623-229-0463 Missouri Deferred Sales Trust Attorney
Are you aware of all the tools available to manage capital gains taxes on your assets? While deferred sales trusts might sound like something reserved for the ultra-wealthy, anyone can use them to defer taxes and plan for the future more effectively. You can think of deferred sales trusts more like “The Tax Tool You Didn’t Know You Had.”
A lawyer from 453 Deferred Sales Trust Powered by Pennington Law can provide the guidance you need to appropriately set up and manage a deferred sales trust. We will review your situation, discuss your financial goals, and help you utilize a deferred sales trust to its fullest potential.
If you’re considering selling an asset and want to understand how a deferred sales trust can benefit you, contact us today for a free initial consultation. Discover how a Missouri deferred sales trust lawyer from our firm can support your financial goals and help you manage your asset sales effectively.
Why Choose 453 Deferred Sales Trust Powered by Pennington Law?
If you’re considering strategies for managing capital gains taxes, selecting the right legal team to handle your deferred sales trust is essential. At 453 Deferred Sales Trust Powered by Pennington Law, we offer a first-class service that is both comprehensive and effective. Here’s why you should choose our firm to help you safeguard and grow your wealth:
We manage every aspect of your deferred sales trust. Unlike most firms that outsource multiple professionals from different agencies, we provide a seamless, IRS-compliant program in-house. From setting up irrevocable trusts and managing trustee duties to handling financial reinvestments and tax filings, we take care of everything.
Our team possesses extensive knowledge and experience across a variety of relevant fields, including tax law, estate planning, financial advisory, wealth and fiduciary matters, insurance, and asset protection. This diversity in experience enables us to cover all angles of your financial planning under one roof.
Andre Pennington, our principal attorney, is nationally recognized for his experience in tax, trusts, estate planning, and investment services. He has been featured in prominent publications like The New York Times, Forbes, Inc., The Wall Street Journal, and USA Today. Additionally, he is recognized consistently on esteemed lists like 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 are committed to maximizing the value of your investments. We understand the importance of each dollar and work diligently to ensure that your hard-earned money yields the highest possible returns at every step of the investment process.
What Is a Deferred Sales Trust and What Are Its Benefits?
So, what is a deferred sales trust (DST)? Also known as an installment sale trust, a DST is a type of legal arrangement that allows you to sell an asset and defer capital gains tax on the sale. Using a deferred sales trust involves transferring the asset to the trust before a sale, which provides several financial advantages that can help you manage and grow your wealth effectively. Here are some of the primary financial benefits of DSTs:
A deferred sales trust can reinvest the proceeds from an asset sale into other income-generating investments to grow your wealth.
One tax benefit of DSTs is that they allow you to defer paying taxes on your capital gains, which means you retain more money for investment. 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.
Another advantage of a deferred sales trust vs. a 1031 exchange is that a deferred sales trust has fewer restrictions on reinvestment options.
By transferring your asset into a trust, the value of your estate can be frozen for tax purposes, potentially reducing future estate taxes.
A deferred sales trust can preserve your wealth for future generations in a tax-efficient manner.
With a DST, you gain more control over the timing of the income from a sale, which can be strategically important for financial goals.
Who Is a Deferred Sales Trust Best for?
A deferred sales trust can benefit anyone who stands to incur significant capital gains taxes from the sale of valuable assets.
For example, business owners planning to sell their companies find these trusts particularly beneficial as they allow them to defer taxes and reinvest the proceeds into retirement savings or other ventures. Similarly, people with investment properties that have greatly appreciated in value — such as market investments and cryptocurrency — can use deferred sales trusts to avoid large immediate tax bills and strategically plan their financial futures.
Those approaching retirement often find DSTs advantageous for selling off assets to diversify their investment portfolios and secure their finances as they transition into their non-working years. Finally, people who inherit valuable properties and wish to sell them can benefit from DSTs when it comes to managing potential taxes more effectively and maximizing their inheritances.
The tax benefits of DSTs are incomparable, and we’d love to tell you more about them in a free, no-obligation consultation.
How Does a Deferred Sales Trust Work and How Is Income Generated?
A deferred sales trust is a strategic tool that allows you to defer capital gains taxes by temporarily transferring your property or business to a trust before selling it. These 1031 exchange alternatives allow you to defer taxes and generate investment income over time. Here’s how DST strategies work:
Initially, you transfer ownership of the asset you want to sell into a trust to facilitate the eventual tax deferral.
Once the trust holds the asset, it then proceeds to sell it. This sale is managed by the trust, not directly by you, which is essential for the tax deferral process.
After the sale, the proceeds from selling the asset are held within the trust and managed according to the trust agreement.
The trust invests these proceeds in various assets or financial instruments according to the trust’s investment strategies. This allows you to grow the proceeds through various investment strategies while still deferring and, most times, eliminating capital gains tax consequences.
Based on the agreement set forth in the trust, you receive payments from the trust in installments, which can provide a regular income stream. 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?
Setting up a deferred sales trust involves meeting specific requirements to ensure that the trust is valid and complies with tax laws. These requirements are designed to protect your interests and maximize the benefits of the trust. Here are the main requirements:
The trust must be a legitimate, third-party entity, meaning it cannot be owned or controlled by you or anyone with a direct personal or financial relationship to you.
All proceeds from the asset sale must go directly into the trust. This is crucial for tax deferral, as it separates the income from your immediate access and use.
The trust must be established before the asset sale to ensure that the trust legally owns the asset when the sale occurs. This is a requirement for tax deferral.
The trustee managing the trust must receive compensation for their services to ensure they handle their responsibilities professionally and per legal standards.
What Assets Are Suitable and Eligible for a DST?
A deferred sales trust can be a versatile tool for those looking to defer capital gains taxes on a variety of assets. Here’s a look at the types of assets that are commonly placed into a DST:
If you sell a business, the proceeds from that sale can be placed into a DST, allowing you to defer taxes and potentially reinvest those funds into other ventures.
Shares or interests in a company, whether it’s a corporation, partnership, or limited liability company, can also be transferred into a DST.
Properties, whether commercial or residential, are often suitable for DSTs, making them a popular choice for real estate investors looking to manage taxes from large gains.
Various securities, including publicly traded stocks and bonds, can go into a DST.
Given their high volatility and potential for sizable gains, cryptocurrencies can also be placed into a DST to manage potential tax implications.
Besides direct securities, other types of investment instruments can also be eligible for a DST.
Items like art, antiques, or other valuable collectibles can be placed into a DST to handle proceeds from their sale in a tax-efficient manner.
What Our Missouri Deferred Sales Trust Attorneys Can Do
Our Missouri deferred sales trust attorneys are here to guide you through every step of the trust creation process and ensure that your financial decisions align with your long-term goals.
First, our attorneys will discuss your goals and explain how a deferred sales trust could benefit your specific situation. This initial assessment helps us to identify whether a deferred sales trust is a suitable tool for your needs. If we determine that it is, we will thoroughly review your financial circumstances and the details of your asset sale. Then, we will establish and structure the trust correctly to preserve its tax benefits and avoid unnecessary penalties, fees, or interest.
Depending on your objectives, our Missouri deferred sales trust lawyers could arrange for the trust to pay sale proceeds over a schedule that reduces your tax burden. We can also help you defer taxes entirely by ensuring you only receive income generated from reinvested proceeds.
Contact a Missouri Deferred Sales Trust Attorney Today
Ready to take control of your financial future? Contact 453 Deferred Sales Trust Powered by Pennington Law today for a free consultation. Discover how a DST can work for you and help you manage your asset sales with confidence.