Legal structure
Delaware Statutory Trust (DST)
A trust formed under the Delaware Statutory Trust Act, providing a flexible framework for holding property and issuing beneficial interests.
Typical purpose
Fractional ownership of investment property; securitizations; 1031 exchange replacement property.
How it operates
A sponsor/trustee manages property; investors hold beneficial interests.
Who might use it
Accredited investors, sponsors, institutional parties.
Assets commonly involved
- ◆Commercial real estate
- ◆Financial assets
Potential advantages
- ◆Statutory clarity
- ◆Potential 1031 eligibility if structured correctly
Legal and tax limitations
- ◆Investor control is very limited
- ◆Illiquid
- ◆Securities law applies to offerings
Establishment & administration
- ◆Delaware filing
- ◆Governing instrument
- ◆Securities compliance
Common mistakes
- ◆Underestimating illiquidity
- ◆Ignoring sponsor risk
Questions to ask a professional
- ◆Which state's law should govern this arrangement, and why?
- ◆Who should serve as trustee and successor trustee?
- ◆How will the trust be taxed at the federal and state level?
- ◆What assets must be retitled, and who handles the transfers?
- ◆What ongoing records, filings, and reports will be required?
Educational information only. Trust law varies by state; consult qualified legal, tax, and financial professionals before acting.
Next step
Move from understanding to a properly reviewed plan.
Discuss a Delaware Statutory Trust (DST) With TangierEducational information only. Not legal, tax, or investment advice.