623-229-0463 Kentucky Deferred Sales Trust Attorney
It’s frustrating to lose much of the profits you make from selling an appreciated asset to capital gains taxes. What you may not know is that there’s a proven method for keeping more of your profits and maximizing your investment in these situations: a deferred sales trust. The ultra-wealthy in Kentucky and beyond have used DSTs as a tax avoidance strategy for many years — and you can now benefit from “The Tax Tool You Didn’t Know You Had.”
At 453 Deferred Sales Trust Powered by Pennington Law, we know all about advanced tax tools that help individuals and families keep more of their wealth. In fact, our practice was recognized as the Best Deferred Sales Trust Law Firm in the U.S. of 2024 by Best of the Best. With a Kentucky deferred sales trust attorney from our practice on your side, we can do all the legal work to establish and manage a DST while exploring other strategies to make the most of your investments.
Want to learn more? Contact us today for a free, no-obligation consultation to discover the tax and financial benefits of DSTs.
Why Choose 453 Deferred Sales Trust Powered by Pennington Law?
453 Deferred Sales Trust Powered by Pennington Law is your trusted partner for comprehensive deferred sales trust services. While many companies make you juggle multiple professionals for trust creation, reinvestment strategies, and tax strategies, we’ve simplified the process by offering an IRS-approved solution that brings every aspect together under one roof. This all-in-one approach makes it easier for you to maximize the financial benefits of DSTs.
Our team has deep experience across a range of complex disciplines, including tax law, estate planning, asset protection, financial consulting, and insurance. This well-rounded foundation helps us craft strategies tailored to your unique needs, whether you’re transitioning from a business sale, real estate, or other high-value assets.
Additionally, firm founder Andre Pennington has earned national recognition for his expertise in tax and financial planning. Publications that have highlighted his work include The Wall Street Journal, Forbes, The New York Times, and USA Today. Pennington also has received accolades from Super Lawyers, Lawyers of Distinction, and Best Attorneys in America. Clients frequently praise his ability to simplify complicated legal processes and deliver exceptional results.
You’ve poured years of time and effort into creating your wealth. With our team’s support, you can increase the return on your investments while planning confidently for your future.
What Is a Deferred Sales Trust, and What Are Its Benefits?
Let’s start with the basics: What is a deferred sales trust? A DST, sometimes called an installment sale trust, is a financial strategy designed to help you defer capital gains tax when you sell a significant asset. This approach protects your wealth while offering reinvestment opportunities tailored to your needs.
Some key advantages of using DSTs include the following:
By deferring capital gains taxes on your investments, a DST can help you reinvest the proceeds into a portfolio that aligns with your long-term financial objectives.
The tax benefits of DSTs can be significant. A DST lets you keep more of your sale proceeds working for you, delaying payment of capital taxes until you choose to withdraw funds from 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.
A DST is not limited to real estate, and it eliminates the rigid timelines associated with 1031 exchanges. This is just one benefit of a deferred sales trust vs. a 1031 exchange.
By freezing the value of your estate, a DST can help you minimize estate taxes and simplify the process of transferring wealth to your heirs.
Because a DST minimizes the taxes you must pay when selling a highly appreciated asset, it helps ensure that your hard-earned wealth remains intact and available for future generations.
Finally, a DST lets you decide how and when to reinvest the proceeds from selling highly appreciated assets, offering more options to adapt to life’s changes.
Who Is a Deferred Sales Trust Best For?
DSTs work well for people and families in Kentucky facing many different financial challenges, such as:
Entrepreneurs who sell their businesses can use a deferred sales trust to manage the tax impact while reinvesting proceeds for future growth. This approach maximizes liquidity and minimizes unnecessary losses.
A DST is ideal for people whose investments (such as real estate, market investments, and cryptocurrency) have significantly increased in value. Selling through a DST allows them to defer taxes, providing more flexibility to diversify or reinvest.
People nearing retirement may need to switch investing in high-risk assets to more stable options. Using a DST, they can sell current investments without triggering a large tax bill to help ensure their portfolio meets their long-term needs.
Finally, people who inherit high-value assets often want to turn them into cash for other purposes. A DST helps beneficiaries manage their tax obligations while preserving more of the inheritance to support personal financial goals.
How Does a Deferred Sales Trust Work, and How is Income Generated?
There are complicated rules surrounding DSTs in Louisiana, so it’s crucial to work with a knowledgeable attorney when setting one up. Here are the basic steps of how DSTs work and generate income for you:
First, you transfer your asset (real estate, a business, cryptocurrency, high-value collectibles, etc.) into the trust. This step allows for a tax-deferred sale.
After the transfer, the trust handles the sale of the asset to a buyer. This process avoids triggering immediate capital gains taxes for you.
The funds from the sale remain within the trust, preventing a taxable event while keeping the proceeds secure.
Next, the trustee reinvests the funds into diversified financial products to generate returns that align with your financial objectives. This allows you to grow the proceeds through various investment strategies while still deferring and, most times, eliminating capital gains tax consequences.
Throughout the process, you receive periodic payments from the trust. By spreading out your income over time, your capital gains tax liability also will spread — and, most times, be minimized — while you continue to build wealth.
What Are the Requirements for a Deferred Sales Trust?
One vital reason to work with a Kentucky deferred sales trust lawyer is that an attorney can help you make sure your trust meets the federal rules. If you don’t work with a lawyer who understands DST strategies, you might run into trouble with the IRS or lose some of the value in your investment.
The requirements for DSTs in Kentucky include the following:
The trust must be a valid entity operated by an independent trustee for the trust to meet federal tax regulations.
All funds from the asset’s sale must be deposited into the trust for you to avoid immediate capital gains taxes on the transaction.
You must set up the trust before finalizing the sale of your asset. Without this step, the transaction won’t qualify for deferred tax treatment.
Finally, the parties overseeing the trust must receive fair compensation for their services. Proper payment maintains the trust’s legitimacy under IRS rules.
What Assets Are Suitable and Eligible for a DST?
Some high-value assets that may be suitable and eligible for a DST in Kentucky include:
- Business Ownership Interests
- Securities
- High-Value Collectibles
- Real Estate
- Stocks, Bonds, and Other Investments
- Business Sale
- Cryptocurrency
What Our Kentucky Deferred Sales Trust Attorneys Can Do
Our attorneys are here to simplify the complex process of establishing a deferred sales trust while helping you achieve your financial goals. We begin by reviewing your financial situation and the details of whatever asset you wish to sell. Understanding your tax exposure, asset value, and cost basis allows us to determine whether a DST or other 1031 exchange alternatives could provide meaningful benefits for your circumstances.
After assessing your financial landscape, we’ll spend time learning about your specific goals. Whether you aim to reinvest the proceeds from your asset sale, secure a steady income stream, or pass wealth to the next generation, we’ll explain how a DST can help you achieve these objectives. Tailoring our advice to your priorities helps us create a trust that works for your best interests.
DSTs must comply with strict IRS rules. Any errors in the drafting and implementation of the DST could trigger unexpected capital gains taxes or, worse, legal penalties. Our team can protect you from the sort of costly mistakes that can put you in financial or legal jeopardy.
Lastly, we’ll structure your trust to match your personal needs and future plans. Our comprehensive approach gives you confidence that your DST is designed to preserve and grow your wealth effectively.
Contact a Kentucky Deferred Sales Trust Attorney Today
A DST can make a big difference in your financial security, but only if it is set up and managed properly. The Kentucky deferred sales trust lawyers at 453 Deferred Sales Trust Powered by Pennington Law create the legally viable trust you need to protect your wealth and prepare for the future. Reach out to us today for a free, no-obligation consultation.