What You Should Know About Delaware Statutory Trusts
The laws in the state of Delaware have instituted the trusts which operate as trusts known as the Delaware Statutory Trusts. The Delaware Statutory Trusts are established with a particular purpose for the investment in real estate and with a more bias on 1031 exchanges.
The DST allows the individual investors to own an equitable share of the trust itself. The DST will then hold rights in real estate concerns and they will earn income from such real estate concerns and the income so earned will be distributed to the DST investors as per their allotted shares in the DST.
The DST practically allows you to get freed as an investor from the decision making and taking with the investment in the DST since these are taken by the trustees who are charged with the responsibility to oversee this. One other important fact about the DST is that it is a non-taxable concern thus allows the profits and losses from the investment to e passed through to the investors in it.
When we look at their relation to the 1031 exchanges, it is determined that any beneficial interest in a DST is considered as a direct interest in a real estate investment. The essence of all this is that your DST held properties are qualifying for 1031 exchanges for as long as you have them satisfying the other demands for the same exchanges. For this reason we can see the DST option as being quite ideal and super an option for the investor who wishes to settle for the investment in real estate but has some constraints and fears over time and management issues with the property. Get some of the most common benefits of the DST which make them a great alternative to many investors.
The fact that the DST properties are securitized, this means that the investor gets an opportunity to have a share to owning such kinds of securitized holdings in investments.
DST’s are as well a popular alternative for the reason that it will eliminate the need with commonly held properties which will demand for a unanimous approval. Every necessary decision concerning the property held under the DST is made by the signatory trustee and not the investors themselves.
Limited personal liability is the other advantage of the DST investments. In case of a bankruptcy, the liability to be borne by the investors do not go past the investments in the trust.