Delaware Statutory Trusts are not well understood but are becoming more widely used by businesses and individuals alike.
While they have been around for a long time and are considered one of the most popular trusts available today, DSTs remain shrouded in mystery to many potential investors and business owners.
Even worse, there continue to be misconceptions about what a Delaware Statutory Trust is and how it operates. This article will give you the things you need to know about DSTs and put an end to any confusion surrounding DSTs.
1. They Are Not Just Tax Shelters
While tax shelters are one of the numerous benefits a DST provides, this asset protection tool also offers many other benefits to investors.
DSTs are an excellent way for estate planning, allowing trust owners to have more control over the distribution of their assets without having to pay taxes on them while they are being distributed.
DSTs also protect against lawsuits, creditors, and bankruptcy. If your DST is written correctly, you will be able to save your assets from anyone attempting to seize them, and you will also be able to receive distributions on them while they are protected.
2. DSTs Are Not for Everyone
DSTs were created with the intent of providing asset protection for business owners and investors. They can provide a variety of benefits that allow DST owners to enjoy tax-free operation and guarantee that your DST will distribute its net income in the form of dividends.
Also, DSTs can be used to hold assets for future distribution, and DSTs provide many other benefits that significantly reduce the tax burden on DST investors. DSTs were created to provide a higher level of asset protection than LLCs offered, and DSTs may be used as an alternative if your state does not allow for the creation of LLCs.
DSTs can also provide you more flexibility than LLCs in some cases. DST investors do not have to worry about their DSTs being taxed, but DST investors cannot have DSTs taxed at the DST level. DST owners must pay taxes on DST income in their individual or personal capacity..Therefore DST properties for sale DSTs are not for everyone.
3. Ownership of DSTs Is Difficult
If you want to protect your DST and all of the benefits it provides, then you must make sure that your trust is written correctly.
DSTs should not be considered unless you have the trust drafted by a professional specializing in DSTs and beliefs, so your DST can provide legal protection from the moment it is created through to the distribution of its assets.
DSTs can be a great asset protection tool, but DSTs do not provide the same level of protection as LLCs. DST owners must remember that DSTs are governed by trust law, and they will be required to follow specific rules.
DST investors must keep up with their DST’s annual filings, and DST investors should also be aware that DSTs must pay taxes at the DST level. DST owners should be prepared to take care of certain legal matters to ensure their DST continues to benefit them after creating their DST.
4. DSTs Are Not Just for Businesses
DSTs are great tools to protect your assets from creditors and lawsuits. DSTs do not have to be used by businesses, either.
DSTs can protect a variety of different types of assets, including but not limited to: personal property, professional practices, patents, real estate investments, or anything else that you may want to be protected from outside parties trying to seize.
DSTs are great for protection because they can be customized to fit your circumstances, and DSTs come with all of the benefits mentioned above.
5. DSTs Will Drain Your Estate
DSTs can help you avoid paying estate taxes, provide creditor protection, distribute cash for you to have more control over your assets, and can provide other benefits as well.
DSTs will also allow you to own multiple DSTs, which means that your estate will continue to grow without having to pay taxes on the assets inside of the DSTs until you distribute them.
So don’t let DST misconceptions keep you from taking advantage of DSTs and all of the benefits they provide; DSTs are complex legal documents that can do a lot for you.
DSTs may not be for everyone, but DST owners enjoy many great benefits, including asset protection for their DST assets. DSTs also make it easy to avoid paying estate taxes, creditors, or lawsuits.