No, You Can't Do This With a Trust | with Attorney John Strohmeyer

As a probate real estate agent, I often find out about litigation where somebody tried to do something a trust that didn't work. And we have an attorney today here who specializes in helping educate us on no, you can't do that with a trust. We have attorney John Strohmeyer returning back to our podcast Probate

Weekly. John, what can you not do with a trust that you see people try to do? >> Well, Bill, it's great to be back. Thanks for having me back. What I see people do is think that they're going to not pay any income tax by setting up a trust and then, you know, exploit what the IRS doesn't want

you to know and what the the billionaires are using to not pay any tax, their tax secrets. The short reality is no, you can't use a trust to avoid income tax. The way the system works, you're going to be paying income tax and if you layer a trust in, you're just going to change who's paying the tax but

not that the tax gets paid. >> So, you're changing who's paying the tax and the rate might be different based on the entity or the limits might be different based on the entity, but at the end of the day, there's income, somebody's going to claim it and somebody's going to pay taxes on it.

>> Right. There's I mean, the what we'll end up talking about is something that's known as the non-grantor irrevocable complex discretionary spendthrift trust, which is a real type of trust, but what it doesn't do is allow you to defer income tax payments past the taxable year in which those that income is received.

>> And that's what you see >> lots of people online who claim otherwise, but unfortunately, uh, it's not a good place to be. >> Well, you know, my father my late father was an attorney used to say, you can deduct whatever you want. The question is whether you can audit it and whether