spendthrift trust a non-grantor, irrevocable, complex ... 4th trust and tax meeting.pdf · form of...

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SPENDTHRIFT TRUSTS A NON-GRANTOR, IRREVOCABLE, COMPLEX, DISCRETIONARY, SPENDTHRIFT TRUST

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Page 1: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

SPENDTHRIFT TRUSTSA NON-GRANTOR,

IRREVOCABLE,COMPLEX, DISCRETIONARY,

SPENDTHRIFT TRUST

Page 2: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

KEY TRUST INFORMATION

Trust Operation• You may never remove assets from or transfer assets to the Settlor of

the Trust after the Creation of the Trust.

• All income or losses generated by the Trust should be reported with a Federal Income Tax Return.

• Trustees of the Trust must sign as a “Trustee” when acting on behalf of the Trust.

Page 3: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

Cautions

• Never write on or alter the Trust Documents.

• Never change, revoke, or destroy any Trust Documents.

• Never return, transfer the ownership of Trust Property to the Settlor of the Trust or anyone making an endowment to the Trust.

• Compliance

• The Trustees of the Trust are required to always be in Compliance with the Powers of the Trustees as stated in the Trust and the Terms and Conditions of the Trust. The Trustee has a binding Fiduciary Responsibility by law.

Page 4: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

THINGS THAT TRUST CANNOT BE USED FOR

• Reduction or elimination of income subject to tax.

• Deductions for personal expenses paid by the trust.

• Depreciation deductions of an owner's personal expenses paid by the trust.

• Depreciation deductions of an owner's personal residence and furnishings.

• A stepped-up basis for property transferred to the trust.

Page 5: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

• The reduction or elimination of self-employment taxes.

• The reduction or elimination of gift and estate taxes.

• Any illegal activity whatsoever.

• Fraudulent conveyance of assets to avoid judgments or government seizure.

• Any operation contrary to state, local or federal law.

Page 6: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

SPENDTHRIFT TRUST

LEGAL OPINION

Page 7: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,
Page 8: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,
Page 9: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

THE TRUST DOCUMENTS WERE COPYRIGHTED,BEGINNING IN 1999 AND COMPLETED IN THE YEAR2000. ADDITIONAL DOCUMENTS HAVE BEENCOPYRIGHTED IN 2012 MAKING THE TRUST IN FULLCOMPLIANCE WITH THE INTERNAL REVENUE CODE.THE COPYRIGHTS ARE EXCLUSIVELY SOLD THROUGHMASTERS COPYRIGHTS LLC IN HOUSTON, TEXAS. ONREQUEST, MASTERS COPYRIGHTS LLC CAN ASSIST INARRANGING LEGAL SERVICES, TAX PREPARATION,AND LEGAL CONSULTATIONS AND ESTATE PLANS.

Masters Copyrights LLC

Page 10: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

INFORMED OR UNINFORMED

Estate planning specialists stress that there are twotypes of taxpayers: informed and uninformed. Theless informed you are, the more taxes you pay as ageneral rule. The uninformed are vulnerable to claimsof liability and the informed are protected and oftenimmune to claims of liability against effectingproperty and assets. Spendthrift Trusts can reduce theburden of taxes, deter claims and limit liability.

Page 11: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

INVESTMENT AND CONFIDENTIALITYNOT SUBJECT TO PROBATE

• Trustees have unique powers allowed by law with a properlycreated trust allowing investments in real or personalproperty of any nature.

• Probate requirements for wills often result in making a publicrecord of the terms and distribution requirements of the will.Trusts are not subject to Probate. Trusts however are notfiled and are not on any public register. Legal Trusts areregistered with the IRS through an EIN number. While thelegal trust must file a 1041 tax return each year, it remainsconfidential as it is not public record.

Page 12: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

PROPERTY PROTECTION AND TAX ADVANTAGE

Why, then, choose to make your trust irrevocable? Theanswer is simple: tax advantages and legal protection fromall liability. Irrevocable trusts do not pay taxes oncapitalization and endowment and are generally beyondthe reach of creditors and judgments with limited exceptions.Conversely, revocable trusts offer no tax benefits at all andmay be reached by creditors to satisfy judgments. If youwant lots of flexibility, poor tax consequences and no legalprotection, make your trust revocable. But if you want goodtax consequences and legal protection, you must foregoflexibility and form an irrevocable trust instead.

Page 13: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

TOTAL PROTECTION

Property held by a properly structured contract in the form of a Spendthrift Trust Organization is generally protected from tax liens, levies, and seizures, lawsuits, divorce claims and bankruptcy. The Spendthrift Trust Organization is not liable for the debts of the trustees or the beneficiaries and the assets held by the trust generally cannot be seized to satisfy their debts*. Further, the trustees and beneficiaries are not liable for the debts of the Trust Organization.

Page 14: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

All the states have enacted legislation

generally confirming that the interest of a

beneficiary under a trust is not subject to

execution or attachment by his creditors.

There are also many decisions of state court

supporting this concept. We have not found

any to the contrary.

STATE ACTIONS ENHANCING

FUNDAMENTAL TRUST LAW

Page 15: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

MAIN ADVANTAGES OF THE SPENDTHRIFT TRUST

Every aspect of it is lawful. It is guaranteed by the U.S. Constitution, Supreme Court and other court decisions.

●It is easy to establish, can be maintained by you and involves minimal paperwork. It greatly reduces or eliminates fees.

●It is lawful in every state. A Spendthrift Trust properly established in one state can operate in any other state.

●It is made irrevocable to avoid any questions as to ownership of the assets.

●It prevents any information about your assets, liabilities and heirs from becoming public.

●It can be used to control tax liability.

●It can operate any lawful business anywhere in the world. It has limited liability and most of the advantages of a corporation with none of the disadvantages.

●It has no periodic reports or accounting to make to any state or government.

Page 16: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

• It has the same constitutional rights as any

individual, that is, the right to privacy, freedom

from unwarranted search and seizure, to refrain

from self-incrimination and all other rights.

• All of the assets and cash that are moved into a

trust, through the endowment of the corpus, is

totally tax deferred.

• When the Spendthrift Trust is used in a legal

manner and under the provisions of the

Spendthrift, it is totally impenetrable by creditors,

agencies, governments and is immune from

transfer by operation of law.

• Your personal bankruptcy has no effect on the

Spendthrift Trust assets.

Page 17: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

WHO CAN BENEFIT FROM A SPENDTHRIFT TRUST?

EVERYONE!!!

PROFESSIONALS - DOCTORS, DENTISTS, CHIROPRACTORS, ENGINEERS, ETC. Reduce or eliminate the need for liability insurance Render yourself virtually judgment-proof Control your taxes Maintain privacy

RETIRED PERSONS. Reduce income taxes Maintain privacy

INVESTORS, Protect your investments from a financial reversal

FOREIGNERS, Maintain privacy while enjoying the benefits of controlling Real Estate in the United States

Page 18: Spendthrift Trust A Non-Grantor, Irrevocable, Complex ... 4th Trust and Tax Meeting.pdf · form of a Spendthrift Trust Organization is generally ... Spendthrift Trust A Non-Grantor,

The Goal of Masters Copyrights

LLC is to protect the assets of

clients and reduce taxation.

Masters Copyrights LLC and the

Rosen & Rosen Law Firm are

happy to serve you with your

needs.

Thank you again for coming!

Thank You for Attending this Presentation.