Pennsylvania Deferred Sales Trust Attorney

Are you looking for a way to manage taxes on asset sales more effectively? If so, a deferred sales trust (DST) could be the solution. Historically, tools such as DSTs were primarily used by the ultra-wealthy, but they’re actually accessible to a much broader audience and offer significant benefits for managing and deferring capital gains taxes efficiently.

At 453 Deferred Sales Trust Powered by Pennington Law, our attorneys are here to help you understand how a deferred sales trust — “The Tax Tool You Didn’t Know You Had” — can fit into your financial plans. Our team can guide you through the entire process, from evaluating whether a deferred sales trust is right for you to establishing and managing one.

Take the first step toward smarter financial management today by contacting us today. You’ll meet with a Pennsylvania deferred sales trust lawyer at a free initial consultation to learn more.

Why Choose 453 Deferred Sales Trust Powered by Pennington Law?

Choosing 453 Deferred Sales Trust Powered by Pennington Law means selecting a team that provides comprehensive service designed to manage your deferred sales trust needs efficiently and effectively. Here’s why you should choose us to handle your deferred sales trust needs:

Unlike many companies that rely on various professionals from different agencies, our firm provides all-in-one service. We handle everything from setting up trusts and fulfilling third-party trustee duties to managing financial reinvestments and tax filings.

Our team boasts a robust background in several critical areas, including tax law, estate planning, financial advisory, and wealth management. We also have specialists in fiduciary matters, insurance, and asset protection. This allows us to offer well-rounded and knowledgeable support for deferred sales trusts and related financial strategies.

At the helm of our firm is Andre Pennington, a highly regarded figure in tax, trusts, estate planning, and investment services. His insights and strategies have been featured in prominent publications such as The New York Times, Forbes, Inc., The Wall Street Journal, and USA Today. He has also been listed annually in prestigious directories 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.

Our commitment extends beyond just managing assets effectively. We strive to maximize the value of your investments. Our team understands the importance of ensuring that people who have devoted years to building their businesses receive the full benefits of their efforts at the final stage of investment.

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 that allows you to sell assets and defer capital gains tax on the sale. This type of trust helps you convert a valuable asset — such as a business or property including market investments and cryptocurrency — into a steady stream of income over time without immediately paying hefty taxes.

The following are some key financial benefits of DSTs:

DSTs allow for the reinvestment of all sale proceeds into income-generating assets, helping you grow your wealth over time without the immediate tax burden.

The tax benefits of DSTs include the deferral of 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.

The benefit of a deferred sales trust vs. a 1031 exchange is that a DST provides more flexibility.

Placing assets in a DST can freeze the taxable value of your estate, which can be beneficial for estate planning and reducing future estate taxes.

1031 exchange alternatives like DSTs can be structured to provide income to future generations, preserving family wealth and ensuring stability for your heirs.

With a DST, you gain more control over how and when your money is invested and distributed, allowing for tailored financial planning.

Who Is a Deferred Sales Trust Best for?

A DST is an excellent choice for people looking to sell their assets while minimizing immediate tax impacts. These trusts are especially beneficial for business owners planning to sell their companies. It allows them to defer taxes and potentially use the funds for other ventures or retirement. People with investment properties that have significantly appreciated also find DSTs useful for deferring taxes while converting their investments into liquid assets.

Additionally, people approaching retirement can use DSTs to diversify their portfolios by selling off high-value assets without large tax obligations. Finally, heirs who have inherited valuable properties and wish to sell can benefit from DSTs by avoiding large capital gains taxes and managing the proceeds more effectively over time.

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

A deferred sales trust works by allowing you to transfer your property or business into a trust before it is sold. DST strategies are designed to help you defer taxes and generate income over time. Here’s a step-by-step breakdown of how the process works and how income is generated:

  1. Transfer of Property or Business to the Trust – You start by transferring the asset you want to sell into the trust. This step must occur before the asset is actually sold.
  2. Trust Sells the Asset – Once the asset is in the trust, the trust then sells the asset to a buyer. This sale is managed by the trustee, who is responsible for overseeing the transaction.
  3. Sale Proceeds Held in Trust – The money from the sale of the asset is then held in the trust instead of being given directly to you. This allows the transaction to qualify for tax deferral.
  4. Investment of Proceeds – The proceeds from the sale are then invested in various financial instruments or other assets according to the terms set out in the trust agreement. 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 – Based on the investment returns and the terms of the trust, you receive regular installment payments. 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 fulfilling several key requirements to ensure it is both legal and effective in deferring taxes and managing the proceeds from the asset sale:

The trust must be a legitimate, third-party entity, meaning it must be managed by an independent trustee who is unrelated to you to maintain the trust’s integrity.

All proceeds from the sale of the asset must go directly into the trust so the trust can function correctly, and taxation of the sale proceeds can be deferred.

The trust must be established before the sale of the asset to maintain eligibility for tax deferral benefits.

The trust must provide you with due compensation, usually in the form of periodic payments based on the terms agreed upon in the trust.

What Assets Are Suitable and Eligible for a DST?

A DST can accommodate a wide variety of assets, making it a versatile tool for financial planning. Here are the types of assets that are typically suitable and eligible for inclusion in a deferred sales trust:

You can place the proceeds from the sale of an entire business into a DST, which is common for entrepreneurs looking to retire or invest in new ventures.

Shares or interests in a business, whether it’s a corporation, partnership, or limited liability company, can also be transferred into a DST.

Real estate holdings, whether residential, commercial, or industrial, are commonly placed in DSTs to defer capital gains taxes from large property sales.

Investments in securities, such as stocks or bonds, can be sold, and the proceeds transferred to a DST.

Bitcoin and other cryptocurrency holdings can also be placed in DSTs to allow for tax deferral on gains from these volatile assets.

A variety of other investment vehicles, including stocks and bonds, are eligible for transfer into DSTs.

Items such as art, antiques, and other collectibles with significant value can be sold, and the proceeds can go into a DST to defer taxes.

What Our Pennsylvania Deferred Sales Trust Attorneys Can Do

Our Pennsylvania deferred sales trust lawyers are dedicated to guiding you through the process of managing and deferring capital gains taxes from the sale of your assets. We start by reviewing your financial circumstances and the specific details of your asset sale. This initial assessment is critical to understanding your situation and ensuring that every aspect of the transaction aligns with the relevant legal requirements and your financial goals.

Next, our attorneys will discuss your needs and objectives with you to determine if a deferred sales trust is a suitable tool for achieving your financial aims. This is essential for tailoring the trust to your needs, whether you’re looking to secure a steady retirement income, reinvest in other ventures, or simply manage tax liabilities more effectively.

If a deferred sales trust is the right choice for you, our team will work meticulously to establish and structure your trust. We will set up your trust correctly to avoid any potential loss of tax benefits or the risk of incurring substantial capital gains taxes, penalties, fees, or interest. We will also structure the trust to meet your unique goals, which could include arranging the payout of proceeds to minimize your tax burden or structuring the trust to defer taxes entirely. Our attorneys work hard to ensure your DST will serve as a robust and effective component of your broader financial strategy.

Contact a Pennsylvania Deferred Sales Trust Attorney Today

Ready to take control of your financial future? Let a Pennsylvania deferred sales trust attorney help you discover the benefits of a DST. Contact 453 Deferred Sales Trust Powered by Pennington Law today to schedule your free initial consultation.