What is a Delaware Statutory Trust (DST)
A Delaware Statutory Trust (DST) is a legally recognized trust that is set up for the purpose of business, but not necessarily in the U.S. state of Delaware. It may also be referred to as an Unincorporated Business Trust or UBO.
Delaware Statutory Trusts (DST) are formed as private governing agreements under which either
- property (real, tangible, and intangible) is held, managed, administered, invested, and/or operated; or
- business or professional activities for profit are carried on by one or more trustees for the benefit of the trustor entitled to a beneficial interest in the trust property.
Delaware Statutory Trust (DST) investments are offered as replacement property for accredited investors seeking to defer their capital gains taxes through the use of a 1031 tax deferred exchange and as straight cash investments for those wishing to diversify their real estate holdings. The Delaware Statutory Trust (DST) property ownership structure allows the smaller investor to own a fractional interest in large, institutional quality, and professionally managed commercial property along with other investors, not as limited partners, but as individual owners within a Trust. Each owner receives their percentage share of the cash flow income, tax benefits, and appreciation, if any, of the entire property.
The Delaware Statutory Trust (DST) ownership option essentially offers the same benefits and risks that an investor would receive as a single large-scale investment property owner, but without the management responsibility. DST Investments are located throughout the United States. Property types may include multifamily apartment communities, office buildings, industrial properties, multi-tenant retail, student housing, assisted living, self-storage facilities, medical office, single tenant retail properties, and others.
History of the Investments
The concept for business trusts, especially those that involve the holding of property, dates back to 16th century English Common Law. In Delaware, it was not until 1947 that Common Law began recognizing statutory trusts. No legal recognition of statutory trusts existed until the passage of the Delaware Statutory Trust Act (DSTA), 12 Del. C. 3801 et. Seq., in 1988. Under The Act, developed on the premise of trust law, statutory trusts were now recognized as their own legal entity, separate from their trustee(s), offering freedom from the corporate law template. Within the tradition of trust law, freedom of contract allows the trustee(s) to structure their entity in a way that is most beneficial to the relationship of all parties and their expertise, while offering liability protection similar to that of a Limited liability company or Partnership. Since the year 2000, Delaware Statutory Trusts (DST) have increasingly been used as a form of tax deferral, asset protection, and balance sheet advantages in real estate, securitization, mezzanine financing, real estate investment trusts (REITs), and mutual funds. Massachusetts, another state that has trust law, refers to its legal entity as a Massachusetts business trust. Most states, however, still rely on Common Law to oversee the trusts within their jurisdiction.
Delaware Statutory Trust (DST) Investments Under Investigation By Galvin Legal, PLLC
- BR Diversified Net Lease Portfolio DST – Investor Alert
- BR Town & Country Corporate Center DST – Investor Alert
- BR Sunrise Parc DST – Investor Alert
- BR Sonoma Pointe DST – Investor Alert
- BR Riverside DST – Investor Alert
- CF Towson Multifamily DST – Investor Alert
- CF Star Multifamily Portfolio DST – Investor Alert
- CF Net Lease Portfolio VI DST – Investor Alert
- CF Net Lease Portfolio IV DST – Investor Alert
- CF Net Lease Portfolio III DST – Investor Alert
- CF Net Lease Portfolio II DST – Investor Alert
- CF Net Lease Portfolio I DST – Investor Alert
- CF Net Lease Portfolio V DST – Investor Alert
- WG DST 1 – Investor Alert
- CS1031 MOB TX V DST – Investor Alert – UPDATED
- BR Quinn35 DST – Investor Alert
- BR Plaza Gardens DST – Investor Alert
- BR Nashville Stonebrook DST – Investor Alert
- BR Mesa Ridge DST – Investor Alert
- BR Meadows DST – Investor Alert