623-229-0463 Utah Deferred Sales Trust Attorney
Are you aware of the financial options you have for selling high-value assets in Utah? Many people are not familiar with deferred sales trusts (DSTs), tools often used by the ultra-wealthy to manage capital gains taxes. However, DSTs are not just for the rich — they could be right for you, too. They can offer significant tax deferral benefits and provide you with more control over your financial future. Think of them as “The Tax Tool You Didn’t Know You Had.”
At 453 Deferred Sales Trust Powered by Pennington Law, our nationally recognized attorneys are experienced in setting up and tailoring deferred sales trusts to suit your needs. A lawyer from our team can walk you through the process and set up a trust on your behalf that aligns with your financial goals. Contact us today for a free, no-obligation consultation, and let’s discuss how a deferred sales trust can work for you.
Why Choose 453 Deferred Sales Trust Powered by Pennington Law?
If you’re considering how to manage and defer capital gains taxes on the sale of a business or property, choosing the right legal partner can make all the difference. Here’s why you should team up with 453 Deferred Sales Trust Powered by Pennington Law:
We provide a complete, IRS-compliant deferred sales trust service that covers everything from creating irrevocable trusts and handling trustee duties to managing financial reinvestments and tax filings. Unlike most companies that require multiple professionals from different agencies, our in-house program simplifies the entire process for you.
Our firm brings together professionals with extensive knowledge and experience across various complex fields, including tax law and strategies, estate planning, financial advisory, wealth and fiduciary matters, insurance, and asset protection. This multidisciplinary team can manage all aspects of your deferred sales trust with the utmost proficiency.
Andre Pennington, our principal attorney, is nationally recognized for his deep understanding of 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, he has been honored in the annual 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 lawyers take a strategic approach to get you the maximum value from your investments. We understand the importance of securing the full potential of the portfolio you have worked hard to build. Our tailored strategies are designed to meet your specific financial goals and circumstances.
What Is a Deferred Sales Trust and What Are Its Benefits?
So, what is a deferred sales trust? Also called an installment sale trust, a DST is a legal arrangement that allows property owners to sell their highly appreciated assets and defer capital gains tax on the sale. This is made possible by transferring the assets to a trust before the sale. Once the assets are in the trust, they can be sold, and the original owner can collect a steady stream of income over time without the immediate tax hit.
The following are some of the key financial benefits of DSTs:
Deferred sales trusts can invest the proceeds from the sale of your assets, which allows the money to grow and potentially increase your overall wealth.
The tax benefits of DSTs include the ability to delay capital gains taxes until you start receiving distributions, which you can time to align with your financial needs. 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.
One benefit of a deferred sales trust vs. a 1031 exchange is that a deferred sales trust can be used for a wider variety of assets and situations.
When structured properly, a deferred sales trust can freeze the taxable value of your estate assets, which can reduce future estate taxes.
A DST allows for the transfer of wealth to the next generation in a tax-efficient manner, preserving more of your family’s wealth over time.
Deferred sales trusts offer flexibility in how and when you receive payments, giving you greater control over your financial planning.
Who Is a Deferred Sales Trust Best for?
A deferred sales trust is an excellent strategy for anyone who wants to optimize their returns from the sale of high-value assets.
Business owners planning to sell their companies often find deferred sales trusts particularly beneficial, as they allow for a smoother corporate transition by deferring taxes and maintaining income flow. Similarly, people with investment properties that have significantly appreciated — such as real estate, market investments, and cryptocurrency — can use deferred sales trusts to avoid large capital gains taxes upon sale.
DSTs are also valuable tools for those approaching retirement who wish to diversify their portfolios. Those who sell their assets through DSTs can secure steady income streams and manage their financial futures more effectively. Additionally, people who have inherited valuable properties and are considering selling can greatly benefit from using deferred sales trusts to manage potential tax impacts and enhance their financial planning.
When you meet with one of our Utah deferred sales trust lawyers, we can assess your situation and determine how a DST could fit your goals.
How Does a Deferred Sales Trust Work and How Is Income Generated?
DST strategies are 1031 exchange alternatives that work by transferring the ownership of your assets into a trust before the actual sale. The following is a step-by-step breakdown of the process:
You start by transferring the asset you want to sell into the deferred sales trust to set the stage for the upcoming sale and subsequent steps.
Once the trust owns the asset, it can sell it. The trustee manages this sale to ensure it complies with legal standards and maximizes your financial benefits.
After the sale, the money obtained from selling the asset is held within the trust to keep the funds separate from your personal finances.
Next, the trust invests the sale proceeds to generate income. This allows you to grow the proceeds through various investment strategies while still deferring and, most times, eliminating capital gains tax consequences.
Finally, the trust pays you the income generated from these investments in regular installments. 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?
You must meet certain requirements to set up a deferred sales trust that is valid and compliant with legal standards. Here’s what you need to know about these requirements:
The trust must be a bona fide third-party entity. This means it must be legally recognized and operated by someone who isn’t directly related to you.
When the trust sells your asset, all sale proceeds must go directly into the trust. This separates the funds from your finances and allows you to defer taxes.
You must establish the trust before the sale of the asset to meet the legal requirements for a deferred sales trust.
The trustee managing the trust must receive proper compensation for their services for the trust to be considered a legitimate financial arrangement.
What Assets Are Suitable and Eligible for a DST?
A deferred sales trust can be a versatile tool for anyone looking to sell highly appreciable assets while deferring capital gains taxes and maintaining income from those assets. Understanding the types of assets that are suitable and eligible for a DST can help you determine if this financial strategy fits your needs.
The following assets typically qualify for inclusion in a DST:
Proceeds from the sale of a business can be placed into a DST so the former owner can defer taxes and potentially receive a steady income stream.
Shares or interests in businesses can be transferred into DSTs.
Income from the sale of real property, including residential or commercial properties and undeveloped land, can go into a DST.
Securities like stocks can be sold, and the proceeds can be funneled into a DST.
You can place cryptocurrencies like Bitcoin and Ethereum into a DST, which can be particularly useful given their volatility and potential high gains.
Besides traditional stocks and bonds, other investment vehicles like mutual funds are eligible for DST arrangements.
Collectible items like art and antiques that hold significant value can go into a DST to defer taxes while potentially increasing the asset’s income-producing potential.
What Our Utah Deferred Sales Trust Attorneys Can Do
At 453 Deferred Sales Trust Powered by Pennington Law, our Utah deferred sales trust lawyers are here to guide you through the process of creating and managing an effective DST. We start by discussing your personal needs and objectives to determine if a deferred sales trust is the right tool for you. If we establish that creating a deferred sales trust is the right move, our next focus is setting it up correctly.
We thoroughly review your financial circumstances and the specifics of your asset sale so we can understand the big picture and provide tailored advice. We tailor the DST to maintain its tax benefits and avoid unnecessary penalties, fees, or interest. Our attorneys also structure your deferred sales trust to meet your unique goals, whether you want to minimize tax burdens by spreading out sale proceeds or defer taxes entirely by only paying income from reinvested proceeds.
Contact a Utah Deferred Sales Trust Attorney Today
Ready to discover how a deferred sales trust could benefit you? 453 Deferred Sales Trust Powered by Pennington Law is here to explain your options and identify the right strategy for your financial needs. Take the first step in securing your financial future by contacting us today for a free initial consultation with a Utah deferred sales trust attorney.