623-229-0463 Illinois Deferred Sales Trust Attorney
Do you know the potential benefits of using a deferred sales trust for your asset sales in Illinois? It’s a financial tool that has provided the ultra-wealthy with substantial tax relief for years, but a DST can benefit anyone. Think of it as “The Tax Tool You Didn’t Know You Had” — one that could make a substantial difference in how you handle the sale of your assets.
At 453 Deferred Sales Trust Powered by Pennington Law, our experienced lawyers are ready to guide you through setting up a deferred sales trust that aligns with your financial goals. Don’t miss the opportunity to discover how you could benefit from this powerful financial strategy. Contact us today for a free initial consultation with an Illinois deferred sales trust lawyer, and let us help you make informed decisions about your financial future.
Why Choose 453 Deferred Sales Trust Powered by Pennington Law?
453 Deferred Sales Trust Powered by Pennington Law offers a distinctive approach to managing your proceeds and reducing capital gains tax. Here’s why choosing our firm can benefit you:
We offer a seamless experience by managing every aspect of your deferred sales trust under one roof. Unlike other firms that might use multiple agencies for different tasks, our team handles irrevocable trusts, appoints professional third-party trustees, manages financial reinvestment, and takes care of tax filings in-house.
Our team brings together diverse experience in tax law, estate planning, financial advisory, wealth and fiduciary matters, insurance, and asset protection. With our professionals, you receive advice and service that comprehensively addresses all your needs.
Andre Pennington, our principal attorney, is nationally recognized for his deep understanding of tax, trusts, estate planning, and investment services. He has been recognized in major publications like The New York Times, Forbes, Inc., The Wall Street Journal, and USA Today. He has also been listed annually in Super Lawyers, Lawyers of Distinction, and Best Attorneys in America. Our practice has also been recognized as the Best Deferred Sales Trust Law Firm in the U.S. of 2024 by Best of the Best.
We prioritize maximizing the value of your investments. We understand the hard work you’ve put into building your business and work hard to ensure that the final step in your financial strategy enhances the rewards of that effort.
What Is a Deferred Sales Trust and What Are Its Benefits?
So, what is a deferred sales trust? Also known as an installment sale trust, it’s a legal tool that allows you to defer capital gains taxes on the gains you make from the sale of a property or business. By transferring your assets into the trust before selling them, you avoid immediate capital gains tax and can reinvest the proceeds into other investments managed by the trust. 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.
The financial benefits of DSTs include the following:
DSTs allow you to reinvest the full amount of your sale proceeds rather than the reduced sum after taxes, aiding in more effective wealth accumulation.
One of the main tax benefits of DSTs is that you can delay paying capital gains taxes until you begin receiving distributions from the trust.
Another key benefit of a deferred sales trust vs. a 1031 exchange is that a DST does not restrict the type of investments you can make.
By placing your assets in a deferred sales trust, you can freeze the taxable value of your assets, potentially reducing future estate taxes.
A DST can be structured to provide for future generations while minimizing tax impacts, helping you preserve your family’s wealth over the long term.
With a deferred sales trust, you gain greater control over how and when your money is invested and distributed.
Who Is a Deferred Sales Trust Best for?
A deferred sales trust is an excellent option for anyone who wants to manage large capital gains and their tax implications effectively. For example, business owners planning to sell their companies can benefit significantly as they transition out of business ownership. Many people with investment properties that have significantly appreciated — such as market investments and cryptocurrency — also find deferred sales trusts useful to delay capital gains taxes and reallocate their assets more strategically.
Additionally, those approaching retirement might use DSTs to sell off assets and diversify their investment portfolios without facing immediate tax penalties. Moreover, people who have inherited valuable properties and are considering selling often find deferred sales trusts beneficial for managing potential taxes while planning their financial futures.
DST strategies offer flexible solutions for managing and preserving wealth across different scenarios. Contact 453 Deferred Sales Trust Powered by Pennington Law today to learn how a DST could benefit you.
How Does a Deferred Sales Trust Work and How Is Income Generated?
Deferred sales trusts are 1031 exchange alternatives that allow you to defer taxes while maintaining an income stream from the sale of your property or business. Here’s how it works step-by-step:
You start by transferring your business or property into the trust to set the stage for a sale and future income distribution.
After the transfer, the trust takes over and sells the asset. This step converts your property or business into liquid assets while deferring immediate capital gains tax.
The money obtained from the asset sale is then held within the trust. This preserves the capital and prepares it for investment.
The trust invests these sale proceeds into various investment vehicles to generate a steady return on the investments and allow the trust to pay you. Generally, clients are exposed to investments that mitigate and, most times, eliminate the capital gains tax burden.
Finally, the trust distributes payments to you, the investor, in installments. These payments can be scheduled to meet your financial needs and provide a regular income stream while deferring taxes on capital gains.
What Are the Requirements for a Deferred Sales Trust?
A DST is a powerful tool for deferring taxes on the sale of high-value assets, but it comes with specific requirements you must meet to be eligible for tax deferral. These requirements include the following:
The trust must be managed by a third party who acts in good faith and is legally recognized as independent from you, the seller.
All proceeds from the sale of the asset or assets must be transferred directly to the trust, not to the seller first.
The trust must be established before the sale of the asset(s) to ensure that the transaction qualifies for tax deferral.
The trustee must receive reasonable compensation for managing the trust and the assets within it, in adherence with standard fiduciary rates and practices.
What Assets Are Suitable and Eligible for a DST?
DSTs are versatile tools that can accommodate a variety of assets for those looking to defer capital gains taxes. Here are some types of assets that are typically suitable and eligible for placement in a DST:
Money from the sale of a business can be placed into a DST to allow for tax deferral and reinvestment.
Shares or interests in businesses, whether small or large, can be transferred into a DST.
Commercial, residential, or investment properties are eligible for placement in a DST, which offers a tax-efficient way to handle large property transactions.
Various securities, including stocks and bonds, can be used to fund DSTs, which can provide flexibility in investment strategies.
Digital assets like cryptocurrencies are increasingly accepted as eligible assets for funding DSTs.
A wide range of investment instruments, including mutual funds and government bonds, can be incorporated into DSTs.
Items such as art, antiques, or rare collectibles can also be placed in a DST to protect capital gains as these assets appreciate.
What Our Illinois Deferred Sales Trust Attorneys Can Do
The Illinois deferred sales trust attorneys at 453 Deferred Sales Trust Powered by Pennington Law are here to assist you with every aspect of managing and establishing a DST. When you come to us for help, we start by thoroughly reviewing your financial circumstances and the details of your asset sale. This allows us to understand the full scope of your situation and ensure our approach aligns with your needs.
Next, we discuss your needs and goals in-depth to determine if a deferred sales trust is the best vehicle for your financial strategy. If it is, our attorneys will establish and structure your deferred sales trust as appropriate. This includes setting up the trust in a way that avoids any potential loss of benefits and prevents substantial taxes, penalties, fees, or interest that could arise from an incorrect structure.
Our Illinois deferred sales trust attorneys can tailor the structure of your deferred sales trust to meet your unique goals. These goals might include minimizing tax burdens by spreading out the proceeds of a sale over a schedule or deferring taxes entirely by only paying income from reinvested proceeds. Whatever the case, our attorneys will design a plan that maximizes your benefits and supports your long-term financial health.
Contact an Illinois Deferred Sales Trust Attorney Today
Ready to discover how a deferred sales trust could benefit your financial future in Illinois? Contact 453 Deferred Sales Trust Powered by Pennington Law today for a free initial consultation. An Illinois deferred sales trust lawyer from our firm will be happy to discuss your needs and show you how this strategy could work for you.