MBAT COPYRIGHTED SPENDTHRIFT TRUST
In 1999, specialized terms and conditions for Irrevocable Spendthrift Trusts were introduced, uniquely incorporating a control mechanism within the trust structure. This control allowed a designated individual to oversee the actions of the trustee and the behavior of the beneficiaries. These trusts conform to IRS standards, draw on the theories of the late Professor Austin Scott of Harvard Law School—a leading expert on trust law—and align with pertinent legal codes and statutes.
The trust documents were initially copyrighted in 1999 and finalized in 2000. Further copyrights were secured in 2012. These copyrights are exclusively distributed through Benson Financial LLC in Houston, Texas. Upon request, MBAT can provide assistance in securing legal services, tax preparation, and legal consultations.
The trust offers robust asset protection; typically, the trust assets are protected from turnover orders by any court or judge when established and utilized correctly*.
Generally, when funds or endowments are properly conveyed to a trust, there are no tax consequences for the party contributing the funds, the beneficiaries, or the trust itself. This contribution is referred to as the capitalization or corpus of the trust. Distributions of assets, cash, or property to a beneficiary are not taxable events for the trust. All capitalizations, endowments, capital gains, extraordinary dividends, real estate transactions, and stock dividends realized in an irrevocable discretionary trust are not considered income when allocated to the corpus.
The Internal Revenue Code clearly states:
Internal Revenue TITLE 26, Subtitle A, CHAPTER 1, Subchapter J, PART I, Subpart A, Sec 643 (a)(3),(4),(7) and (b) states: “(3) Capital gains and losses. Gains from the sale or exchange of capital assets shall be excluded to the extent that such gains are allocated to corpus and are not (A) paid, credited, or required to be distributed to any beneficiary during the taxable year, or (B) paid, permanently set aside, or to be used for the purposes specified in section 642(c). Losses from the sale or exchange of capital assets shall be excluded, except to the extent such losses are taken into account in determining the amount of gains from the sale or exchange of capital assets which are paid, credited, or required to be distributed to any beneficiary during the taxable year. The exclusion under section 1202 shall not be taken into account. (4) Extraordinary dividends and taxable stock dividends For purposes only of subpart B (relating to trusts which distribute current income only), there shall be excluded those items of gross income constituting extraordinary dividends or taxable stock dividends which the fiduciary, acting in good faith, does not pay or credit to any beneficiary by reason of his determination that such dividends are allocable to corpus under the terms of the governing instrument and applicable local law. (7) Abusive transactions The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this part, including regulations to prevent avoidance of such purposes. If the estate or trust is allowed a deduction under section 642(c), the amount of the modifications specified in paragraphs (5) and (6) shall be reduced to the extent that the amount of income which is paid, permanently set aside, or to be used for the purposes specified in section 642(c) is deemed to consist of items specified in those paragraphs. For this purpose, such amount shall (in the absence of specific provisions in the governing instrument) be deemed to consist of the same proportion of each class of items of income of the estate or trust as the total of each class bears to the total of all classes. (b) Income for purposes of this subpart and subparts B, C, and D, the term “income”, when not preceded by the words “taxable”, “distributable net”, “undistributed net”, or “gross”, means the amount of income of the estate or trust for the taxable year determined under the terms of the governing instrument and applicable local law. Items of gross income constituting extraordinary dividends or taxable stock dividends which the fiduciary, acting in good faith, determines to be allocable to corpus under the terms of the governing instrument and applicable local law shall not be considered income.”
Due to these crucial factors, our special copyrighted Spendthrift Trusts have become the preferred entity for asset protection and tax planning. These trusts provide tax advantages and ease of management, meeting the necessary requirements and standards.
COPYRIGHTED SPENDTHRIFT TRUSTS CHANGE STRATEGY
Old strategies involving leveraging cash gifts in irrevocable trusts to reduce asset value and utilize income and estate tax deductions for charitable gifts have become outdated and ineffective. Estate planning specialists note that taxpayers fall into two categories: informed and uninformed. The uninformed typically pay more taxes and are vulnerable to liability claims, whereas the informed are protected from such claims. Spendthrift Trusts can reduce tax burdens, deter claims, and limit liability.
INVESTMENT AND CONFIDENTIALITY
Trustees have unique powers granted by law within a properly created trust for investing in both real and personal property. Unlike wills, which often become public records through probate, trusts are not filed publicly. Legal Trusts are registered with the IRS using an EIN number, and although they must file a 1041 tax return annually, their details remain confidential and are not public record.
WHAT IS AN IRREVOCABLE TRUST AND WHAT ARE ITS TAX ADVANTAGES?
Choosing between a revocable and an irrevocable trust involves significant considerations. A revocable trust can be altered or dissolved by the Creator at any time, offering no tax benefits or legal protection from creditors. In contrast, an irrevocable trust cannot be changed once established; assets placed within it are managed by the trustee and are generally beyond the reach of creditors, providing substantial tax benefits and legal protections. The Master’s Spendthrift Trust features a Compliance Overseer© to ensure that trustees meet their fiduciary responsibilities.
SPENDTHRIFT TRUST REQUIREMENTS
Once created, the Spendthrift Trust cannot be altered, changed, modified, or revoked. All contributions to the trust are irrevocable. The Settlor/Grantor or Trustee may not be a beneficiary, nor manage the trust day-to-day.
SPENDTHRIFT TRUST ORGANIZATION
Now is the optimal time for estate planning and asset protection. A properly structured Spendthrift Trust Organization offers significant tax advantages, asset protection, privacy, and estate planning benefits. By transferring assets into such a trust, the Trustee maintains control over the trust assets without inherent liabilities. Assets held in trust are generally protected from bankruptcy, divorce, lawsuits, liens, levies, or death.
PROPERTY 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 debts incurred by the trustees or beneficiaries, and assets held by the trust cannot be seized to satisfy their debts.
TOTAL PRIVACY
One of the most fundamental American rights is financial privacy. Although Spendthrift Trust Organizations are subject to certain Federal Tax ID requirements for banking, their financial affairs are maintained in total privacy, eliminating paper trails to the individual.
PLAN ESTATES AND ASSET PROTECTION BEFOREHAND
The best time for estate planning and asset protection is before a crisis occurs. Spendthrift Trust Organizations offer the ultimate in tax advantages, asset protection, and privacy. These trusts have long been a well-kept secret among financially sophisticated Americans and are now accessible to everyone.
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