Deferred Sales Trusts vs. Deferred Income Trusts: What I Actually Recommend 2026

Kevin asked John about deferred sales trusts - so he's breaking down why he steers clients away from the classic DST structure and toward its much better cousin: the deferred income trust. In this video, you'll learn: → Why John doesn't recommend deferred sales trusts out of Utah (the fee structure, the trustee problem, and why the trustee ends up as the real beneficiary) → What a deferred income trust actually is and how it works as an installment sale alternative → Why a buyer who wants cash — not seller financing — doesn't kill the deal: you substitute a trust in place of the buyer and still get decades of tax deferral → Why control over the trustee matters, and exactly where the legal line sits between "suggestion" and "order" → The gain threshold where these trusts actually make financial sense (hint: it's not for small deals) → Why irrevocable trusts are expensive, permanent, and not something to enter into lightly → A shoutout to Todd Van Meter, a non-lawyer resource who knows this space well — and why you still need a real trust attorney anyway One objection Kevin's question raised: what if the buyer doesn't want to do seller financing? Maybe they've got cheap bank financing lined up, or they're paying cash and have zero interest in carrying a note. That doesn't kill the strategy — you substitute a trust in place of the buyer. You sell the property to the trust (say, on a 30-year interest-only balloon), which gets you income and decades of tax deferral. The trust then turns around and sells the property for cash to the original buyer — they're out of the picture at that point. The trust reinvests the proceeds according to terms set up front when the trust was formed. Here's the nuance that trips people up: you don't have direct control anymore once that trustee is in place. You can't tell them what to do — you can make suggestions, and you can fire the trustee if you're unhappy. But there's real case law on exactly how much "suggestion" is allowed before it functionally becomes an "order." Cross that line, and the legal separation between you and the trust starts to erode — which unwinds the tax and asset-protection benefits the whole structure exists to create. ⚠️ Educational content only — not legal or tax advice specific to your situation. Trust law is state-dependent and the details matter enormously. Always work with a qualified attorney in your jurisdiction before acting on anything here. Want the full deep dive? John goes into a lot more depth on this topic — including the full slide deck from his Advanced Strategies Conference in Dallas — inside his Inner Circle. 👉 https://www.taxreductionlawyer.com/in... ──────────────── 00:00 Intro — Kevin's question about deferred sales trusts 01:03 Deferred income trusts: the better, cheaper cousin 02:12 Why John doesn't recommend deferred sales trusts out of Utah 03:10 The aggressive fees and the trustee-as-beneficiary problem 04:00 Why it's called "deferred income trust" (dodging Utah's trademark) 04:40 What a deferred income trust actually is (installment sale explained) 05:50 What if the buyer wants cash instead of seller financing 06:30 Trustee control: suggestion vs. order 07:05 How long the deferral can run — 4 years to 30+ 08:05 Why irrevocable trusts are expensive and permanent 08:35 The gain threshold where this actually makes sense 09:20 The main use case: selling rentals without a 1031 10:40 Todd Van Meter shoutout — and why you still need a real attorney 12:35 Where to go deeper: Inner Circle Join the Tax Q and A as a guest on Wednesday July 26th 2026: https://www.taxreductionlawyer.com/in... - guest pass