are there. You've got, uh, if there is real estate involved, I mean, every one of those is different.

So determining what the bank breakdown on that is going to look like is super, is super important. If you're inside of a C Corp, I'm back to your, you set the premise of different entities there, so I'm looking at that. So let's say we're dealing with a C Corp. And let's have, let's say they are in the manufacturing space. And they are dealing with lots of capital, most manufacturers have a lot of capital investment.

So they may have two or $3 million worth of equipment. Well, if you have two or $3 million worth of equipment, but yet, uh, we got depreciation recapture problems coming, what does that mean? Well, that means you've got to start dealing with it early enough to figure out if the equipment values really make sense at the upper level, lower level.

We also have this wonderful thing and you may have come across this before, Ron, called personal goodwill. And in anybody, in any business transaction, there is some element of the value in that business deal that's tied to the person. And we're talking the entrepreneur preferably. Well, if you don't start that process early enough and you're down there at the end trying to deal with this, it could be too late to deal with that problem.

And what happens if they could, if they're sitting there with a million or $2 million worth of personal goodwill. And really the thing on that is that's value that's tied to the person, not the business. And so even if there is depreciation recapture, if there's personal goodwill, it goes to the individual, that's capital gain.

They got several, they could have several million dollars sitting there that could be deferred off into the future. But how can you deal with that if you wait until you're trying to close. And you're a few days away and you realize I've got to do something about my tax. So as early on in the process as possible, it's a proactive process.

[00:48:40] Chad Ettmueller: Now that said, Ronald, I've had folks call me and say, I'm closing in two days. Can you help me? And we can.We can move at breakneck speed and, I can have quotes to a seller within an hour. So that they can at least be looking at some options for themselves. It doesn't solve the problems Monty, just addressed.

And it, it eliminates the ability to properly plan. But in the worst case scenario, if somebody is listening to this today and they're closing next week, we can help them. We just don't have as much runway as we would like. 

[00:49:15] Monty Walker: Chad is correct. You can defer, even if it's a day before. Is there something that can be done to help deal with deferral. Now, the answer to that is yes. It's just that there could have been a way to increase the level of income that's available for deferral if you started early enough. But is there something that can be done for what is there? Yes, no matter what timing. 

[00:49:37] Ronald Skelton: And it sounds like it's, it's not just like, okay, the purchase price is 5 million.

I'm going to stick 5 million into this annuity. They need to work with a CPA like you and figure out what portion of, you know,there's a lot more complex than somebody is about to wire me a bunch of money, where am I sticking it? Which is kind of what, a lot of the sellers I've talked to, they kind of seem to think, well, I'll deal with that after the close.

I was like, well, there's certain things you could do with the money you need to do with before it's wired to you. Once you receive it, it's done. 

[00:50:02] Chad Ettmueller: And remember, once they receive it, if they take constructive receipt of it, the structured installment sale option is off the table. So that, because the money has to go from the escrow account to the life insurance company.

[00:50:14] Ronald Skelton: Well, I've asked a bunch of questions so far. What should I be asking? I mean, what have we missed here? So, uh, like I don't want to leave anybody with, get off the call and you guys go, man, he should ask this cause they really need to know it. What do the listeners need to know about this product?

[00:50:30] Monty Walker: Let's, let's back into a little, some of the things I can think of kind of flow with points that you had previously made. And you're talking about business deals and everybody's not going to have the same kind of structure. That's just the reality of it. Some people are S Corps, some people are LLCs.

Some people are C corps. Some people are some proprietors. Some people are going to sell equity. Some people are going to sell assets. Some people are going to do both, that they can, you can do a thing called a bifurcation. One entity, assets sell in an equity deal both at the same time. Let's just, let's kind of hit a few things that, that will help.

Let's take an LLC LLC taxes a partnership. Let's just do that. Common mistake is reason why I'm bringing this one up. It's a common mistake that when somebody sells their LLC, they think that they'll get the same outcome as selling the stock of a corporation. And when stock of a corporation is sold, the general thought is, I'm going to pay capital gain on that.

I got capital gain coming, I'll pay capital gain tax. And generally that would be accurate on, on, on stock. With an LLC though, tax as a partnership, it's the underlying assets inside that LLC that drive the tax. So the asset being sold is the equity, the LLC member interest, and you can sell 100 percent of it.

But in the tax code, when you sell 100%, you're deemed to actually be selling assets. So now we're back to the same issue. What are the all the underlying assets and what portion of those assets and the gains, uh, can be deferred? What can be there? So mistake or with, in the tax world, mistakes happen with LLC member interest.

That is, they are not treated in that like stock sales are treated. It is generally the underlying asset base that drives the outcome for tax. The big issue in business deals, and I'm sure you face this, is working capital seem, is a really a big issue. As the deal size grows, working capital in these business transactions also grows with it.

And so, working capital transfers can create issues. And that is you're going to have receivables and inventory and accounts payable, those different things flowing as a part of the assets included in a deal. Well, inventories are not available to be structured. Accounts receivable, uh, themselves don't fall into that same category.

And so what we're dealing with here is we're trying to identify no matter what. Even when working capital is included, we're trying to come down to those assets that create capital gains. Those assets that create capital gain. For the listeners on the podcast, if they bought a business in the last 15 years, or if they previously purchased a business, let's just go that way.

Very likely they have been amortizing as a tax deduction, goodwill. Goodwill, is subject to depreciation recapture, just like physical assets are. So if the business hasn't grown tremendously, but yet it's been 10 to 15 years since the business was bought. Well, that seller could be facing down some ordinary tax treatment on the sell of the goodwill, which typically doesn't happen in a lot of the CPAs do not even think about that when it's occurring.

Another item is subject to, that is subject and available here, is when you sell a non compete. It's a crazy thing. People do not realize this. It's in the tax code. A non compete arrangement is deemed to be an asset that, that the treasury regs kind of labeled it out that way. So can somebody sell that and possibly defer that?

That there's something there that a lot of people don't think about. There could be some deferrals coming in off of that because it's deemed to be an asset. One last point I'll make that it's not even business related is in, in excess of anybody's exemption available on the sale of their home, any gain on the sale of their personal home is available for use in this solution.

So, everybody that's here listening that even if, even if they're not selling their business, so they just happened to be selling their home, anything above the exemption that they can get, from the,for the exemption on the sale of that property, any additional gain is available for this, strategy.

[00:54:48] Ronald Skelton: So if you were above that limit, you were trying to downsize like my in laws just did. Funny, they downsized but they bought a bigger house, but in a lower cost area, right? Palo Alto houses are very expensive. And then, we move up here into the, I live, we live near them, but they move up here and bought a bigger house for a third of what it costs.

You know, the sell the smaller one. Uh, you know, what they sold the smaller one for. Anything above that amount that was, their personal exemption they could have put into a product like this. It's too late now they didn't, but they could have put away that. That was a significant sale. 

[00:55:23] Chad Ettmueller: Yeah. And think about how many of those transactions are happening in California.

Where property values have just skyrocketed. I mean, California is its own unique animal when it comes to real estate, but there is profound opportunity for real estate business, uh, folks. 

[00:55:38] Ronald Skelton: I won't give you their, I won't give you their sales price because I don't have authority to do that because it's theirs.

But, it was a mile or two from Stanford University. So if it gives you anything, you know.And then we moved up here and this house was less than a million dollars. So it was more than two. I'll put it that way. But, uh, so they had room to do something like that. Interesting there's, there are others interesting products when you hit numbers that big that banks do different things and stuff.

So, uh, that's another show for another day. One last question. I know we're a little bit over time, but let's just, I got one last question that's eating at my head. It's because it's a scenario that happened about a year ago. Owner calls me and says, Hey, you know a lot about selling businesses. I'm not really wanting to sell my business, but you might be able to answer my question or point me to the right advisor.

And the scenario was, he had a business partner that was, is, or they had somebody bringing on as a business partner. Make the story fun, it was actually one of his, other business partners, son, who the business guy passed away. Lead sales guy and, just killing it in sales, growing the business, doing good.

He wants to bring him on as a partner, but he wants to sell a piece of the business to him. And it was a significant sale. So what they did was kind of cool. They had been saving his bonuses up, the sales bonuses. And now he's got, a million dollars worth of uh, save deferred income or whatever sitting there.

They're going to give that to the owner to buy it. Can you take a partial sale where like I'm selling 50 of my company to a partner bringing on a partner? Can I put that in annuity? Or is it a one time transaction because i'm selling a full asset? 

[00:57:03] Monty Walker: Yeah, are you talking about for the equity piece? 

[00:57:05] Ronald Skelton: Yeah. So i'm running, the business is still going, right? But I'm selling 50 percent of my equity to a third party who's going to be a partner in it.

I'm getting the, that money's getting dispersed to me as a seller of that portion of my business. Can I put that in this product? Or is it the IRS code for the total transaction of like leaving an entity? 

[00:57:26] Monty Walker: No, the, if you're talking about a 50 percent sell of an existing structure, so you really do have an equity transaction that's happening?

Okay. Not looking at any other pieces of that puzzle. I know the pieces of the puzzle. You're trying to get money out to a seller out to the buyer. So the buyer can pay the seller and all that kind of stuff. So let's just focus entirely to the taxation that would be recognized by the seller. Can that tax on that equity deal be deferred under this solution?

The answer would be yes. And then the answer would be, it would have to be structured maybe a little differently between the entity type. So, if you had a C Corp, S Corp, and LLC, further delineation of how the layers of that would be have to be handled. But can the sale of 50 percent of the equity of being used in this structure to defer the tax that the seller of that equity would recognize in, even in an existing business and it's a partner buy in, can that happen? The answer is yes. 

[00:58:26] Ronald Skelton: Cool. And then the last question, we do have a lot of people doing this one. They sell all or most of their company to an ESOP and an employee stock option program. Or they basically sell it to the employees. Can the proceeds from that sale still go into a product like yours?

[00:58:41] Monty Walker: Now that one has got a multitude of answers to it and we would be here for a while. But let me answer just generally, okay. In a leveraged ESOP transaction, what's really happening is the stock or the equity is put into the ESOP and then the company is paying that out over time.

You've already got an installment provision. There's no cash. Okay.In an ESOP, there can be cash that's funded through a lending source and you can invest that money into blue chips and still defer income gain recognition. Okay, so assuming that neither one of those are happening, then the answer could be, would be if the ESOP transaction is generating cash to this holder of the stock and ultimately there would be no other mechanism that would be available under those ESOP regs to defer that, yes. 

[00:59:35] Ronald Skelton: So the answer is, maybe they need to talk to you first. 

[00:59:38] Monty Walker: Well, that, so I think once you're picking up is that you got to, they got a team that they would approach with Chad and I, that we can figure out that. What can work with them.

[00:59:47] Ronald Skelton: Yeah. So the reason I ask that my dream deal is I don't want to be the CEO of a $25 million company. I'm 51 and I've probably got about 10 more years worth of work I even want to do in me. But, my dream deal would be to find a 25 to $50 million valuation company that had real estate that they're setting on that's worth almost as much as the business. Because I have a team that can actually do a sell lease backs on a premium on that and pretty much buy the entire business from the real estate purchase price.

So they would give us, so basically I'd buy the real estate and the business as one unit. I would sell these back to real estate through this entity. Pay the owner down on his, basically give that money to the owner. And then you would have to raise a lot less capital to either own the company.

And then later within probably 12 to 18 months, sell the entire thing to the employees through an ESOP that's funded through third party banks. I've got a company that'll do that. Walk away with, hold say 20 percent equity in the company and have a decent check for doing the transaction and be in and out of it in less than two years.

That's the dream deal. Like that's my unicorn I hunt for. But you know, the, the dream deal, my unicorn I hunt for is that type of scenario. So that's why I was asking these complex questions is okay. When that unicorn comes across, can I stuff some of that money into the structure? And you, you answered it, the answer is call you. 

[01:01:03] Chad Ettmueller: The one thing, Ron, I would just mention. A lot of your listeners, uh, have relationships with financial planners. And folks that they've been talking to on the golf course or at the bar for years about how am I going to exit my business and what am I going to do with my money?

And now they're hearing about this strategy, which is something that their financial planners, quite honestly, have probably never heard of. And quite honestly, they don't have access to it. If we go back to the very beginning of our conversation, I'm in this situation because of my work as a settlement planner in personal injury space. The life insurance companies that are offering this product have come to us as trusted financial advisors and representatives of their companies who understand the complexities of IRS documentation and making certain that every I is dotted and T is crossed with these, these transactions. And they are offering this through a finite number of us across the country. And so I just want to encourage your listeners that if they approach their trusted financial planner and say, Hey, I want to do this.

They may get a lot of pushback because that financial planner is saying, I've been working with you for three or five years trying to plan this. And now, my commission is going to walk out the door. Cause you're going to go and do this other, other product. I will always work cooperatively with somebody's financial planners.

We will always find a solution. We are not looking to take food off of somebody else's table. We want to be able to transact a solution that makes the most sense for the seller. And if that means we need to work cooperatively with their, their folks that are already in place and who, with whom they've been working for many years, we are always happy to do that. And we will do that. So I just want to make that point clear, because I think it is important. 

[01:02:57] Ronald Skelton: Awesome. Awesome. We're heading out to end of the time. So what's the best way people can reach out to you? 

[01:03:03] Chad Ettmueller: Yeah. Direct number for me is 7 7 0 8 8 6 7 4 0 0. they can also find us on, uh, online at J C R settlements. com forward slash installment dash sales. 

[01:03:22] Ronald Skelton: Awesome. And then Monty, if somebody wants to help them straighten out how this, the M and A structure should look like, are you taking on new clients in the CPA realm of like,planning this out and getting them ready to work with Chad and his company?

[01:03:34] Monty Walker: Absolutely. Now Chad would route me in as the, as any opportunities coming in that would involve. But certainly in the, as in pre-planning, there's things identify where this is applicable and I would route it right to Chad. So they can reach, me on any of the structuring M and A type advisory support work at. Then, they can find me at walkeradvisory.com. So that's walker advisory.com. Or they can call me at 9 4 0 3 2 2 5 0 8 6. 

[01:04:04] Ronald Skelton: So, uh,that said, appreciate your time here. I appreciate the knowledge you shared with our, uh, our customers and our listeners here and, thank you both. 

[01:04:13] Chad Ettmueller: Thank you, Ron. It was a pleasure to be with you today. 

[01:04:15] Ronald Skelton: Cool. Hang on for just a second. We'll call that a show.