So, you are tired of managing your business and you want to take a step back and enjoy what you already built? There is nothing wrong with that. After managing a business for so long and dealing with all the problems and issues that are raised by running a company, is absolutely normal to desire a break. But everyone knows that once you became a business person, you will never go back to enjoying sitting peacefully all day and doing nothing.
There is a solution to generate passive income without much trouble and still getting to work in the business field. This solution is represented by DSTs. A DST, also known as a Delaware Statutory Trust, is a type of passive real estate investment that could help you gain profit after you retired. It is a convenient option that won’t require a lot of effort. Here is what you need to know about one:
What does it mean?
A DST is a type of agreement in the real estate industry that has only one purpose – business. The Delaware Statutory Trust is not limited to Delaware or the United States and it can be used in many other areas. A DST is a specific type of private agreement where the property or asset is managed or operated according to the preferences of the trustor of this agreement. If you previously worked in the real estate field, you might already know how these things function. Most accredited investors seek to get rid of taxes and maximize the capital gains. This is all about a 1031 exchange. DSTs are suitable for passive 1031 exchanges as they offer a tax shelter. DST can only be applied to commercial properties. You should consider a Delaware Statutory Trust (DST) if you plan on switching your business profile or focus on passive income.
What does a DST imply?
Business entities can take advantage of a DST, taking into account the many benefits it brings to the table. First of all, the trustee or the trustees (because DSTs allow more than just one trustee) are protected from any sort of liability that might come in the way, such as bond obligations. The beneficial owner will also be protected, considering the fact that the DST offers asset protection and the creditor is not capable of taking over the trust property. Plus, a DST is operated as a separate legal entity, so the process followed is short and easy to understand. The number of investors is not limited in any way.
Major benefits of DSTs
First of all, you get to defer taxes, which is essential for a retired business person. Why? You won’t have to pay additional money in order to close such a trust. No need for meeting annually with the trustees, no need to pay franchise taxes, the minimum investment requirements are minimum – you have all the reasons to try a DST after retiring.