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Private Annuities, Charitable Trusts, Installment Sales And Other Tax Deferral Tools

Full Video Transcript

There are various estate planning mechanisms available to help you defer, minimize or even avoid certain taxes – including capital gains, estate taxes or others. You may have heard of some of them – such as 1031 exchanges, private annuity trusts, charitable donations, installment sales, and others. Basically, you sell, exchange, or transfer property to into a trust, as applicable, through a very structured format. By virtue of doing so, the proceeds you realize from the appreciation of the property are paid to you in a way that takes advantage of tax benefits under the IRS rules. For example, the funds may be paid to you in installments throughout your life, or the value of the asset may be valued in special ways, any of which are designed to trigger only minimal taxes. However, these kinds of transactions require very careful planning and must be executed properly. And since the tax rules often change from year to year, you should make sure the option you’re considering is available for your particular situation.

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