Archive for the ‘Consumer beware’ Category

A Matter Of Trust … or is it ?

Tuesday, March 9th, 2010

More a consumer warning, I digress a bit here on a topic indirectly related to home ownership … the matter of trust(s) …. (thank you Billy Joel).

There are a goodly number of snake oil vendors catering to everyone’s fantasy that you can lower or eliminate your tax bill putting your home in a legal Trust of some kind.

No surprise when it involves an attorney, establishing a Trust is expensive, depending on the complexity of your situation and what you’re trying to achieve.   One or two thousand dollars or more is not uncommon.   But as usual, Buyer Beware, and make sure you retain a lawyer that will back up their work and not just tell you what you want to hear while they’re collecting on their invoice.

Not that it’s encased in concrete, the following is the IRS take on Trusts as a tax avoidance strategy (notice that they use the word “evasion”).   As always, do your own due diligence and also retain good legal counsel.   Establishing a Trust that will withstand the scrutiny of IRS will need more than a boilerplate form bought on eBay.

IRS View on Trust Tax Evasion Schemes  (source :

  • Trust/estate matters are the third highest area of growth among top CPA firms.
  • Domestic trusts filed 3.6 million Form 1041 returns in 2003; the third most frequently filed income tax return behind individual and corporate returns.
  • Since the mid-1970s the number of Form 1041 returns filed has doubled and there has been a proliferation of abusive trust schemes marketed to avoid or evade income taxes.