The Fundamentals About Delaware Statutory Trusts
The Delaware Statutory Trusts also known as DST are, as can be told by the name, state entities established under the state laws of the state of Delaware and as such operate as legal entities. DST is particularly established for the sake of investment in real estate market and tends to have a more keen emphasis 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. Mark this other yet very important fact about the trusts which is concerned with their taxable position and they are considered as entities which are non-taxable which therefore means that the profits and losses accrued from the trusts are passed through to the investors.
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. Thus we can say that the investors who wish to get into real estate holdings and want to stay away from the responsibilities of making decisions and the management duties they have a very suitable option in the DST to invest in this market. Following are some of the advantages attracting a number to DST’s.
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.
The other benefit of the DST is the fact that it eliminates the requirement for a unanimous approval. The decision making over the property held under the DST lies in the powers of the signatory trustee and as such relieving the investors of the responsibility over the property so held.
One more benefit of the DST’s is the element of the limits it gets to cases of liability. In the event of a bankruptcy of the trust, the loss or the assets which can be attached as to the bankruptcy are those of the investors which were in the concerned trust and do not extend to the any other asset outside of the trust gone bankrupt.