Finding suitable Delaware Statutory Trust investments can be challenging. Scouring through multiple DST offerings to find investment options that meet your investment criteria can be a difficult and time-consuming process. DST investors who are trying to place capital to complete 1031 exchanges also face the additional pressure of meeting inflexible Internal Revenue Service deadlines.
A Delaware Statutory Trust advisor can help you narrow down your options so you can perform due diligence on DST offerings and complete the rollover of your 1031 exchange sale proceeds in a compressed time frame. There are many other ways an experienced DST advisor can help facilitate the purchase of DST shares for 1031 exchange and accredited retail investors. Below we’ll take a look at some common ways Delaware Statutory Trust advisors typically assist individual investors.
4 Ways DST Advisors Help Their Clients
There are many ways that working with a Delaware Statutory Trust advisor can simplify the process of purchasing shares of a DST. Here are 4:
- Providing options. Your DST advisor should provide a breadth of potential investment options in order to find offerings in suitable markets and asset classes. Advisors who are limited to a small handful of potential DST offerings may not be presenting you with investment options that meet your needs for portfolio diversification or risk management.
- Education. Experienced DST advisors should be able to assist investors through every step of the process, from initial sourcing of DST offerings in suitable markets through purchase of shares of an appropriate investment vehicle that meets your goals and objectives. Along the way, your advisor should be able to provide reliable counsel about the tax treatment of your investment capital, potential returns and other important investment considerations.
- Experience. There’s no shortage of options when it comes to finding Delaware Statutory Trust investment options. However, each offering comes with a unique level of risk. An experienced DST advisor can help investors assess the risk potential associated with DST offerings to help find investments that pair well with an investor’s appetite for risk. Additionally, investors should be able to provide counsel about the full lifecycle of the DST investment process. Advisors also should be able to provide insight into how the property or properties held under trust were evaluated and selected by the DST sponsor.
- Integrity. Your DST advisor should always have your best interests in mind regardless of what offerings he or she can provide. Indeed, financial professionals are bound by a rigorous code of ethics that not only guides the counsel they provide but also overrides any personal considerations. Advisors should at all times strive to help investors find the most suitable DST offerings that maximize tax savings and present the ability to potentially manage risk.
The Bottom Line
Delaware Statutory Trust advisors often provide crucial insight and assistance for investors seeking to complete 1031 exchanges. They can help investors identify suitable replacement investments in appropriate amounts so investors can meet important deadlines and avoid having their exchanges disqualified. They should be well-versed in both partial exchanges and exchanges involving multiple properties.
Think of selecting a DST advisor like shopping for a new car. It would behoove investors to test-drive several potential DST advisors before selecting one. Seek out DST advisors with lengthy track records since they likely have the four attributes mentioned above, as well as the industry expertise and financial skills necessary to best help you find DST offerings that meet your investment criteria.
This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor.
Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation.
Costs associated with a 1031 transaction may impact investor’s returns and may outweigh the tax benefits. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities.
No public market currently exists and one may never exist. DST programs are speculative and suitable only for Accredited Investors who do not anticipate a need for liquidity or can afford to lose their entire investment.
There is no guarantee that the investment objectives of any particular program will be achieved.
All investments have an inherent level of risk. The value of your investment will fluctuate with the value of the underlying investments. You could receive back less than you initially invested and there is no guarantee that you will receive any income.