Happy Sunday!

Today I wanted to talk about something I’m seeing all over TikTok (yes, I’m on TikTok – we post a lot of content there) – the non-grantor irrevocable discretionary complex spendthrift trust.

The people talking about these types of trusts claim when you create one they will give you asset protection and allow you to pay ZERO income taxes.

When they set this up for you they also want to create a series of LLCs in different states.

They talk about Internal Revenue Code section 634 over and over and over again as proof that this scheme will work.

There’s just one small problem.

It’s all garbage.

As much as we’d like to all avoid income taxes, you’re going to have to pay them unless you use the strategies allowed by the IRS to legally reduce your taxable income (if you make most of your money via W2 this will most likely be with real estate strategies, just FYI).

When it comes to estate planning, trust planning, income taxes, and pretty much everything else in life, remember it’s okay to get the idea from TikTok, but you should probably verify what you’ve heard with a professional to make sure it’s legit.

Have a great day!

Cheers,

Christopher Small
Founder/CEO
CMS Law Firm LLC

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