Traditional trusts always suffer from one major disadvantage.
You must relinquish the right to:
- Or direct the trust assets
That’s not the case with BDITs. You maintain control.
The BDIT’s benefits are made possible by one critical principle:
Assets transferred by a third party (such as a parent) to a properly structured
trust for your benefit enjoy transfer-tax savings and creditor protection,
even if you maintain control over those assets.
IRS rules prohibit you from transferring assets to beneficiaries on a tax-advantaged
basis if you retain the right to use or control the assets. But those
rules don’t apply to assets you
receive from others in a beneficiary-controlled trust. The challenge in taking
advantage of a BDIT is to place assets you currently own into a third-party trust.
This trust is especially useful for assets that are appreciating quickly
in value, or assets that currently have a low value but are anticipated
to rapidly increase in value in the near future.
The BDIT allows the beneficiary to retain the right to manage and use assets
held by the trust and to receive trust income and even principal in the
amount needed for:
- Or support
Thus, control of the assets, beneficial enjoyment, creditor protection,
and estate tax benefits are all achieved through utilizing a BDIT.
Reach out to our experienced team at Castro & Co. by calling
(833) 227-8761 to
schedule your confidential consultation today!