HOW DEFERRED SALES TRUST WORKS, WHO THIS WORKS FOR, AND BENEFITS

[Brett P Swarts]

Parsa Vahid:

So Brett, just tell us a little bit, actually, go into as much detail as you think is appropriate about how this works, who this works for, some of the benefits, and just assume that a lot of the listeners may not know much about what a 1031 exchange is, would appreciate an asset is capital gains, just try to dumb it down as much as possible for us.

Brett Swarts:

Absolutely. So most commercial real estate owners, business owners, and high-end primary homeowners, you know, they struggle with capital gains tax somewhere between 30% and 50% of their gain when they go to sell their highly appreciated assets. And so we use a deferred sales trust to give them tax deferral, liquidity, diversification, and like you said in the intro, the ability to eliminate the need for the 1031 exchange, so they can create and preserve more wealth. That's really at the heart of what we're about is helping people escape feeling trapped and having some options for how they retire, or how much time and energy is spent towards those types of assets. So the main thing to look at is what we call the big, big shift that's happening right now, in the world. This is according to the American Bankers Association. There's about $17 trillion that's passing from one generation to the next in the next 20 years. This is known as the baby boomers. It's the largest wealth transfer in the history of the world. It's happening right now. In fact, there are about 77 million baby boomers in the US alone. And every day, about 10,000 of them are turning 65. So when you look at some of those numbers, what do they face as well, they're faced with highly appreciated assets that they've worked for 20, 30, 40 years to accumulate, and they're looking to retire from the toilets, the trash, the liability, and again, have some more liquidity, and perhaps just preserve their wealth versus the creation mode. Then you couple that with what happened in 2008, where a lot of people overpaid for properties before the crash, you know, ‘05 - ‘06 via the 1031 exchange, and we call this the perfect storm where instead of having to overpay for a property, you can maybe never buy a property again or buy properties whenever you want to. So it just gives you a lot more flexibility and a lot more options. We can customize a wealth plan based on the client's needs.

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