Oklahoma Deferred Sales Trust Attorney

Capital gains taxes can put a big dent in the profits you make when selling real estate, your ownership stake in a business, or other highly appreciated assets like cryptocurrency. But what if you had a way to reduce this tax burden while also generating potential investment revenue? A deferred sales trust, or DST, is “The Tax Tool You Didn’t Know You Had.” That’s because it lets you defer the capital gains tax on your investments, letting you spread your tax liability over time while also reinvesting the profits.

At 453 Deferred Sales Trust Powered by Pennington Law, we believe in helping individuals and families in Oklahoma take advantage of tax strategies that the ultra-wealthy have long had access to. Our Oklahoma deferred sales trust lawyers can explain how DSTs work, establish and oversee your trust on your behalf, and provide advice on maximizing the proceeds from your investments. Call now or complete our contact form for a free, no-obligation consultation to learn more about the advantages of DSTs.

Why Choose 453 Deferred Sales Trust Powered by Pennington Law?

If you’re not careful with your deferred sales trust, you may run into trouble with the IRS or fail to make the most of your investment. Here are a few reasons to choose our skilled and experienced team to manage your DST in Oklahoma:

  • Our experienced team is your one-stop solution for deferred sales trusts. We manage irrevocable trusts, trustee duties, reinvestment, and tax matters and strategies, all within an IRS-compliant framework. While others rely on multiple agencies, we offer all the DST services you need under one roof.
  • Firm founder Andre Pennington’s work has earned widespread praise from clients and recognition in publications like The New York Times, Forbes, Inc., The Wall Street Journal, and USA Today. He’s also listed in Super Lawyers, Lawyers of Distinction, and Best Attorneys in America for his legal services. 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 help clients like you maximize the value of your assets. Your years of effort deserve a solution designed to protect and grow your hard-earned wealth.
  • With in-depth experience in tax law, estate planning, financial advisory, insurance, fiduciary responsibilities, and asset protection, our team can make sure every detail of your DST aligns with your financial and estate goals.

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 tax-planning tool that lets you sell appreciated assets while deferring capital gains taxes. This strategy is ideal for reinvesting proceeds to build long-term wealth.

The financial benefits of DSTs include the following:

The tax benefits of DSTs are substantial, as these instruments allow you to defer capital gains taxes. With these savings, you can reinvest more money and expand your financial portfolio. 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 promotes asset diversification and reinvestment opportunities, helping your wealth grow through strategic planning.

Many people ask us about deferred sales trusts vs. 1031 exchanges, and we contend that a DST is the better option in most circumstances. A DST is more flexible than a 1031 exchange because it doesn’t restrict you to like-kind investments, allowing for diverse financial strategies.

A DST shields your assets to guard your family’s financial well-being. It’s a proactive way to protect and grow your legacy.

With a DST, you can lock in the value of your estate. This freeze can help minimize future estate tax liabilities for your heirs.

Lastly, a DST gives you the power to structure payments and investments to meet your unique goals, offering freedom in your financial decisions.

Who Is a Deferred Sales Trust Best For?

Deferred sales trusts, along with other 1031 exchange alternatives, can fit people in a range of financial situations, such as:

If you’re selling a business you’ve worked hard to build, a DST lets you defer capital gains taxes and receive payments from the trust over time. This strategy reduces your immediate tax liability while improving your financial stability.

A DST allows you to sell highly appreciated properties without facing a large, immediate tax bill. This approach can provide flexibility for reinvesting the proceeds from selling such property as real estate, market investments, and cryptocurrency.

If you’re nearing retirement, a DST can help you sell appreciated assets while avoiding a significant tax burden. You can use the proceeds to diversify your portfolio and plan for a more secure retirement.

Inheriting valuable property can be a financial blessing, but selling it often creates tax challenges. A DST can help you manage these taxes while protecting the value of your inheritance.

How Does a Deferred Sales Trust Work, and How Is Income Generated?

If you have questions about how deferred sales trusts work and generate income, don’t worry; you’re not alone. Here are the basic steps of how a deferred sales trust can increase your wealth:

  1. Transfer of Property or Business to the Trust – First, the asset’s owner transfers the property, business, or investment into the deferred sales trust, shifting ownership to the trust.
  2. Trust Sells the Asset – Next, the trust sells the asset to a buyer, which prevents the owner from directly receiving the funds and triggering immediate capital gains taxes.
  3. Sale Proceeds Held in Trust – The trust holds the proceeds from the sale, deferring taxes for the asset’s original owner and keeping the funds available for reinvestment.
  4. Proceeds Invested – Once the sale is complete, the trustee (the person or entity who manages the trust) strategically reinvests the funds into diversified assets like stocks, real estate, or other opportunities to generate income for the asset’s original owner. This allows you to grow the proceeds through various investment strategies while still deferring and, most times, eliminating capital gains tax consequences.
  5. Installment Payments to the Investor – Finally, the trust makes scheduled payments to the original owner, allowing them to enjoy a steady income while deferring taxes over time. 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?

An Oklahoma deferred sales trust attorney can make sure your DST complies with IRS regulations. The requirements for DSTs in Oklahoma include:

  • Bona Fide Third-Party Trust – A deferred sales trust must operate as a legitimate, independent third-party trust. The trustee manages the trust on behalf of the seller but must act independently to maintain compliance with IRS guidelines. Direct control by the seller could void the tax benefits of the DST.
  • Sale Proceeds Go to the Trust – Once the asset is sold, the proceeds must go directly into the deferred sales trust. If the seller receives the funds first, it creates a taxable event. By placing the proceeds in the trust, you preserve the opportunity to defer capital gains taxes and allow the trust to reinvest your profits.
  • Pre-Sale Trust Formation – You must create a deferred sales trust before the asset sale occurs. If you wait until after the sale, the proceeds will not qualify for tax deferral benefits. Proper planning ensures everything is in place before the transaction.
  • Due Compensation – Lastly, the trustees and financial professionals managing the trust must receive fair compensation for their services. Fair compensation helps support the trust’s operations, guarantees fiduciary compliance according to IRS guidelines, and satisfies the legal requirements for operating a third-party trust.

If you have questions about these requirements, talk to an Oklahoma deferred sales trust lawyer from our practice.

What Assets Are Suitable and Eligible for a DST?

While not appropriate for selling all assets, some highly appreciated assets that make sense for a DST include:

  • A business or your ownership stake
  • Real estate
  • Securities
  • Cryptocurrency
  • Stocks, bonds, and other investments
  • High-value collectibles

What Our Oklahoma Deferred Sales Trust Attorneys Can Do

Our attorneys can guide you through the deferred sales trust process so you know your trust is set up correctly and tailored to your needs. Here are a few examples of what we can do if you’re interested in a DST in Oklahoma.

We evaluate your financial position and the details of your asset sale to identify the best tax-saving opportunities. This analysis helps us assess whether a deferred sales trust is the right fit.

Every client’s situation is unique. We take the time to understand your priorities and long-term financial goals before recommending DST strategies. If a DST is suitable, we’ll explain how it can help you achieve your objectives.

Setting up a deferred sales trust requires you to comply with strict IRS regulations. Our attorneys can handle every detail to make sure your trust is properly structured. This way, you preserve the trust’s tax advantages and protect yourself from unnecessary penalties.

We design your trust to suit your specific financial plans. Whether you prefer to spread payments over several years or defer taxes entirely by reinvesting the proceeds from selling your asset, we can structure the DST to maximize benefits and minimize liabilities.

Contact an Oklahoma Deferred Sales Trust Attorney Today

Don’t wait to take advantage of the tax benefits of a deferred sales trust in Oklahoma. Contact 453 Deferred Sales Trust Powered by Pennington Law today to set up a free, no-obligation consultation.