Thursday, July 06, 2006

Another niche use for a Private Annuity Trust

Last week I wrote about a Private Annuity Trust being used for the sale of oil rights on an individuals property. What are some other uses one might not immediately think of?
How about the sale of a race horse owner's business, including the ponies?
Some might just keep the business in the family, but what if the owner died and his wife just didn't want to maintain that particular lifestyle?
Assuming they built the business up and could make a hefty profit, they would experience a large capital gain and owe tons of taxes if they sold outright.
The Private Annuity Trust to the rescue.
Instead of paying a huge dollar amount immediately, the taxes would be spread over the remainder of the annuitant's lifetime. The headaches of the upkeep of the stables, horses and equipment would be gone, and a sizeable income stream would replace these.
There's a lot more details to the story, but you get the gist.
I had to wonder whether life at the track may have turned into an estate on Maui or something equally inviting.
Paula Straub
760-917-0858