FAQ's
TAX DEFERMENT
Yes, if properly structured which one of our expert specialists can help you do. There are many options to be able to achieve this end and will depend on an individual’s specific situation.
Yes. With one of our unique trusts, all passive income, like rental income, if received into the corpus of the trust will have the taxes deferred much like you can do in a 401K or IRA. The difference of course trustee retains absolute discretion of how the monies are utilized.
When properly structured by one of our specialists, you can effectively divert profits from your corporation into the corpus of the trust as a passive income rendering it tax-deferred under the trust.
Yes. Investing qualifies as passive income not taxed until such a time as the trustee dis
Are capital gains of assets owned in the trust taxed? No. So whether you sell real estate, precious metals, a car/boat, for a profit, those profits will not be taxed per Internal Revenue Code 643B.
When any monies are distributed to the beneficiaries, which can only be done at the sole discretion ofthe trustee(s), then the beneficiaries would report that as income. If the goal is to never pay taxes, any proceeds can be diverted tax free into separate trusts for the trustees
who can then continue the taxdeferment indefinitely.
No, as long as the assets are sold to the trust (usually in exchange for a demand note from the trust) at the cost basis of the asset then.
Any income will be reported on the trustee’s personal tax return albeit the personal deductions as of 2023 stand at $27,700 for those married filing jointly, and $20,800 for heads of household so will not be taxed up to those amounts. In addition, in the event that the trustee has sold assets to the trust in exchange for a demand note from the trust, the trust can pay back that demand note without triggering a taxable event.
The Spendthrift Trust does not take depreciation on business assets it owns. All business assets are sold to the Beneficial Trust at Book Value (Cost less Depreciation taken) There is no need to generate a tax deduction of the business when the business now will Lease those assets and intellectual property from the Beneficial Trust and deduct the Lease Payment as an expense. The Beneficial Trust reports the Lease Payments as Lease Income and that income is Passive Income and tax deferred per IRC 643B. When an asset is sold from the Beneficial Trust and sale generates a Capital Gain, that Capital Gain is deferred per IRC 643B.
POWERS OF THE TRUSTEE
The trustee has full discretion to invest any monies held in trust for the sake of the benefit of the trust. The only limits are referred to as the 3 F’s: Food, Fun, and Fashion. Albeit, there are many instances in which food is What the trustee cannot use the money.
Yes, They may at the discretion of the trustee (usually the same person) if paid for the benefit of the trust.
Yes, the Trust can purchase a non-qualified annuity, but no, the beneficiary cannot be an outsider. They must be the trustee or trust beneficiary.
ASSETS PROTECTION
Because your assets are held “in trust”, neither the trustee nor the beneficiary own the property and therefore cannot be penetrated for the sake of a lawsuit or creditor seeking judgment. Rather, the trustee maintains full discretion on how the trust manages the trust assets while the beneficiaries do not, according to the spendthrift clause of the trust, are not entitled to any assets of the trust except at the absolute discretion of the trustee.
Yes. Once again, trust assets are not owned by the trustee nor the beneficiaries and so cannot be penetrated for divorce in any case.
Here is case precedent as an example:
In Pfannenstiehl v. Pfannenstiehl, 475 Mass. 105, 55 N.E.3d 933 (2016), the Massachusetts Supreme Court unanimously overturned a lower court decision that had ordered that assets in an irrevocable discretionary trust be split in a divorce. [See Trust subject to division in divorce.pdf).
Yes. Incomes, whether 1099 or W2, when properly setup, can be diverted into the trust under contract therefore resulting in one’s personal taxes showing little or no income and therefore alleviates much if not all future alimony obligations.
There are many effective ways to achieve this goal and will depend on your particular circumstances. We recommend setting up a free-consultation with one of our trust experts who can review your situation and structure the trust optimally for your particular needs so you can know your wife will be taken care of and your children will remain the beneficiaries.
TRUST ADMINISTATION
Assets may include bank accounts, notes (i.e. loans), precious metals, digital currency, real estate, stock market investments, life insurance, annuities (not IRA or Roth), a business asset, intellectual property, or anything else which has a monetary value.
Anyone, at the discretion of the trustee. Assets sold to the trust do not trigger a taxable event if sold at cost basis of that asset. In exchange for the asset, the seller receives a demand note from the trust which can be paid back to the seller without triggering a taxable event.
Household Furnishing can be valued at the amount up to the value authorized by your homeowners
Insurance Policy (usually about 25% of insured value of a home). Lump all household furniture, fixtures, appliances and other household items as one item = Household Furnishings using a value up to 25% of insured home value. This must be listed on (or attached to) the Notarized Bill of Sale.
The life is 21 years. It is renewed by the Trustee and may be renewed indefinitely.
The Trustee is not required to pay for the use of Trust assets while conducting Trust business. However, if the Trustee lives in a Trust-owned residence, he/she should pay a reasonable amount of rent. On the other hand, beneficiaries usually do not pay rent to the Trust and can live there rent free.
Anyone the Trusteen authorizes.
No! Under no circumstances!
Yes. While the card is in the name of the trustee, the trust can pay the card as long as the expenses are used for the benefit of the trust.
Yes. A corporation is not Required. It is advisable to establish one of our business trust if the activities of the business will generate “active income” which then can be transferred to a personal beneficial trust as “passive-income” in order to defer taxes.
No. The beneficiaries have no right to know about any Trust business affairs.
No. But the compliance overseer can resign and assign another individual to the role. We recommend
that the compliance overseer and the trustee be the same person(s).
Only with permission of the Trustee or a standing permission.
Your Trust is a Discretionary Trust and the trustee (at his or her discretion) can add or remove beneficiaries at will.
No, this is a conflict of interest.
The Settlor has no power after they convey the Trust to the Initial Trustee. The Settlor also has no liability for the trust.
A foreign national can be Beneficiary as long as they do not take Taxable Distributions from the Trust that would require a K-1. Otherwise, they will need a US SSN or ITIN.
The Spendthrift Trust can pay for education and medical for the Trustee and the Beneficiaries. Expenses must be paid directly to the provider and not to Trustee or Beneficiary.
If any medical treatments are doctor recommended or you feel are necessary to keep you healthy, then they can be a trust expense.
Yes. But it is recommended to have the trust pay the expenses directly, but not necessary.
Trust Law is not subject to any Federal, State or Local court and no judge or court may issue a turnover order against a Spendthrift Trust. The Spendthrift Trust is sold by a licensed attorney as a legal document and the Spendthrift Trust is created for the client by the Attorney unlike others in the market who sell illegal documents or trusts who are not backed by licensed lawyers.
The IRS examined our Spendthrift Trust for compliance and a past District Director even purchased one for himself.
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Global Asset Preservation Trusts (GAPT) is not a law firm, CPA/Enrolled agent, nor financial or tax advisor and should not be considered to be acting in those capacities. This website is provided for information purposes only and should not be considered nor be construed as legal, accounting, financial, or tax advice. GAPT strongly suggests that Purchaser contact an attorney for legal advice, a CPA or equivalent for tax advice, and such other financial or tax advisors customarily consulted when in engaging in complex legal and financial transactions regarding the purchase, structure, and utilization of any product purchased from GAPT.