623-229-0463 Ohio Deferred Sales Trust Attorney
Are you wondering how to manage the taxes on the sale of a valuable asset? A deferred sales trust (DST) could be the right tool for you. This powerful tax management instrument — which, for many years, was mostly used only by the ultra-wealthy — is “The Tax Tool You Didn’t Know You Had,” and it can open doors to significant tax savings and investment growth opportunities.
These trusts provide a legal, effective way to delay taxes and potentially enhance your financial outcome after selling an asset. Whether you’re selling a business, real estate, or another high-value asset, understanding how to use this tool can make a big difference in your financial planning.
A lawyer from 453 Deferred Sales Trust Powered by Pennington Law can help you set up a deferred sales trust tailored to your needs. Contact us today for a free initial consultation with an Ohio deferred sales trust attorney to discover how we can help you minimize tax burdens and secure your financial future.
Why Choose 453 Deferred Sales Trust Powered by Pennington Law?
When considering strategies to defer capital gains taxes on the sale of an asset, choosing the right partner can make all the difference. At 453 Deferred Sales Trust Powered by Pennington Law, we offer a unique combination of services and experience that sets us apart from the competition. Here’s why working with an Ohio deferred sales trust attorney from our firm could be the best decision you can make for your financial future:
We manage every aspect of your deferred sales trust. From establishing irrevocable trusts to handling professional third-party trustee duties, financial reinvestments, and tax filings, we do it all in-house. While most companies have to coordinate with different professionals at various agencies, our IRS-compliant program handles everything under one roof, simplifying the process and reducing stress for you.
Our team boasts in-depth knowledge and extensive experience in areas critical to maximizing your financial health, including tax law, estate planning, financial advisory, fiduciary matters, insurance, and asset protection. This comprehensive know-how means you receive informed, strategic advice tailored to your unique situation.
Andre Pennington, our lead attorney, is nationally recognized for his profound understanding of tax, trusts, estate planning, and investment services. He has received accolades from prestigious publications and organizations, including The New York Times, Forbes, Inc., The Wall Street Journal, and USA Today. He has also been recognized annually by 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.
Our team excels at securing the full potential value of our clients’ investments. We leverage our experience to ensure that you receive the maximum return on your investments at the final step of the process.
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, a DST is a legal arrangement where you can sell your assets and place the proceeds into a trust before they are taxed. This strategy allows the trust to reinvest the money, potentially growing your wealth over time while you defer capital gains tax.
The following is an overview of the financial benefits of DSTs:
Reinvesting the proceeds from the sale of your assets in a deferred sales trust allows you to take advantage of potential growth opportunities in various investment avenues.
One of the key tax benefits of DSTs is the ability to defer paying capital gains taxes on asset sales and keep more of your money working for you now. 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 benefit of a deferred sales trust vs. a 1031 exchange is that a deferred sales trust can be used for various types of assets.
Placing your assets into a deferred sales trust allows you to freeze the taxable value of the assets, which means less of your estate may be subject to estate taxes.
A deferred sales trust can be structured to benefit your family members after your passing by preserving your accumulated wealth.
DSTs offer flexibility in how and when you receive income from the trust, allowing you to plan your financial future with more control.
Who Is a Deferred Sales Trust Best for?
A deferred sales trust is an excellent option for anyone looking to manage significant financial transitions effectively.
For instance, business owners planning to sell their companies often find deferred sales trusts particularly useful. DSTs allow them to defer capital gains taxes and reinvest sale proceeds strategically. Similarly, those with investment properties that have greatly increased in value — such as market investments and cryptocurrency — can use deferred sales trusts to avoid large immediate tax burdens. A DST can also possibly enhance their returns through diversified investments.
People approaching retirement can also benefit from DSTs, as selling assets through this type of trust helps them diversify their retirement portfolios and reduce reliance on a single asset class. Finally, people who have inherited valuable properties and are considering selling commonly find deferred sales trusts beneficial for managing potential tax impacts while securing their financial futures.
How Does a Deferred Sales Trust Work and How Is Income Generated?
DSTs are 1031 exchange alternatives that allow you to defer taxes while still generating income from the sale of your assets, such as properties or businesses. Here’s how DST strategies typically work:
- Transfer of Property or Business to the Trust – Initially, you transfer the property or business you want to sell to a trust to set the stage for all subsequent actions.
- Trust Sells the Asset – Once the trust owns the asset, it sells it to a buyer. This sale is managed by the trust, and the trust then holds the proceeds from this sale.
- Sale Proceeds Held in Trust – After the sale, the money from selling the asset is kept within the trust. This separation from your personal finances is what helps postpone the capital gains tax.
- Investment of Proceeds – Next, the trust invests the proceeds from the sale. These investments can range from stocks and bonds to real estate, depending on the terms of the trust agreement. Generally, clients are exposed to investments that mitigate and, most times, eliminate the capital gains tax burden.
- Installment Payments to the Investor – Finally, you receive payments from the trust over a period of time, providing a steady income stream while potentially keeping you in a lower tax bracket. 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 the process is legally compliant and effective. The following is a brief overview of what’s needed:
You must establish the trust with a third party who acts as the trustee and is not related to you to maintain the trust’s legitimacy.
All proceeds from the sale of the asset must be transferred directly to the trust, bypassing your personal accounts to qualify for tax deferral.
The trust must be formed before the sale of the asset to ensure the arrangement complies with tax laws and regulations.
The trustee must receive reasonable compensation for their services to ensure the trust operates effectively and maintains its integrity.
What Assets Are Suitable and Eligible for a DST?
A deferred sales trust can be a versatile tool for deferring capital gains taxes while still generating income on the sale of various types of assets. Assets that are suitable and eligible for inclusion in a DST include:
Proceeds from the sale of a business can be placed into a DST.
Shares or interests in businesses, whether privately held or part of a partnership, can be transferred into a DST.
Real estate holdings, including residential and commercial properties, are common assets managed through DSTs.
Marketable securities such as stocks and bonds can be placed into a DST.
As a newer asset class, cryptocurrencies such as Bitcoin can also be managed through DSTs.
A DST can include various financial instruments, including stocks and bonds.
Items like art and collectibles that have appreciated in value can be included in a DST.
What Our Ohio Deferred Sales Trust Attorneys Can Do
Our Ohio-based deferred sales trust attorneys are equipped to assist you through every step of setting up a deferred sales trust. We start by reviewing your financial circumstances along with the specifics of your asset sale to ensure this strategy aligns with your situation. Understanding your individual needs and goals is critical, and our attorneys are skilled at discerning whether a deferred sales trust is the best financial tool for you.
Once it’s clear that a deferred sales trust is suitable, our attorneys take charge of creating the trust. Our careful approach is essential to secure the trust’s tax advantages and avoid any potential losses due to taxes, penalties, fees, or interest that could arise from errors in setup.
We meticulously structure your deferred sales trust to meet your specific objectives. This could include arranging the payout of sale proceeds over a schedule that strategically minimizes your tax burdens. Alternatively, we can set up the trust to defer taxes entirely by arranging for you to receive only income generated from the reinvested proceeds, which can maximize your financial benefits.
Contact an Ohio Deferred Sales Trust Attorney Today
Want to keep more of the money from your asset sales? 453 Deferred Sales Trust Powered by Pennington Law is here to help you. Contact us today to schedule a free initial consultation with an Ohio deferred sales trust lawyer from our firm, and you’ll discover how a DST can maximize your financial resources.