As you consider investing through a Delaware Statutory Trust (DST), it's important to involve experienced professionals to help manage the legal and tax-related aspects of the process. One of these professionals would be a Delaware Statutory Trust attorney — a lawyer who is knowledgeable in the legal aspects of the investment. Hiring one can help you evaluate offering documents, understand your rights as a beneficial interest holder, and assess whether the DST aligns with applicable IRS guidance and your overall transaction objectives.
Check out the tips Realized 1031 has shared below for evaluating and selecting legal professionals familiar with 1031 exchanges and DST structures.
1. Experience in DSTs and 1031 Exchanges
While estate planning and tax law attorneys are competent enough to handle DSTs and 1031 exchanges, choosing one who specializes in these areas makes a lot of difference. 1031 exchanges and DSTs have lots of rules governing their structures and processes, with intricate requirements that must be followed to the letter. Any small issue could lead to major consequences, such as losing your tax-deferred status.
How do you know if a like-kind DST attorney has the necessary experience in these investment strategies? Ask them about their track record and examine these past deals. We also recommend asking the attorney to explain DSTs or 1031 exchanges and their possible tax consequences clearly and in a language accessible to you. A clear, accessible explanation of the rules and how they apply to your situation can be a helpful indicator of experience and fit.
2. Knowledge of Tax Laws and IRS Compliance
DSTs and 1031 exchanges are part of a larger tax landscape. As such, it’s important that your Delaware Statutory Trust (DST) attorney understands how these strategies fit into the wider tax code and can assist in navigating IRS rules and requirements. Plus, these rules can change or get amended unexpectedly. A competent DST lawyer must be able to stay updated with any legal developments and discuss how these changes can affect your investment.
3. Ability to Coordinate With Your Investment Team
More than knowledge of the DST process and associated laws, a good lawyer should have soft skills that allow them to work seamlessly with the rest of the professionals in your team. These include CPAs, financial advisors, and real estate brokers. As such, it’s important to look for an attorney who can communicate clearly and is available in various channels. Your lawyer should also be responsive to all parties involved and willing to cooperate in your best interest. Coordinated efforts between legal, tax, and financial professionals can help support a more informed and organized investment experience.
4. Transparent Fee Structure
In general, tax attorneys will charge between $200 to $500 per hour for their services. This amount can increase for those who specialize in DSTs or 1031 exchanges. Whatever the case, you should choose an attorney or law firm that is transparent about its fee structure, including the rates and what’s included in the service. Make sure to compare these rates to other DST attorneys to help you get a full picture of the average pricing.
5. Strong Reputation and Reviews
Before hiring a DST attorney, take time to research their reputation. Look for testimonials on their website, reviews on legal platforms, or referrals from trusted financial professionals. Positive client feedback can give you insight into how they communicate, how responsive they are, and how effectively they handle complex transactions.
Final Thoughts on How To Choose Your 1031 Delaware Statutory Trust Attorney
Experience in DSTs, knowledge of 1031 exchange laws, and adherence to IRS regulations are some qualities to look for when choosing a DST attorney. However, soft skills like communication and willingness to cooperate are also crucial for a streamlined investment process. Choosing an attorney with experience in 1031 exchanges and DSTs can help ensure your investment structure aligns with current tax rules and supports your broader financial planning efforts.
The tax and estate planning information offered by the advisor is general in nature. It is provided for informational purposes only and should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Article written by: Story Amplify. Story Amplify is a marketing agency that offers services such as copywriting across industries, including financial services, real estate investment services, and miscellaneous small businesses.
Sources:
https://victorytaxlaw.com/how-much-does-a-tax-attorney-cost
https://www.investopedia.com/financial-edge/0110/10-things-to-know-about-1031-exchanges.aspx
