Saving taxes with an IRS approved tax plan is called a private letter ruling.
The IRS did a great job in making certain states, such as Nevada, a great location for estate planning. The newest IRS approved trust planning method is the family owned trust company. These are called a “private trust company.”
This is a Nevada corporation owned by you and your family. Nevada does not require you to obtain any particular license.
Nevada is the leading state with their new and easy to use private trust company law. The IRS guidance is on this link.
Most importantly, this trust can eliminate state income taxes. Residents of California and New York have found Nevada the best way to avoid income taxes and inheritance taxes.
Keeping Control while Eliminating State Income Taxes
Trusts have protected families for more than a thousand year (starting with the Great Crusade). A Nevada trust can last up to 365 years. A Nevada trust is known as a dynasty trust. These trusts can also move offshore. A private trust company allows an orderly succession of asset management upon your death. It allows you to keep control and save taxes.
Stop paying State Income Taxes with the IRS Designer Trust is discussed in this related blog posting. Does it seem odd that the IRS would specifically design a trust to allow you to avoid state income taxes legitimately? The Federal Government loses $Billions in taxes because of the state income tax deduction. Since the 1986 Tax Reform Act, the Feds have been trying to repeal the deduction for state income taxes.
Your private trust company is the trustee of the IRS Designer Trust.
Managerial & investment control retained by you. The courts approved this in Alexander v. Commissioner, 190 F.2d 753 (5th Cir. 1951).
International business headquarters
The Department of Treasury is attempting to attract foreign investors to America. The Nevada tax haven status is the perfect location for the foreign investor.
The State of Nevada understands that business needs asset protection trusts. Nevada’s sophisticated and flexible trust laws make it the best state for asset protection.
Nevada’s family trust company laws allow you to keep control of your assets
Many clients have mistakenly used a relative as trustee. This can invalidate their estate planning. Section 2036 to 2038 prohibit a family member or an employee acting as trustee. More importantly, the family member may be inflicted with dementia. Removing by the court is costly and emotionally painful.
If you need to up the quality of your tax planning, then contact me, Brian Dooley, CPA, MBT, [email protected]