623-229-0463 Tennessee Deferred Sales Trust Attorney
Are you looking for tax strategies to improve your long-term financial security and protect your family’s wealth? A deferred sales trust (DST) may be what you need. Long used by the ultra-wealthy, this is “The Tax Tool You Didn’t Know You Had.” It lets you defer capital gains taxes when you sell real estate, a business, or another high-value asset to maximize the returns on your investment.
At 453 Deferred Sales Trust Powered by Pennington Law, we use our extensive knowledge of trusts and tax strategies to help you utilize this powerful financial tool to meet your financial goals. Call now or complete our contact form for a free consultation with a Tennessee deferred sales trust lawyer to get started.
Why Choose 453 Deferred Sales Trust Powered by Pennington Law?
At 453 Deferred Sales Trust Powered by Pennington Law, we offer Tennessee residents a one-stop solution for deferred sales trust planning. Our all-in-one service covers everything—irrevocable trusts, trustee responsibilities, reinvestment strategies, and tax preparation—under a single, IRS-compliant program. Unlike other firms that rely on separate professionals, we streamline the process by keeping it all in-house.
Additionally, our team’s experience spans tax law, financial advisory, estate planning, asset protection, insurance, and fiduciary matters. This well-rounded knowledge base helps us tailor every aspect of your deferred sales trust to meet your unique needs.
Lastly, Andre Pennington is nationally recognized for his tax and financial planning skills, with mentions in The Wall Street Journal, Forbes, The New York Times, USA Today, and other renowned publications. Pennington has also earned accolades from Super Lawyers, Lawyers of Distinction, and Best Attorneys in America. Clients value his personalized guidance and dedication to helping them achieve financial security. In addition, our practice was recognized as the Best Deferred Sales Trust Law Firm in the U.S. of 2024 by Best of the Best.
What Is a Deferred Sales Trust and What Are Its Benefits?
Working with a Tennessee deferred sales trust lawyer is crucial for making the most of this tax strategy and answering your questions. This includes answering the most important question of all: What is a deferred sales trust? At the most basic level, a deferred sales trust (DST) lets you sell high-value assets, like real estate or businesses, while deferring capital gains taxes. This tax-efficient approach provides significant financial benefits, including:
A DST leverages reinvestment opportunities, helping your proceeds grow through diversified investments and compounding returns.
The tax benefits of DSTs can make a significant difference in your financial stability. By deferring capital gains taxes, you retain more of your profits for reinvestment, boosting your financial growth. Oftentimes, we at 453 Deferred Sales Trust Powered by Pennington Law employ financial strategists that mitigate and, most times, eliminate the impact of the capital gains tax.
When it comes to deferred sales trusts vs. 1031 exchanges, DSTs are the clear winner. DSTs offer more freedom than 1031 exchanges, apply to various asset types, and eliminate strict reinvestment deadlines.
This trust structure freezes the taxable value of your estate, limiting estate tax liability for your heirs.
A DST ensures your family’s financial legacy remains protected, providing stability for generations.
Finally, DSTs allow you to shape your financial plan to fit your unique goals, offering more control over your investments and income.
Who Is a Deferred Sales Trust Best For?
If you’re interested in DST strategies, we can explain the financial benefits of DSTs and assess whether having one would make sense for your situation. Some people who can enjoy significant benefits from creating a DST include:
A DST offers business owners a chance to defer capital gains tax, reinvest proceeds from selling an asset, and reduce the financial strain of a one-time tax hit.
If you own investment property that has greatly increased in value — such as market investments, cryptocurrency, and real estate — a DST lets you sell it without a burdensome tax bill.
A DST is a smart option for those approaching retirement who want to diversify their portfolio without triggering substantial taxes.
Selling inherited property can come with substantial tax challenges. A DST helps you manage these issues while preserving wealth for your or your family’s future needs.
How Does a Deferred Sales Trust Work and How is Income Generated?
Deferred sales trusts are complicated legal and financial trusts, so it’s critical to work with a skilled and knowledgeable attorney to make the most of your investment and avoid any trouble with the IRS. Here are the basic steps of selling a high-value asset using a deferred sales trust:
First, you place your appreciated asset (such as a business or real estate) into the deferred sales trust to defer taxes.
Next, the trust completes the sale, transferring the asset to the buyer while deferring your capital gains taxes.
The proceeds from the sale stay in the trust. This ensures the funds are preserved for strategic reinvestment while minimizing your tax liability.
The trust invests the funds in diverse portfolios, such as real estate or financial securities, aimed at growing your wealth. This allows you to grow the proceeds through various investment strategies while still deferring and, most times, eliminating capital gains tax consequences.
You receive structured payments from the trust over time, providing a reliable income stream tailored to your financial needs. The nature of these payments is one reason a DST is sometimes called an installment sale trust. Your capital gains tax liability will spread and, most times, be minimized over a period of time, rather than your having to pay it all at once.
What Are the Requirements for a Deferred Sales Trust?
The IRS requires people to follow strict rules when creating and using a deferred sales trust (or other 1031 exchange alternatives) to sell a business or other high-value asset. The essential requirements for deferred sales trusts in Tennessee are:
A deferred sales trust must be a legitimate third-party entity managed by a qualified trustee who operates independently from you. This independent structure is crucial to meeting IRS requirements. Having a credible, professional trustee safeguards your assets and strengthens the trust’s compliance with applicable laws.
Once the trust sells your property or business, the proceeds must flow directly to the trust. You cannot take possession of the funds without triggering an immediate tax liability. By placing the sale proceeds in the trust, you defer capital gains taxes and retain control over how the money is reinvested.
Establishing the trust before finalizing a sale agreement is non-negotiable. If the trust isn’t in place when the sale is completed, the opportunity for tax deferral is lost. Planning ahead allows you to take full advantage of the benefits a deferred sales trust offers, giving you the flexibility to sell your assets on your terms without immediate tax consequences.
The professionals managing the trust, including trustees and financial advisors, must receive reasonable compensation for their services. This compensation is necessary for compliance with IRS rules and for the effective long-term operation of the trust.
What Assets Are Suitable and Eligible for a DST?
An experienced attorney can help you create a DST to maximize your return on many kinds of assets, including:
If you’re selling your business, a DST can help you defer taxes and reinvest proceeds in diverse opportunities.
You can sell your shares or partnership interests in a business through a DST, deferring taxes and preserving wealth.
A DST can defer taxes on the sale of appreciated real estate, such as rental properties or commercial buildings.
Stocks, bonds, and similar investments are eligible for DSTs, allowing you to sell these assets without immediate tax implications.
You can manage the sale of cryptocurrencies with a DST to defer capital gains taxes and reinvest the proceeds strategically.
Investment portfolios with significant appreciation can benefit from DSTs, as DSTs enable tax-efficient reinvestment strategies.
Lastly, art, antiques, and rare collectibles qualify for DST treatment, helping you protect your gains and preserve capital.
What Our Tennessee Deferred Sales Trust Attorneys Can Do
Our Tennessee deferred sales trust attorneys begin by analyzing your financial situation and the specifics of your asset sale. This thorough review helps us understand your needs and the potential benefits of a deferred sales trust. We also take the time to discuss your goals and answer any questions you might have about these complex instruments.
If a DST is appropriate, we can handle every aspect of its creation to avoid potentially costly errors. Setting up a trust improperly could result in losing its tax benefits or even facing penalties and fees. Our team ensures the trust is structured to comply with all IRS requirements.
Lastly, we tailor your deferred sales trust to meet your unique goals. Whether you prefer to spread payments over time to reduce tax liabilities or defer taxes entirely by using only income from reinvested proceeds, we customize the trust to fit your situation perfectly.
Contact a Tennessee Deferred Sales Trust Attorney Today
The longer you wait to talk to a Tennessee deferred sales trust attorney, the more money you could be leaving on the table. Contact 453 Deferred Sales Trust Powered by Pennington Law today for a free, no-obligation consultation.