4 Reasons Estate Attorneys Utilize DSTs for Legacy Planning

By Steve Haskell, Vice President at Kay Properties & Investments and The Kay Properties Team

Advisors at Kay Properties & Investments have worked closely with Estate Attorney’s to assist with their client’s legacy planning. 

The Delaware Statutory Trust can offer many potential benefits to investors. Below are four reasons estate attorneys incorporate DSTs in their client’s estate planning.

Everyone’s situation is unique. All investors should speak with their tax/legal advisor when conducting their own estate planning.

1. Potential tax benefits. According to the Internal Revenue Code 1014(a), when a person (the beneficiary) receives an asset from a giver (the benefactor) after the benefactor dies, the asset often receives a stepped-up basis to the market value at the time the benefactor dies. This often applies to DSTs as well. However, everyone’s tax situation is unique, so it advised that all investors speak to their own tax professional regarding their specific situation.

2. Avoid potential burdens of property management. Many investors do not mind managing their own properties. However, they fear the potential of leaving their spouse and or family with the burden of navigating through the nuances of property management while grieving the loss of a loved one. DSTs are considered passive investments that spare investor’s loved ones and or heirs form the stresses and burdens of property management.

3. Increased flexibility in assigning inheritance. Investors may place their investment in one property or diversify* between a multitude of properties. Clients can divide the shares equally among heirs, assign each heir a property, or use a variety of different legacy planning strategies. Some clients even involve their heirs in considering the DSTs they would potentially inherit one day.

4. Prevents infighting between heirs. Most estate attorneys have frightening stories of family feuds resulting from inheritance conflicts. A daughter may want to take over the management of her parent’s investment properties, but the other siblings wish to liquidate and pay off debt. A son may desire to keep the parent’s beach rental, but his sister needs the money to pay for her kid’s college. This often causes devastating consternation to exacerbate an already stressful situation.

DST are not suitable for everyone. However, for many heirs, DSTs may provide a turn-key options for passive income and offer the flexibility to choose what they wish to do with their inheritance without impeding on the priorities of the other heirs.  

If you wish to learn more about whether DSTs are an appropriate option for you or your clients, contact Kay Properties and Investments at www.kpi1031.com or 1 855- 899- 4597.

*Diversification does not guarantee profits or protect against losses.

About Kay Properties and www.kpi1031.com

Kay Properties is a national Delaware Statutory Trust (DST) investment firm. The www.kpi1031.com platform provides access to the marketplace of typically 20-40 DSTs from over 25 different DST sponsor companies, custom DSTs only available to Kay clients and a DST secondary market. Kay Properties team members collectively have over 400 years of real estate experience, are licensed in all 50 states, and have participated in over 30 Billion of DST 1031 investments.

Diversification does not guarantee profits or protect against losses. All real estate investments provide no guarantees for cash flow, distributions or appreciation as well as could result in a full loss of invested principal. Please read the entire Private Placement Memorandum (PPM) prior to making an investment. This case study may not be representative of the outcome of past or future offerings. Please speak with your attorney and CPA before considering an investment.

There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential distributions, potential returns and potential appreciation are not guaranteed. For an investor to qualify for any type of investment, there are both financial requirements and suitability requirements that must match specific objectives, goals, and risk tolerances. Securities offered through FNEX Capital, member FINRASIPC.