Gus Yñiguez
Gus Yñiguez

What is a Delaware Statutory Trust (DST)?

A Delaware Statutory Trust (DST) is a separate legal entity created as a trust under Delaware statutory law, which allows investors to 1031 exchange into, as it qualifies as a “like kind” replacement property. Investors in a DST are beneficial interest owners of quality institutional grade commercial properties, which is treated as a direct interest in real estate, in which they enjoy the same tax benefits and monthly income, but without the management responsibilities and headaches. 

Key Benefits of DST 1031 Exchanges

  • No management responsibilities
  • Limited Personal Liability (via a non-recourse loan)
  • Diversification
  • Never have a failed 1031 exchange
  • Step up in cost basis upon death
  • Minimize chance of conflict between beneficiaries
  • Access to institutional-quality property
  • Lower minimum investments
  • Efficient Equalization of your Estate
  • Eliminate boot
  • Increase paid mothly
A typical 1031 exchange involving the eventual investment into a DST has three basic steps:
  • Exchanger sells property, known as the relinquished property, and proceeds are escrowed with a Qualified Intermediary
  • Qualified Intermediary, through a written agreement with the investor, transfers funds for purchase of replacement property
  • Exchanger receives a beneficial interest in a DST
Any questions? Contact me!