A Concise Introduction to Tax-Saving Trusts – Exclusive Interview Insights.

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In this interview, we delve into the world of tax-saving trusts with the insightful Sally Gimon. Through a detailed transcript, Sally shares her expertise and sheds light on the concepts surrounding these unique trusts. She explains the difference between family trusts and the specialized spendthrift trust she works with, which has historical origins and operates within the framework of federal contract law. Sally highlights how these trusts offer substantial opportunities for federal tax savings, cater to various professions and investments, and provide privacy protection and safeguarding against judgments. Furthermore, she addresses common misconceptions, clarifies how funds can be accessed, and offers advice for individuals evaluating trusts. With Sally’s extensive knowledge and experience, this interview provides valuable insights into the benefits and practical aspects of tax-saving trusts. 

Could you please explain your role and how you assist your clients? 

I specialize in helping clients save federal taxes through a unique spendthrift trust. In the United States, the majority of trusts, about 97%, are what we call family trusts. These trusts are primarily designed to avoid probate after someone passes away but don’t continue across generations and cannot be utilized again. The type of trust I work with has its origins in England during the time of King Henry the Eighth. It emerged during a period when King Henry faced challenges for beheading his wife and subsequently sought to establish authority over the Lords and ladies by establishing the Church of England. This trust draws upon historical precedents, including the Magna Carta, and operates within the framework of federal contract law. 

The business trust I specialize in offers individuals who earn a 1099 income a significant opportunity to save at least 70% on their federal taxes year after year. This is applicable to various professions like salespeople and affiliate marketers. On the other hand, the beneficial trust caters to investors engaged in activities such as passive investment, real estate, cryptocurrencies (investing and mining), stock market day trading, options, forex, and more. Through the beneficial trust, investors can save on capital gains (both short-term and long-term), interest income, dividend income, rental income, and royalties. Both the business trust and the beneficial trust provide substantial opportunities for federal tax savings. Moreover, these trusts offer privacy protection for your information and, most importantly, safeguard against the payment of judgments in the event of a lawsuit. While I cannot prevent you from being sued, the trust ensures that you won’t be liable for any judgments.

What problem does the trust solve? 

The trust primarily solves the problem of organizing and structuring assets. By placing all assets within the trust, individuals can effectively avoid inheritance tax since the trust holds ownership of the assets. This creates a secure and structured environment. The trust is irrevocable, similar to the trust used by the Rockefellers, known as the Office. Their trust has a rich history spanning seven generations and includes nearly 400 beneficiaries. 

One common issue I frequently come across in the realm of real estate involves the 1031 exchange. It’s crucial to ensure that the 1031 exchange remains ongoing, as once it ceases, the tax bill becomes due. I often encounter situations where adult children find themselves dealing with incapacitated or deceased parents and suddenly facing an unexpected tax bill. Many investors are also unaware that they are subject to paying 23.8% in short-term capital gains tax on their profits. For those selling a business, long-term capital gains tax at 15% or 20% can result in substantial amounts owed, potentially reaching thousands of dollars for some individuals. 

How can the funds be accessed? 

To access the funds, you will need to obtain a new Employer Identification Number (EIN) for the trust. In the case of the business trust, this EIN will cover various expenses like your home, electricity, water, and mortgage payments. While there may be a due-on-clause for mortgages, as long as the mortgage is paid, it doesn’t pose a problem. However, it’s important to note that the beneficial trust does not cover general funds or food expenses. 

Nevertheless, you can utilize a tax-free demand letter within the trust. This letter can be written for any amount within the trust and can be used to cover specific expenses. Let me provide an example: I own a 2015 car that was originally purchased for $27,500. I can write a demand letter for up to $27,500 to cover my food expenses. Additionally, if you have children under the age of 18, their expenses are fully covered by the trust. Furthermore, if your children are over 18 and attending college or a technical school, the trust will also pay for their education. Essentially, the trust assumes responsibility for all covered expenses. 

In my personal case, my car is owned by the trust, and it covers various costs such as registration fees, windshield repairs, insurance, and fuel expenses. While the trust doesn’t directly save me on taxes in this particular instance, as a real estate investor, the funds flow through the trust, providing me with convenient access to the money.

Are there any misconceptions about how the trust operates? 

Absolutely, there are numerous misconceptions surrounding the trust. Some people mistakenly believe it’s illegal or dismiss it as a scam. I recently had a conversation with a gentleman who owns five apartment buildings in the Bronx, and even his CPA was convinced that it was illegal. In such cases, I often recommend reading the book “Scott and Ascher on Trusts, Fifth Edition,” which includes an entire chapter dedicated to the spendthrift trust. This type of trust originated in England during the time of King Henry the Eighth, and the law firm I work with holds the patent for this trust. In fact, they have a trust that has been in existence for 350 years and is still going strong, passing from one generation to another. The trust operates under the principles of contract law, and it can only be changed if Congress decides to do so. 

Let me provide further clarification. Let’s say, hypothetically speaking, that Congress decides to change the trust on March 17th, 2024. Any Spendthrift Trusts started before that date will continue on, it is a contract and cannot be changed. No new Spendthrift Trusts could be written after that date. It’s important to note that this trust has been brought before the Supreme Court on two separate occasions, and in both instances, it received favorable rulings. The Supreme Court recognizes that the trust can enter into contracts and conduct business on its behalf. Therefore, the trust is as legal as it can possibly be. 

Many people fail to realize that the IRS tax code was established only in 1913, during our approach to World War I. However, this trust predates the IRS tax code, and affluent families like the Rockefellers and others ensured their long-term financial security by utilizing such trusts. 

At what level of wealth would you suggest people start considering this as an option? 

To explore this option, it’s important to note that both the business trust and the beneficial trust require an upfront cost of $20,500. Therefore, I generally recommend individuals to start considering it when they have around $50,000, although it often makes more financial sense at the $70,000 mark. 

I frequently collaborate with business brokers who assist in the sale of businesses. For example, I recently helped a gentleman sell a restaurant with a total value of $3,000,000, including all equipment, food, and recipes. By utilizing the trust structure, he was able to save $460,000 at a 15% tax rate or $600,000 at a 20% tax rate. The exact figures may vary, but the key point is that he saved a six-figure amount in taxes. These savings are significant, particularly for a 69-year-old individual and his 68-year-old wife, as they contribute to their retirement funds.

How did you become familiar with the trust? 

I first learned about the trust through Garrett Gunderson’s book titled “What Billionaires Do” (formerly titled “What Would the Rockefellers Do?”). Although the book focuses on the Rockefellers Spendthrift Trust, called the “Office,” I delved into it, conducting extensive research by reaching out to people and conducting online searches. During this process, I came across a law firm in Houston that held the patent for the trust. I became their client and subsequently started teaching a mastermind within my real estate group. Real estate investors often face significant tax burdens, making this trust an attractive solution. 

This discovery brought about a major change in my life, and in March of 2022, I founded “the trust is you.com” with the goal of helping as many people as possible save money. Since then, I have been assisting various investors. For example, I recently worked with a crypto investor who had planned to sell a portion of his cryptocurrency stocks to fund his son’s college education. However, he wasn’t aware of the substantial capital gains tax he would incur. When he reached out to me, we set up the trust and transferred assets to his exchange, allowing him to navigate the situation more effectively. 

What advice do you have for individuals evaluating trusts? 

When evaluating trusts, it’s crucial to understand that the majority of trusts in the United States, around 97%, serve the purpose of avoiding probate and then dissolve. In contrast, the spendthrift trust is a legally recognized trust, patented in the IRS tax code 643(b), and has even been presented before the Supreme Court on two occasions. It’s essential to seek accurate and reliable information. 

For example, I recently spoke with a gentleman who operates a transportation company. He believed that having an LLC provided sufficient protection, but unfortunately, an LLC doesn’t shield personal liability. In his case, he is considering establishing a business trust to minimize his personal liability. By doing so, the trust would cover insurance costs in case of an accident and any resulting damages, ensuring that he cannot be personally sued. In a country where lawsuits are prevalent, with statistics suggesting that one in three people will face a lawsuit in their lifetime, it’s vital to make informed decisions and obtain the right information. 

It’s important to differentiate between trustworthy providers and those who may not offer comprehensive services. In my case, I work with a team that includes trust attorneys from a patent law office. I recently had a conversation with an individual who had paid a significant

amount of money to a trust provider but was now unable to reach the attorney. While I’m doing my best to assist him, I don’t have detailed knowledge about the specifics of his trust. However, I’m providing him with as much information as possible to guide him through the situation. 

How can people access further information? 

To access more information, you can visit my website, thetrustisyou.com. On the website, you’ll find valuable resources and details about the trust. I also host a podcast called “Stop Paying Capital Gains Now!” where I discuss relevant topics and share insights. Additionally, I conduct a live Q&A session every Monday at 8:00 PM Eastern Time. During these sessions, I go through my slide deck and address any questions that participants may have. These avenues provide opportunities to learn more and gain a deeper understanding of the trust and its benefits.


Jeremy Baker is an Author and contributor to Small Business Trendsetters and Business Innovators Magazine, covering Influencers, Innovators and Trendsetters in Business, Health, Finance and Personal Development.