A Delaware Statutory Trust is a legal trust that owns institutional-grade real estate, and investors buy beneficial interests in it, often as the replacement property in a 1031 exchange. For many sellers, it converts direct ownership into passive ownership without triggering the tax.
Wiz's tip
Read the offering documents the way you would read a contract, and know the sponsor's track record before you invest. A DST is an excellent solution for many investors, and a wrong match for others.
How a DST works
Multiple investors buy fractional interests in a trust that holds real estate, often a portfolio of commercial or multifamily assets managed by a sponsor. You become a passive owner with monthly income potential and fractional ownership in properties that would otherwise take millions to buy alone, and your DST interest can qualify as like-kind for a 1031 exchange.
The trade-offs
DSTs trade control for passivity. You cannot make day-to-day management decisions, liquidity is limited, and the sponsor and property performance determine the outcome. Fees and minimums vary, and the structure is not right for every investor or every situation.
Where Michael's role fits
Michael educates clients on how DSTs fit a complete legacy plan and coordinates with financial advisors and attorneys so the structure is chosen deliberately, not pitched. The goal is deferring and minimizing capital gains with the right asset, not just any qualifying one.