Trusts & Valuations
Home Tax rebates Retirement/Soc. Security New Business Form Loan Calculator Calculators 2022/2023 changes Links Business Questions Trusts & Valuations Defer tax



Have you been told by your neighbor that you should have a Living Trust? What is a Living Trust?  Is it right for you? Will a Living Trust save you tax dollars? Will it allow you to avoid Estate or Inheritance taxes?

For starters, a Living or revocable trust will not save you tax dollars and it will not allow you to avoid PA Inheritance tax.  The most that can be said for a Living trust is that it will allow your heirs to avoid proving or probating your Last Will & Testament if all of your probate assets have been transferred to your revocable trust.  In quite a few cases, some probate assets have not been transferred, and it will be necessary for your will to be probated at the local court house, nonetheless.

Must all wills be probated? No. Many wills need not be probated.  If your assets at death will pass to designated beneficiaries or by operation of law such as a Transfer on Death (TOD) title to your bank accounts or brokerage accounts, probating a will is unnecessary.

An irrevocable trust is one over which the grantor retains no control.  It is a separate entity requiring a separate federal I.D. number and tax returns.  The grantor cannot revoke his decision to create the trust.  After the grantor's death, if family dynamics are not as the grantor predicted, the terms of the trust cannot be changed, unless the courts approve a change.

A non-grantor trust is either a "simple" or "complex" trust.  Essentially, a simple trust must distribute all of it's annual income and a complex trust is allowed to accumulate income.

Real Estate Investment Properties

Gains are made at the time a property is purchased - more so than when it is sold.  Overpay for a property and there is little hope of selling for a profit.  How, then, do you buy at the right price and terms? Utilize the experience of professionals who know and understand gross or net income multipliers and cap rates.

Neill Werkheiser is active in assisting buyers and sellers of investment properties and operating businesses.  Having been involved in numerous transactions over 40+ years, he understands the valuation methods such as the Capitalization of Earnings method, the Excess Earnings method, Gross Multipler method and others.

Properly pricing an investment property for sale or making an offer to purchase investment property requires knowing how to calculate net income, how to apply multipliers, how to use cap rates and how to evaluate the condition of a property.

Yes, it is possible to avoid paying capital gains tax on the disposal of a property, other than your primary residence.  Proper use of IRS "like kind exchange" regulations must be employed, however.  Intermediary services such as title agencies generally assist taxpayers with this move.

Business Sales and Purchases

Business brokerage is the bringing together of buyers and sellers for the purchase and sale of operating businesses.  Determining the value of a business is much different that valuing real estate or investment property.    In this instance, you will be concerned with cash income streams, recast income, capitalized earnings and financing terms.  Needless to say, this is a specialized field that requires expertise.