As a professional serving high-income, high-asset clients, you undoubtedly are always on the lookout for innovative ways to increase their family wealth and save them money that would otherwise go to pay taxes. What if you could offer them a strategy with the following characteristics:
- Allows them to defer capital gains taxes when they sell a highly appreciated asset
- Gives them the perfect exit strategy when selling investment real estate, a business, a primary residence, a highly concentrated stock position or high-value personal property such as an art collection, antiques, vintage jewelry, vintage vehicles, etc.
- Acts as a viable alternative to a 1031 exchange
- Rescues them from a failed 1031 exchange
- Allows them to reinvest in any “prudent investment”
- Converts their illiquid asset into predictable monthly payments they can use as retirement income
- Is structured so as to meet their personal needs, objectives and goals
- Has been tested and approved by the IRS and professional financial organizations
You can. The above are just a few of the many benefits a Deferred Sales Trust (DST) provides your clients.
What is the DST?
The Deferred Sales Trust is a unique, proprietary form of the installment sale method that the IRS authorizes via Section 453 of the Internal Revenue Code.
How Does the DST Work?
In a nutshell, the DST works in the following way:
- You and your client meet with the Estate Planning Team to determine such things as your client’s investment risk tolerance, investment and estate planning goals and objectives, and the form his or her installment sale contract will take.
- The EPT’s tax attorney drafts the DST, ensuring that it complies with all applicable federal and state laws, plus IRS rules and regulations.
- Your client sells his or her highly appreciated asset to the DST in exchange for a secured installment sale contract.
- The DST’s Independent Certified Trustee, in turn, sells the asset to your client’s intended buyer for the exact same amount.
- The Trustee then begins investing the sale proceeds, on which your client pays no capital gains tax, in accordance with his or her stated wishes.
- The Trustee likewise begins making payments to your client as specified in the installment sale contract.
Who Offers the DST?
One of the most unique aspects of the DST is that only the Estate Planning Team (EPT) can offer it. You become part of this elite team by joining the membership organization. You will find such membership especially valuable if you are one of the following:
- Estate planning or tax attorney
- Certified Public Accountant
- Business broker
- Mergers and acquisitions professional
- Real estate professional
- Financial and investment advisor
Reef Point, one of the premier members of the Estate Planning Team, has developed an in-depth Partner Center that not only thoroughly explains the DST and the advantages it offers your clients, but also the ways in which becoming an EPT member offers you personal advantages as a DST provider and helps you grow your business or professional practice. You will also be impressed by the fact that Greg Reese, Reef Point’s founder and principal, is one of only 13 professionals nationwide authorized to act as the Independent Certified Trustee the DST requires.
To find out more about how becoming an EPT member benefits both you and your clients, contact Reef Point today.