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 beauty of a DST is that with it each individual shareholder actually gets to own an equitable share of the DST anyway. 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.
The DST investments are considered in the IRS, in relation to the 1031 exchanges, as interests similar to direct interests in a real estate investment. This basically means that the properties held as DST properties qualify for 1031 exchanges for as long as the other requirements for the 1031 exchanges are met. 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.
One of the main benefits of the DST is the idea that it allows the investors an opportunity to hold a share in a property which is securitized.
A DST is as well beneficial for the fact that that it just well enough does away with the need to have a unanimous approval as is always the case with properties held in common interests before any decision is taken concerning the property. 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.
Limited personal liability is the other advantage of the DST investments. Where there is the trust going bankrupt, the liability resting on the investors is limited to their investment in the trust and not any liability past this is legal.