Joint Purchase & Remainder Interests

Although not a trust, the Joint Purchase Concept is similar to a remainder trust in its protective effect.

Here, the individual purchases a life estate in the asset (e.g. stocks, bonds, real estate or other income producing investments) and the children of the individual (or another third party) purchases the remainder interest in the property at the same time (each paying full value for the property interest purchased based on current Internal Revenue Service tables).

Once again, while the life estate held by the at-risk individual may be reachable by his or her creditors, the remainder portion should be protected.

A sale of a remainder interests in limited circumstances may also be utilized whereby the individual sells, for its fair market value, the remainder interest in an asset he or she already owns to his or her children (or other third party) while retaining the life estate.

This would have a similar result as the joint purchase of an asset in terms of added protection of the property.

Formerly, estate tax advantages were also obtained from the use of a joint purchase or the sale of a remainder interest.

However, with the enactment of Section 203(c) of the Internal Revenue Code, these advantages are no longer available.

If you or a loved one needs help with a situation involving one of these areas, please contact Thomas N. Silverman, P.A. at 561.775.7500 (24 hours) or

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