Frequently AskedQuestions

Brookhaven Crypto Advisors tailors time-tested planning strategies to the fiat off-ramp. Our focus isn’t just on tax mitigation, our focus is on implementing holistic planning strategies that couple tax mitigation with cash flow generation, protecting what you’ve earned, privacy for you and your family, and integrated investment opportunities, together, aimed at funding the lifestyle you want in a manner that’s private and protected. 10% of our energy goes into setting up your plan, and while initial planning covers multiple technical considerations and calculations, it’s the easy part (in our opinion). 90% of our energy goes into what matters most: administering, monitoring, adapting, and proactively influencing your plan to maximize its tax and planning efficiency as you offramp. We’re involved not just in setting-up your plan, but continually – focused on advising you and adapting your plan as your circumstances change. Learn about how Brookhaven Crypto Advisors is leveraging time-tested strategies to create income-producing strategies for its clients – and how it may benefit you, by watching this film.

Brookhaven Crypto Advisors prides itself in being an integrated and strategic partner poised for continual and proactive service of our clients for decades to come. We despise transactional service providers and aren’t afraid to admit it. A transactional service provider is the lawyer pushing the trust document, commenting in stream comments to sell you ink on a sheet of paper that they “drafted” by exporting a trust template from their legal software and adding your name. A transactional service provider is the CPA myopically focused on cranking out tax returns (because that’s how they make money), rather than proactively planning for tax around the uniqueness of crypto. It’s the insurance agent looking for a quick buck and the trust company putting themselves out as a partner but focusing their efforts on paying bills and coordinating tax prep for the trust, and not on ensuring an integrated tax, investment, estate, insurance, and cash flow plan is implemented and overseen in an effective manner. We made a promise to ourselves (and our clients) when we started Brookhaven Crypto Advisors: we would NEVER be a transactional service provider. We’re in it for the long run – with you – as a continual force of proactive and efficient planning. Learn more about what differentiates a transactional relationship from a true partnership by watching this film.

In planning – implementation is everything. Cryptocurrency for example is evolving in the eyes of the government and the IRS. To protect your gains you need an airtight plan that’s informed by multiple overlapping and integrated considerations – tax, financial, trust, estate, insurance, etc. – in a manner that allows each to work in concert together. With clients mostly involved in more legacy products/investments you probably won’t face so many considerations each year. BCA is the one-stop-shop for your planning needs and there’s a reason for that. There’s no doubt that other talented and experienced professionals exist outside of BCA, but rarely do we find talented and experienced professionals that are able to effectively communicate and integrate their plan into the larger plan. Clients that engage multiple service providers (e.g., attorney, trustee, CPA, insurance agent, etc.) often end up with isolated plans – a tax plan, an estate plan, a trust plan, an insurance plan – plans that don’t effectively consider and account for the overlap across other planning disciplines. Ensuring your plan works in harmony across all planning arenas is what makes a plan effective and it’s why BCA quarterbacks the planning process across all planning disciplines. Learn more about why holistic and integrated planning is important and how it may benefit you by watching this film.

Proactive planning is critical to ensuring you maximize your plan’s effectiveness. Even if you don’t plan on off-ramping to fiat within the short term, having the infrastructure of your plan built, is critical to take advantage of the tax benefits when you do sell and the asset protection and estate planning benefits before you sell. Learn more about why it is important to be proactive in setting up your plan by watching this film.

Absolutely not. We do NOT control when you sell, how much you sell, and we do not have access to your seed words. We value and respect your privacy and security. We DO maintain a continual involvement in your planning, as a source of proactive advice. As you consider off ramping, we discuss tax implications and planning strategies, along with how to make the money productive when it’s converted to cash, so that you can buy the things you want and have the income stream you desire. Learn more about how working with BCA may benefit you by watching this film.

Yes you absolutely can and in the short term this will probably appear cheaper, just remember you will have to pay retainers and hourly rates for most of these service providers to get any work or changes made at any point in the process, outside of that you would probably not get access to their inner rolodex of private equity deals (assuming).

There’s a $20,000 initial set-up fee that covers the legal work necessary to construct the various trusts and entities that make up the basic architecture of your plan. Generally, this includes the set-up of a Revocable Living Trust, Asset Protection Trust, Charitable Remainder Trust (if desired), and any business entities you need along with its corresponding Operating Agreement. While the fee is generally not larger than $50,000, the initial set-up fee may exceed this amount in situations where a client has a very complex planning situation or the client is ultra-high net-worth, requiring more involved planning structures and strategies. Ongoing legal fees are not mandated and would only be required if you added a trust in the future or amended a current trust. BCA has negotiated preferential rates in both situations.

BCA works with you to ensure your plan is adapted to your situation. We don’t provide legal advice or tax advice, but work with strategic partners that help ensure your plan is tailored to your situation. So, in short, yes. We ensure your plan is modified based on planned and unplanned changes. BCA does not charge a fee for any coordination we provide in adapting your plan. There may be a small legal fee associated with an amendment of an existing trust.

BCA does not provide tax advice, but it’s strategic tax partner (Brookhaven) does all tax filings for BCA, including personal, business, and trust tax returns. The fee is generally based on the complexity of your tax situation. The more time it takes to plan, the higher the fee. Their fees will generally range from a few hundred dollars to a couple thousand based on complexity. Their rates are the “going rates” for most anyone with their experience and expertise. You could probably find cheaper rates at somewhere like H&R Block, but you’ll be cutting corners If you’re doing that, and the lack of effective communication between tax preparer and BCA has large potential downsides (tax plan and estate/investment plan not being coordinated). This is why we require Brookhaven to be the ones that do the tax returns for BCA. They are integrated into the team (just like the legal team), which ensures we’re all on the same page and effectively tailoring and adapting the plan to your needs as they change.

Yes, but through our strategic tax partner (Brookhaven).

We don’t custody keys, period. Your keys are yours and it’s critical to maintain their security. We may provide advice on how to protect your keys and ensure a plan is in place for their transfer to the next generation.

We’re highlighting three trusts, but there’s more third-party legal team may consider based on our client’s situation, goals, and objectives. Most clients ask why more than one trust is needed, and it’s a valid question. The reality: each trust optimizes a particular benefit. In an ideal world, you would have one trust that optimizes all benefits, but it doesn’t exist. If it did, the trust would conflict with itself – because certain benefits of a trust preclude it from taking advantage of other planning benefits, hence the need for trusts focused on optimizing specific benefits – privacy, protection, tax, etc. Our trusts are built to hold your assets (e.g., crypto and non-crypto) before and after you sell them. When you sell your crypto, the cash proceeds are put to work within the trusts in a manner focused on income production. The Revocable Living Trust, the Domestic Asset Protection Trust, and the Charitable Remainder Trust are topics of this conversation, but our conversation may expand into other trust planning realms based on your facts and circumstances. Learn more about how each trust may benefit you by watching this film. You can also learn more about each trust in the films specific to each trust, below.

The Revocable Living Trust is a centerpiece of your estate plan. It provides guidance (a customized “rule book”) that spells out the management and transfer of your wealth in the case of your (and your spouse’s) disability and death, ensuring that your wealth passes to those you care about in a controlled and private manner. The Revocable Living Trust is, as is indicated in its name, revocable. Meaning, it can be amended or revoked by you at any point, as many times as you’d like. This gives you the ultimate control over the “rule book,” what goes in the trust (or comes out) and who receives the benefit of the trust when you pass. Learn more about the Revocable Living Trust and how it may benefit you by watching this film.

The Charitable Remainder Trust is often used to mitigate taxes. Because it doesn’t pay taxes, it generally avoids capital gain tax exposure (federal and state) associated with the sale of highly appreciated assets held within it (e.g., crypto). In addition to not paying taxes, it permits its “founder” (known as the “Settlor” or “Grantor” – that’s YOU) to take a charitable income tax deduction associated with the value of assets contributed to the trust. This charitable income tax deduction shows up on your personal tax return, allowing you to offset and reduce tax outside of the trust (e.g., investment income, other crypto gains held outside the charitable trust, W-2 income, 1099, K-1, etc.). Generally, this trust’s benefit is most effectively tailored to the goals of the crypto owner when there’s an existing charitable intent. Learn more about this trust and how it may benefit you by watching this film.

Domestic Asset Protection Trusts are designed to keep your assets private and protected, as a risk mitigation strategy to minimize the threat of lawsuits. This trust allows the owner to keep certain assets outside the scope of certain liability, if the trust is set-up within an effective jurisdiction, and administered effectively. In addition, the trust may provide a tax benefit in a manner that excludes certain income from state taxation. Learn more about how establishing a Domestic Asset Protection Trust may benefit you by watching this film.

This is a trust that owns your life insurance policy so upon death, the money is not subject to estate taxes in the event your net worth exceed certain estate tax thresholds.

Contrary to what many people assume, taxes are only a small part of building an effective plan. Executing and integrating the tax plan into the larger aspects of your plan is what matters most – and we’re here to do that. Our tax planning is proactive and focuses on various strategies aimed at eliminating, mitigating, and/or deferring capital gain, and/or state and federal income tax. Charitable Remainder Trusts, as a tax-focused trust solution; Qualified Opportunity Zones; as a tax-efficient business/real estate investment strategy; and tax-credit-focused investment strategies, are just some of the strategies we employ to enhance tax efficiency for our clients. Learn more about why by watching this film.

You CAN add personal income to the trusts beyond proceeds resulting from crypto.

You can repurchase crypto from your revocable living trust. The irrevocable trusts will likely be less adaptable to the repurchase of crypto.

You can use margin, which is a type of collateralized borrowing, but institutional custodians won’t let you use crypto as collateral. So, it would only be able to be used against the fiat positions you hold in your trust. We’re working on a solution for collateralizing crypto for purposes of loans.

Loans are generally always considered a non-taxable event.

Cryptocurrency exchanges are platforms that facilitate the trading of cryptocurrencies for other assets (digital currencies aka crypto-to-crypto and fiat currencies). Cryptocurrency exchanges act as an intermediary between a buyer and a seller and tend to make money through commissions they put on that trade and transaction fees. Every exchange charges different fees to trade, exchange and send crypto & fiat currencies.

There are several ways to buy cryptocurrencies, from OTC (over the counter), to exchanges, even some non-digital wallets now allow you to buy bitcoin (depending on country). The general steps: choose what exchange/broker you want to use to purchase your crypto; set up and verify the account (KYC, AML); deposit cash or use a credit card to fund your purchase; purchase your crypto; and select a storage method — no matter what crypto you buy, DO NOT leave it in your exchange wallet, it is NOT safe!

A taxable event in the United States is when you exchange one crypto for another, when you exchange a crypto for a fiat/stable coin, mining cryptocurrencies, or taking profits off your holdings. That being said you also have to state crypto losses.

Crypto miners will generally face tax consequences (1) when they are rewarded with cryptocurrency for performing mining activities, and (2) when they sell or exchange the reward tokens. You owe tax on the entire fair market value of the crypto on the day you received it, at your regular income tax rate. And if you hold the same cryptocurrency you mined or earned from these activities its value increases, and you either spend it or sell later at a profit, you would also owe capital gains taxes on the profits, based on how long you’ve held it.

Loans are generally always considered a non-taxable event, the issue is will Liquid Loans the coin/project be classified as that by the IRS? We don’t know yet.

Airdrops are taxable at their value upon receipt. One of the reasons why they made it $0 launch is to make it untaxable. That said, the IRS could poke holes in that but under the current rules that’s how it works.

There’s a $50,000 initial set-up fee that covers the legal work necessary to construct the various trusts and entities that make up the basic architecture of your plan. Generally, this includes the set-up of a Revocable Living Trust, Asset Protection Trust, Charitable Remainder Trust (if desired), and any business entities you need along with its corresponding Operating Agreement. While the fee is generally not larger than $50,000, the initial set-up fee may exceed this amount in situations where a client has a very complex planning situation or the client is ultra-high net-worth, requiring more involved planning structures and strategies. Ongoing legal fees are not mandated and would only be required if you added a trust in the future or amended a current trust. BCA has negotiated preferential rates in both situations. You can read more about our fee structure here. If you are interested in family office services, that is separate from the above.

Brookhaven Crypto Advisors may make money, after client expenses are handled, through a Service Fee in addition to managing a private equity fund on behalf of our clients. Unlike other service providers, our fee is not charged monthly or quarterly or annually. It’s charged when you exit crypto and there’s no obligation for you to do so – ever. The fee is charged when you exit your crypto, not when you re-stake or convert to another crypto – only when you exit. The fee structure is a flat rate 1.5% and is applied against any amount you exit to fiat. Read the full breakdown of fee structure here. Keep in mind that family office services is separate from the above.

To become a private client first you fill out the consultation form and pay the $500 fee. This $500 fee is applied towards the core service offering we provide once you get started. In the rare event that we aren’t a good fit to work together we will refund the $500 consultation fee.

Brookhaven Crypto Advisors currently does NOT offer any hourly consulting.

Brookhaven Crypto Advisors does NOT currently offer any a la carte services, we have private clients and family office clients.

Brookhaven Crypto Advisors are a strategic partner for you, meaning after we consult with you through the first few calls, we then go and setup the trust structure and documentation for you. From then on we work with you on an ongoing basis, so yes we are there for you and do the heavy lifting when needed.