Wisconsin Deferred Sales Trust Attorney

Are you looking for ways to protect your wealth and improve your long-term financial security? Deferred sales trusts (DSTs) are tools that the ultra-wealthy have used for many years to defer capital gains taxes on high-value assets, providing powerful opportunities for individuals and families in Wisconsin to preserve their hard-earned wealth. But DSTs are no longer just for the 0.1 percent. In fact, they could be “The Tax Tool You Didn’t Know You Had.”

453 Deferred Sales Trust Powered by Pennington Law can establish and manage a DST on your behalf, allowing you to take advantage of this previously little-known financial tool. Call now or reach out online for a free consultation.

Why Choose 453 Deferred Sales Trust Powered by Pennington Law?

At 453 Deferred Sales Trust Powered by Pennington Law, we simplify the complex process of deferred sales trusts for Wisconsin residents. Our all-in-one service takes care of every step, including setting up irrevocable trusts, managing trustee duties, reinvesting the proceeds of selling an asset, and filing necessary tax forms — all under one roof. Unlike other firms that rely on separate professionals from different agencies, our IRS-compliant program keeps everything seamless and efficient.

Additionally, our team offers a unique blend of experience in tax law, estate planning, wealth management, financial advisory, asset protection, and insurance. This breadth of knowledge helps us address every detail of your deferred sales trust strategy.

Furthermore, Andre Pennington is a nationally recognized Wisconsin deferred sales trust lawyer. His work has appeared in The New York Times, Forbes, The Wall Street Journal, USA Today, and more. Pennington has also earned spots on prestigious lists 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.

Finally, we focus on helping you capture the full value of your hard-earned assets. Whether you’re selling a business or investment property, we’ll ensure your wealth works for you.

What Is a Deferred Sales Trust and What Are Its Benefits?

Let’s start with the basics: What is a deferred sales trust? A deferred sales trust is a financial tool that lets you defer capital gains taxes when you sell highly appreciated assets, such as real estate or a business. This strategy can help you preserve your wealth while offering flexibility in reinvestment.

The financial benefits of DSTs include:

A DST reinvests your proceeds into diversified assets, allowing your wealth to grow over time while deferring taxes.

The tax benefits of DSTs are substantial, as a DST lets you use the full proceeds from your sale to reinvest, maximizing your financial potential. 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 key benefit of deferred sales trusts vs. 1031 exchanges is that, unlike 1031 exchanges, DSTs apply to various asset types and don’t require strict timelines or replacement property rules.

A DST freezes the value of taxable assets within your estate, helping to minimize future estate taxes.

A deferred sales trust protects your family’s long-term wealth by reducing tax burdens and maintaining financial stability for generations.

DSTs give you the freedom to customize your financial plan, which helps ensure your investments align with your goals and lifestyle.

Who Is a Deferred Sales Trust Best For?

DST strategies make sense for people in a wide range of financial situations, including:

If you plan to sell your business and want to spread the tax impact over time, a DST provides a tax-efficient solution while letting you reinvest the sale proceeds for additional financial growth.

A DST helps property owners defer capital gains tax to avoid a large, immediate tax bill while providing flexibility for reinvestment. Property can include real estate, market investments, and cryptocurrency.

People nearing retirement can sell high-value assets to create a diversified portfolio and avoid the financial strain of a large tax event.

If you inherited valuable property, a DST lets you sell it while minimizing tax consequences and preserving wealth for your future.

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

A Wisconsin deferred sales trust lawyer can explain the steps in creating these trusts and how to make the most of the sale proceeds. The basic steps of selling a high-value asset through a deferred sales trust are:

  1. Transfer of Property or Business to the Trust – First, you transfer the asset (such as a business or property) to the deferred sales trust. This step sets the foundation for deferring capital gains taxes.
  2. Trust Sells the Asset – Next, the trust sells your asset to a buyer. Since the trust completes the sale, you defer immediate capital gains taxes.
  3. Sale Proceeds Held in Trust – Once the sale is complete, the trust keeps the proceeds. This step keeps the funds secure and ready for reinvestment under the trust’s management.
  4. Proceeds Invested – Next, the trust’s overseers reinvest the funds in diverse assets like stocks, bonds, or real estate. These investments help generate income and grow the trust over time. 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, you receive payments from the trust over time. (Another term for a DST is an installment sale trust.) You can structure these payments to meet your financial needs, providing a steady income stream. 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?

Because there are strict guidelines around creating and using deferred sales trusts (or other 1031 exchange alternatives) to sell appreciated assets, proper legal guidance is essential for avoiding trouble with the IRS. The key requirements for deferred sales trusts include:

A deferred sales trust must be structured as a legitimate third-party trust and have independent management to meet IRS compliance standards. This means you cannot manage or control the trust. Instead, a qualified trustee oversees the trust to ensure it operates lawfully and follows tax regulations.

When the trust sells the business or other asset, the proceeds must flow directly into the trust. This step ensures that the IRS does not treat the sale as income for tax purposes at the time of the transaction. By directing the proceeds to the trust, you preserve the ability to reinvest the funds while deferring capital gains taxes. Any deviation from this process could result in immediate tax liability.

Timing is everything with a deferred sales trust. First, you must establish the trust before any sale agreement is finalized. Once the sale closes without a trust in place, it’s too late to take advantage of the tax deferral benefits. Early planning ensures the transaction qualifies under IRS rules, giving you peace of mind and financial flexibility.

Finally, trustees and administrators must receive reasonable compensation for managing the trust and its investments. This payment is not only a legal requirement but also ensures professional oversight of your assets. Proper compensation supports the trust’s operation and helps maintain compliance with tax laws.

What Assets Are Suitable and Eligible for a DST?

DSTs can help you maximize the benefits of selling many types of high-value assets, including:

You can defer the proceeds from the sale of a business by using a deferred sales trust, providing tax savings and reinvestment opportunities.

If you own shares or interests in a business, a DST can help you sell them while deferring capital gains taxes.

Commercial, residential, or investment properties with substantial appreciation qualify for DST benefits, allowing you to reinvest without an immediate tax burden.

Stocks, bonds, and similar securities are eligible for DSTs, giving you options to diversify and grow your portfolio tax-efficiently.

You can defer the profits from cryptocurrency sales through a DST, providing flexibility for reinvestment in various assets.

DSTs accommodate the sale of diversified investment portfolios, deferring taxes while reinvesting for continued growth.

You can manage the sales of art, antiques, or other valuable collectibles through a DST to defer taxes and protect your wealth.

What Our Wisconsin Deferred Sales Trust Attorneys Can Do

Our Wisconsin deferred sales trust attorneys start by carefully reviewing your financial situation and the details of your planned asset sale. This analysis helps us understand your unique circumstances and identify the best approach for managing the transaction. We then discuss your financial goals and personal priorities to determine whether a deferred sales trust aligns with your needs.

If a DST is the right solution, we can make sure it is established correctly to maintain its tax-deferral benefits. Mistakes in setup can lead to losing these benefits or incurring significant penalties and fees. Our team takes every precaution to ensure your trust complies with IRS requirements.

Finally, we design your trust to meet your specific goals. Whether you want to receive installment payments that reduce your immediate tax burden or defer taxes entirely by only using income from reinvested proceeds, we create a plan tailored to your needs.

Contact a Wisconsin Deferred Sales Trust Attorney Today

Ready to take the first step toward smarter asset management and tax planning? Contact us at 453 Deferred Sales Trust Powered by Pennington Law today for a free, no-obligation consultation. Let a Wisconsin deferred sales trust attorney introduce you to one of the best ways to safeguard your wealth.