623-229-0463 Indiana Deferred Sales Trust Attorney
Are you looking to sell a high-value asset without facing a huge tax bill immediately? A deferred sales trust could be the answer. Many people are unaware of these, as the ultra-wealthy have historically utilized them, but anyone can take advantage of a deferred sales trust. It can open up new possibilities for your financial planning, allowing you to defer taxes and optimize your asset management. You can think of it “The Tax Tool You Didn’t Know You Had.”
Understanding and utilizing a deferred sales trust can seem complicated, but it doesn’t have to be. The team at 453 Deferred Sales Trust Powered by Pennington Law is here to guide you through each step of the process. We can help you set up a deferred sales trust that aligns with your financial objectives and maximizes your benefits while complying with legal requirements.
Take the first step toward smarter asset management now. Contact us for your free initial consultation with an Indiana deferred sales trust attorney to discover how a deferred sales trust can work for you.
Why Choose 453 Deferred Sales Trust Powered by Pennington Law?
When it comes to securing your financial future, choosing the right strategy to manage the proceeds from the sale of your business or asset is essential. At 453 Deferred Sales Trust Powered by Pennington Law, we offer a comprehensive service that distinguishes us from other firms.
Here’s why you should consider our deferred sales trust services:
We manage every aspect of the deferred sales trust process. Unlike other companies that might rely on multiple professionals from different agencies, we provide an IRS-compliant, all-inclusive service. Our team handles irrevocable trusts, professional third-party trustee duties, financial reinvestments, and tax filings all under one roof.
Our team boasts a diverse range of experience. We have lawyers who focus on tax law, estate planning, financial advisory, wealth and fiduciary matters, insurance, and asset protection. This comprehensive knowledge allows us to cover all bases when it comes to managing your trust effectively.
Andre Pennington, our principal attorney, is nationally recognized for his deep understanding of tax, trusts, estate planning, and investment services. His mastery has been highlighted in prestigious publications such as The New York Times, Forbes, Inc., The Wall Street Journal, and USA Today. Additionally, he is consistently featured in the annual Super Lawyers, Lawyers of Distinction, and Best Attorneys in America. Our practice was also recognized as the Best Deferred Sales Trust Law Firm in the U.S. of 2024 by Best of the Best.
We excel at maximizing investment value for our clients. Our strategic approach is focused on realizing the full potential of your investments and honoring the hard work you’ve invested in building your business.
What Is a Deferred Sales Trust and What Are Its Benefits?
So, what is a deferred sales trust (DST)? Also called an installment sale trust, a DST is a legal arrangement that allows you to defer capital gains taxes when selling your assets. This arrangement involves transferring your assets to a trust before a sale. The trust then sells the asset and uses the proceeds to pay you over time. Here are some of the key financial benefits of DSTs:
A deferred sales trust can reinvest the proceeds from a sale into various investments, potentially increasing your wealth over time through accrued earnings.
One of the main tax benefits of DSTs is the ability to spread out capital gains taxes over several years, which can significantly lower your immediate tax burden.
Another advantage of a deferred sales trust vs. a 1031 exchange is that a DST does not restrict the types of investments you can make.
Placing your assets in a deferred sales trust can effectively freeze the value of your estate for tax purposes at the time of the transfer, potentially reducing future estate taxes.
A deferred sales trust can preserve your wealth for future generations and provide stable, long-term financial security for your family.
With a DST, you can control the timing and amount of distributions, which provides greater flexibility in managing your financial future.
Who Is a Deferred Sales Trust Best for?
A deferred sales trust is an excellent tool for anyone managing significant financial transitions. It is particularly beneficial for business owners who are planning to sell their companies and want to defer capital gains taxes while maintaining some income from the proceeds.
Similarly, people with investment properties that have appreciated significantly — such as real estate, market investments, and cryptocurrency — can use a DST to manage the sale of their assets, avoid large immediate tax hits, and reinvest funds more flexibly.
For those approaching retirement, this type of trust offers a way to sell off assets and diversify portfolios, securing a more stable financial future without the burden of heavy taxes. Additionally, people who have inherited valuable properties and are looking to sell them can benefit from a DST, as it allows them to stagger the tax impact of their gains.
How Does a Deferred Sales Trust Work and How Is Income Generated?
Deferred sales trusts are 1031 exchange alternatives that offer a strategic way to manage the sale of an asset like a business or property. DST strategies involve several steps, including the following:
- Transfer of Property or Business to the Trust – You start by transferring the asset you want to sell, whether it’s a piece of property or your business, to a trust specifically set up for this purpose.
- Trust Sells the Asset – Once the trust holds the asset, it then proceeds to sell it. This sale is managed by the trust, not by you personally.
- Sale Proceeds Held in Trust – After the sale, the proceeds from the asset are held within the trust instead of being distributed to you immediately. This allows you to defer capital gains taxes.
- Investment of Proceeds – The money from the sale, now within the trust, is then invested. These investments can vary and are managed according to the terms of the trust to generate growth. You can grow the proceeds through various investment strategies while still deferring and, most times, eliminating capital gains tax consequences.
- Installment Payments to the Investor – As the investments generate income, the trust can make periodic installment payments to you, which can be structured to suit your financial needs. 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?
You must meet specific requirements when setting up a deferred sales trust to ensure the arrangement complies with tax laws and serves its intended purpose. Here are the key requirements necessary for the effective functioning of the trust:
The trust must be a bona fide third-party trust. This means it should be legally recognized and managed by an independent trustee unrelated to you. The trustee is responsible for managing the trust’s assets and complying with all legal and tax obligations.
After the sale of your asset, the proceeds must be transferred directly to the trust. This transfer is essential for the deferral of capital gains taxes.
The trust must be established before the sale of the asset to ensure that it can legally take ownership of the asset and handle the sale.
The trustee managing the trust must receive appropriate compensation for their services, typically a percentage of the trust’s assets.
What Assets Are Suitable and Eligible for a DST?
A deferred sales trust (DST) can be an ideal solution for individuals looking to defer taxes from the sale of various high-value assets. Here are some examples of the types of assets you can place into a DST:
Proceeds from the sale of a business can be placed into a DST, allowing you to defer taxes while still receiving income through trust disbursements.
Shares or interests in a business, whether it’s a corporation, partnership, or limited liability company, are eligible for transfer into a DST.
Real estate holdings can be sold with the proceeds going into a DST, which is particularly useful for real estate investors looking to exit a property.
Various securities, including publicly traded stocks, can be sold and the proceeds can be transferred to a DST.
With the increasing acceptance of digital currencies, proceeds from the sale of cryptocurrencies can also be placed into a DST.
A wide range of financial instruments, including stocks and bonds, are suitable for a DST.
Items like art, antiques, and other collectibles can be sold, and the proceeds can be funneled into a DST.
What Our Indiana Deferred Sales Trust Attorneys Can Do
Our Indiana deferred sales trust attorneys are dedicated to helping you manage and sell your high-value assets without incurring unnecessary tax burdens.
When you come to us for help, our attorneys will discuss your financial goals and personal needs to determine whether a deferred sales trust is the ideal tool for achieving your objectives. If a deferred sales trust fits your situation, we will review your financial circumstances and the details of your asset sale to understand your situation and tailor our approach to your needs.
We will take care to establish your trust correctly and avoid losing the trust’s tax benefits or incurring unnecessary penalties, fees, or interest. Moreover, we will structure your deferred sales trust to align with your specific goals.
Whether you aim to minimize tax burdens by paying out sale proceeds over a schedule or defer taxes entirely by only paying income from reinvested proceeds, our team has the know-how to set it up effectively and maximize your financial benefits.
Contact an Indiana Deferred Sales Trust Attorney Today
Don’t let huge tax burdens diminish the rewards of your hard work. Discover how an Indiana deferred sales trust lawyer can help secure your financial future. Contact 453 Deferred Sales Trust Powered by Pennington Law today for a free, no-obligation consultation.