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. 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. With the trust, it turns to hold rights in various real estate interests and with the incomes coming from these real estate interests so held by the DST, the investors will in turn receive their equal share of income from them all in proportion to their shares in the DST.
The DST operates in such a manner as to free the investor of the responsibility of taking decisions relating to the investment as it always has a trustee who is charged to oversee these on their behalf. The other important fact to consider about the DST is the fact that it is a non-taxable entity and as such the incomes and losses eared from the trust is passed 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. As such we can say that for investors who will to get into the real estate business but are however not ready to face the responsibilities these decisions bring, then they have a very good alternative for investment in the DST. Get some of the most common benefits of the DST which make them a great alternative to many investors.
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. In case there is a decision to be taken over the held property, the investors basically have no part to play in this and the responsibility does not lie with them as the party to take the decisions is the assigned signatory trustee.
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.