Pure Contract Trusts - Explained
Third-Party References - Click these links to read each reference.
Today, very few people know that they have a fundamental choice: to live their lives and conduct their businesses under common-law jurisdiction or under statutory jurisdiction. This section provides links to various third-party articles on the structure we endorse and utilize here at Asset Pro.
Did you know: Mutual Funds are commonly referred to as an unincorporated business organization or UBO's, also known as a Massachusetts Business Trust or MBT?
PCT01: Introduction to Trusts
SPECIFIC BENEFITS OF A PURE CONTRACT TRUST
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No federal or state / provincial income taxes.*
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No taxes on investment income.*
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No capital gains taxes.*
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No inheritance or estate taxes.*
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No expensive IRS / CRA appraisals.
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No public disclosures (financial privacy).
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No government reporting.
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Protects assets from court actions.
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Eliminates probate (and the waiting involved).
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Avoids transfer, estate, death, and inheritance taxes.
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Avoids liens, levies, and judgments.
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No forced asset division.
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No expensive litigation.
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No family (potential heirs) interference.
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Preservation of assets accumulated over a lifetime.
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Indefinite preservation of estate for descendants.
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Eliminates or greatly reduces attorney fees, accountant fees, and executor fees.
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Limited liability.
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A Pure Contract Trust can hold cash, real estate, stocks and bonds, life insurance, gold and silver, commodities, and virtually anything of value.
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A Pure Contract Trust bank account can be located at practically any bank.
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Can operate any legal business almost anywhere.
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Elimination of employee withholding taxes - if they become independent contractors.
* under certain conditions. Your tax professional can advise you on how best to rigoursly apply the tax code to your situation. Case law supports Pure Contract Trusts around the issue of taxation. Specifically, the courts have ruled on the validity of PCT's. In Weeks v. Sibley, (DC), 269 F 155W, "A Pure Trust is not illegal if formed for the express purposes of avoiding taxation."