Total Financial Solutions President/CEO Arif Halaby is talking about how people are using a variety of trust accounts to their benefit when it comes to SALT, or state and local tax, deductions.

“What is the SALT deduction, and how are people finding a creative way around it?” said Arif Halaby, a Certified Estate Planner, during a recent “Total Financial Solutions Safer Money Hour” on KHTS.

The CPA Journal defines the SALT deduction as “the itemized deduction for state and local income, sales and property taxes,” and Halaby noted that trusts play a large part in using these deductions to a person’s benefit.

Related: Total Financial Solutions: What Every Parent Should Do Before Leaving Money To Their Kids

“You’ll hear people talk about having a series of trusts, and what that does is it just basically puts them in a place where they can start making some of these deductions work in their favor,” explained Jeff Girard, Halaby’s co-host. “They have different types of trusts that do different things.”

While the job of each trust is unique to its specific type, Girard continued that trusts gives individuals “the ability to put their real property into these entities. They have to file their own tax return, they have their own sets of rules, but the nice part is, you can kind of split that up amongst multiple trusts.”

For instance, Halaby noted that a revocable living trust can be used for a person’s home and as a way for income to go to their children when they pass away, and it can be changed while the person is still alive.

However, once the person passes away, nothing can be added to or removed from the trust, as it instantly becomes an irrevocable trust after their death.

“Wherever the assets are, wherever everything sits at that moment when they pass away, whoever the beneficiaries are, it’s over, it’s done,” Halaby said. “You cannot add extra, take away or do anything like that, so that is very important.”

Calling trusts “an important part of your financial life,” Halaby noted that those facing significant taxation are “getting around this” by using a grantor or non-grantor trust, which he defined as “taxable entities where the assets are now owned by the trust.”

While these trusts typically receive more deductions for their properties, Halaby noted that they require their own tax return.

Though there are what’s known as “wealth advisors” out there who offer services on everything from living trusts to estate planning to stocks, bonds, annuities and more, Halaby cautioned against choosing someone who does everything and specializes in nothing.

“You have to ask yourself, ‘Okay, I get it, you are probably licensed to do everything and you might even be okay and pretty good at some things, but what are you great at?’” Halaby said. “Don’t tell me you can do everything, because there are opposites. You can’t be an expert in the brain and neurosurgery and also be an amazing expert in podiatry. They are two different parts of the body, they use two different systems.”

As a Certified Estate Planner, Halaby noted he has a deep understanding of trusts and the way they work and can be used for a person’s benefit, and also frequently works with elder law attorneys who write up the trusts in the first place.

One of Halaby and his team of financial professionals’ specialties is reviewing estate plans and trusts, highlighting certain aspects that can be strengthened or should be changed, according to Girard.

“We do not create trusts for people, but we can review them and say there might be some points of interest that you want to go back and talk to your … attorney, because in some cases, we’ve seen page one contradicted by page two,” he said.

Halaby concluded, “When you reach age 65 or 70 or whenever you choose to start taking money out, there is no do over when you are building the right layers of trust. Now I am a Certified Estate Planner. What does that mean? It means I understand trusts and we work with attorneys.”

In addition to reviewing trusts and estate plans, Total Financial Solutions prides itself in helping its clients design a higher income strategy, protect their principal and lock in their gains, all while securing reliable income for retirement.

For a free consultation, contact them by calling 888-99-RETIRE or by visiting their website www.TFSwealth.com.

Total Financial Solutions offers assistance with preparing for retirement in Santa Clarita and the surrounding valleys. Santa Clarita financial professional Arif Halaby, a Certified Estate Planner, and Total Financial Solutions staff work with people of all ages, helping them protect, grow and preserve their assets through an individualized approach. As a well-known financial professional, Arif Halaby is also the host of “Total Financial Solutions Safer Money Hour” on KHTS AM-1220. Launched in 2004, the show offers listeners retirement planning tips and guidance for dealing with today’s ever-changing financial needs.  

Total Financial Solutions, Inc.

24322 Main Street

Newhall, CA 91321

661-753-9683

800-990-7344

Total Financial Solutions – Newhall

https://www.youtube.com/watch?v=xtUwhLFNZTs

Arif Halaby, Total Financial Solutions, Financial Planning, Planning for Retirement, Retirement Planning