623-229-0463 North Carolina Deferred Sales Trust Attorney
Are you planning to sell a high-value asset and wondering how to minimize your tax obligations? A deferred sales trust (DST) could be the instrument you need. Many people aren’t aware of deferred sales trusts, traditionally used by the ultra-wealthy to manage taxes efficiently. Think of it as “The Tax Tool You Didn’t Know You Had” — now available to help you keep more of your hard-earned money.
A lawyer from 453 Deferred Sales Trust Powered by Pennington Law can help you understand how this tool can fit into your financial plans and handle the process of establishing your trust. Our team is ready to review your situation and discuss how a deferred sales trust might be a good fit for your needs. Contact us today for a free initial consultation with a North Carolina deferred sales trust lawyer, and discover how a DST can be the smart choice for your financial future.
Why Choose 453 Deferred Sales Trust Powered by Pennington Law?
Choosing 453 Deferred Sales Trust Powered by Pennington Law means working with a team that handles all of your trust needs professionally and efficiently in one place. Unlike many companies that coordinate with various other agencies to set up irrevocable trusts, engage trustees, manage reinvestments, and handle tax filings, we provide a comprehensive, IRS-compliant service in-house. We manage everything under one roof to streamline the process and reduce complexity for you.
Our North Carolina attorneys possess a wealth of knowledge and experience across critical areas like tax law, estate planning, financial advisory, fiduciary matters, insurance, and asset protection. This comprehensive background allows us to provide a seamless and effective service tailored to your unique needs.
Andre Pennington, principal attorney at our firm, is nationally recognized for his in-depth understanding and significant accomplishments in tax, trusts, estate planning, and investment services. He has been featured in major publications such as The New York Times, Forbes, Inc., The Wall Street Journal, and USA Today. Additionally, his professional excellence is regularly acknowledged in the annual Super Lawyers, Lawyers of Distinction, and Best Attorneys in America lists. Our practice was also recognized as the Best Deferred Sales Trust Law Firm in the U.S. of 2024 by Best of the Best.
When you partner with us, we work tirelessly to ensure that you receive the maximum value from your investments. Our strategic approach focuses on increasing returns at the final step of the investment process, which is essential for anyone who has put effort into building a business or acquiring valuable assets. With 453 Deferred Sales Trust Powered by Pennington Law, you gain a reliable partner committed to achieving the most favorable outcomes possible for your hard work.
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 legal arrangement that allows you to defer capital gains tax on the sale of an asset. It works by transferring the asset to a trust before the sale and allowing the trust to sell the asset. Then, the funds from the sale are placed into the trust and can be reinvested, allowing you to defer capital gains taxes and possibly reduce your tax burden over time.
Some of the financial benefits of DSTs include the following:
The funds in the trust can be reinvested into a variety of assets.
One of the tax benefits of DSTs is the ability to delay paying capital gains taxes until you start receiving distributions 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.
Another advantage of a deferred sales trust vs. a 1031 exchange is that a deferred sales trust offers more flexibility in reinvestments.
The value of the asset transferred to the trust is locked in for estate tax purposes at the time of the transfer, potentially reducing future estate taxes.
A deferred sales trust can be structured to provide for future generations and preserve wealth within your family.
You have the ability to plan the timing and amount of distributions, which can be tailored to your personal financial needs and goals.
Who Is a Deferred Sales Trust Best for?
A deferred sales trust is ideal if you are planning significant changes to your investment or asset portfolios. These trusts offer numerous strategic advantages for managing and planning long-term financial and estate goals.
For example, business owners considering selling their companies can benefit greatly from DSTs. These trusts allow them to defer capital gains taxes, which can be particularly high following the sale of a successful business. Similarly, those who own investment properties that have significantly appreciated in value — such as market investments and cryptocurrency — often find DSTs useful for managing potential tax impacts upon sale.
People approaching retirement also often find DSTs beneficial since they allow you to sell off assets and diversify portfolios in a tax-efficient manner. Additionally, beneficiaries who have inherited valuable properties and are looking to sell can use DSTs to avoid large immediate tax liabilities, thus preserving more inherited wealth.
How Does a Deferred Sales Trust Work and How Is Income Generated?
DSTs are 1031 exchange alternatives that work by first transferring your property or business into a trust before any sale takes place. This legal arrangement allows the trust to then sell the asset, keeping the proceeds within the trust rather than transferring them directly to you.
Here’s a closer look at how DST strategies work:
- Transfer of Property or Business to the Trust – You transfer the asset you want to sell into the trust to separate the asset from your direct ownership.
- Trust Sells the Asset – The trust then sells the property or business to minimize the immediate tax implications for you.
- Sale Proceeds Held in Trust – Instead of the sale proceeds coming directly to you, they are held within the trust to defer taxes.
- Investment of Proceeds – The trust then invests the proceeds from the sale into various investment vehicles according to the trust agreement to grow the trust’s balance. This allows you to grow the proceeds through various investment strategies while still deferring and, most times, eliminating capital gains tax consequences.
- Installment Payments to the Investor – Finally, the trust makes installment payments to you, the original asset owner, according to a predetermined schedule. 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?
A deferred sales trust must meet specific conditions to be a valid and effective tool for deferring taxes and managing asset sales. Here are the key requirements for establishing a deferred sales trust:
The trust must be managed by an independent third party who acts as the trustee and is not related to you.
All proceeds from the sale of the asset must be transferred directly to the trust, not to the original owner.
The trust must be set up before the asset is sold to ensure the transaction qualifies for tax deferral.
The trustee must receive compensation for managing the trust to ensure professionalism and compliance with legal standards.
What Assets Are Suitable and Eligible for a DST?
A DST can accommodate a diverse range of assets, providing flexibility and opportunities for tax deferral and investment growth. Here’s a list of assets that are typically suitable and eligible for a DST:
Proceeds from the sale of a business can be placed into a DST.
Shares or interests in a business can be transferred into a DST before sale.
Commercial and residential properties are common assets placed into DSTs.
Marketable securities, such as stocks and bonds, are eligible for transfer into a DST.
Digital assets like Bitcoin and Ethereum can also be managed through a DST.
A wide range of financial instruments, including stocks and bonds, can be included in a DST.
Items such as art, antiques, and other collectibles can be sold under a DST arrangement.
What Our North Carolina Deferred Sales Trust Attorneys Can Do
Our North Carolina deferred sales trust lawyers are here to guide you through every step of the process of managing your asset sale. Initially, we will discuss your personal needs and goals to ascertain whether a deferred sales trust is the right financial tool for you. If a DST is suitable for your circumstances, we will review your financial situation to align our approach with the best practices and legal requirements for a DST.
Next, our attorneys will take the necessary steps to establish your DST correctly. This precision is key to preserving the trust’s tax benefits and avoiding any unnecessary taxes, penalties, fees, or interest. We pay close attention to every legal detail to ensure your trust meets all regulatory standards.
We will also work diligently to structure your deferred sales trust to meet your unique goals. Whether it’s paying out sale proceeds over a schedule that minimizes tax burdens or deferring taxes by only paying income from reinvested proceeds, our team tailors the trust structure to optimize your financial outcomes. This personalized approach allows you to maximize the financial benefits of your deferred sales trust and makes it a powerful tool in your financial planning arsenal.
Contact a North Carolina Deferred Sales Trust Attorney Today
Interested in exploring how a deferred sales trust can benefit you? Contact 453 Deferred Sales Trust Powered by Pennington Law today. Our North Carolina deferred sales trust attorneys are here to discuss your specific needs and how we can help you achieve your financial goals. Take the first step toward smarter asset management and tax planning now by contacting us for your free initial consultation.