Wiser Wealth: How a Delaware Statutory Trust Can Help with Your Retirement Plans

Senior Couple Playing Video Games

As you get closer to retirement it is not all or nothing when deciding how much work you take on. You can certainly slow down somewhat while continuing to be active in your career.

And for real estate investors, that could mean reducing the amount you have to do as a landlord maintaining properties. That is why the Delaware Statutory Trust (DST) is an appealing option to consider.

Daniel Goodwin of Kiplinger elaborates, saying that while it might be tempting to simply sell off the properties you have, you will then face hefty capital gains taxes.

Alternatively, you could take that same step, but then sell through a 1031 Exchange and then reinvest in passive DST real estate. This protects your funds from taxes, while simultaneously allowing you to continue to earn more through the DST.

That last part is what appeals to so many aging investors right now. Many worry about selling their properties because they realize they may have lost value, which could result in effectively forfeiting hundreds of thousands of dollars. So a compromise that protects that money while also allowing it to build is much more agreeable.

If that sounds like a solution to concerns you have had, a talk with a certified public accountant or a firm that specializes in these types of investments, could help you figure out if this strategy works for your long-term plans.

Frederick Hubler, Chief wealth strategist for Creative Capital Wealth Management Group has been using accredited investments (and DST’s) since they became available. “For working professionals who want to build up real estate, a DST allows them to convert cash into passive real estate investments but still be “taxed” as real estate. For our clients who have owned investment real estate and have taken all the depreciation they can (or no longer want to be landlords) then selling their property and using the 1031 to exchange into a DST will allow them to defer the capital gains.”

Hubler goes on to say, “current tax law also allows a “step up” at death so those deferred gains will be eliminated when it is inherited by the heirs.”

Though do bear in mind that a DST can only be used by accredited investors, individuals or couples with either a net worth of over $1 million or an income of more than $200,000 ($300,000 for couples) per every two years. So now is the time to take stock of what you have, and figure out where you want to go next with it.

To read more about how a DST could aid in your retirement plans, check out Kiplinger’s article about it here.


Fred Hubner

Want to know if you’re on the right path financially? Fred Hubler’s Second Opinion Service (SOS) is a no-obligation review with Creative Capital Wealth Management Group‘s Chief Wealth Strategist. It’s simply not possible to get a reliable second opinion from the same person who gave you the first one. Click here to schedule an SOS meeting.





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