Common Misconceptions About Delaware Statutory Trusts

We con­tin­ue with our series of edu­ca­tion­al posts for Jan­u­ary 2026 and will attempt to clar­i­fy a few of the mis­con­cep­tions (some ref­er­ence as myths) of Delaware Statu­to­ry Trust (DST).  Ref­er­enc­ing the mis­con­cep­tions as myths may be a lit­tle dra­mat­ic.

Jan­u­ary 27, 2026

By Al DiNi­co­la, AIF®
1031 Tax Deferred Exchange Spe­cial­ists & DST Advi­sor
NAMCOA® — Naples Asset Man­age­ment Com­pa­ny®, LLC
Secu­ri­ties offered through MSC-BD, LLC, Mem­ber of FINRA/SIPC

It is not the sort of myths regard­ing Jan­u­ary. For a lit­tle lev­i­ty here are the Jan­u­ary far-fetched and mis­lead­ing Jan­u­ary state­ments.

1. “Every­one quits their New Year’s res­o­lu­tions by Jan­u­ary 15.”
2. “Jan­u­ary is the most depress­ing month of the year.”
3. “You must start the year with a strict bud­get or you’ve already failed.”
4. “Gyms are unbear­able all Jan­u­ary.”
5. “Jan­u­ary is the best time to make big life changes.”
6. “Noth­ing pro­duc­tive hap­pens in January—it’s a slow, dead month.”
7. You get the pic­ture!

Progress can be made at any time of the year if you under­stand the process. As a brief intro­duc­tion, Delaware Statu­to­ry Trust (DSTs) should not be a blan­ket rec­om­men­da­tion for all investors. How­ev­er, for the right investor they could be a solu­tion to a cur­rent our future prob­lem they antic­i­pate but must be under­stood. DSTs are often mis­un­der­stood some­times by investors and also some­times by pro­fes­sion­als. Well-mean­ing CPAs may not grasp the full intent of the DST espe­cial­ly when uti­lized in con­junc­tion with a Sec­tion 031 exchange.

Myth #1: DSTs Are REITs

Prob­a­bly one of the first com­par­isons is that DSTs and REITs are inter­change­able in their appli­ca­tion. They are not the same nor are they inter­change­able. DSTs involve direct real estate own­er­ship, not shares. That is why a DST qual­i­fies for a §1031 exchange. In a REIT you pur­chase shares. Recent­ly there may have been some con­fu­sion because there is an exit strat­e­gy that some spon­sors of DSTs will include in their offer­ing that enables the own­er of a DST upon exit to do a sec­tion 721 UPRETI. We will address sec­tion 721 exit strate­gies in future posts.

Myth #2: DSTs Are Illiq­uid For­ev­er

Many real estate invest­ments are illiq­uid, mean­ing unlike mutu­al funds or stocks where you can call your bro­ker and sell and set­tle in one to three days real estate as well as DST’s take a longer peri­od of time or a longer cycle pri­or to them being sold. DSTs are illiquid—but they have defined exit strate­gies. The exit strate­gies for DST’s may be any­where from 5 years, 7 years or as long as 10 years. This is why we ref­er­enced in a pre­vi­ous post that DSTs are not rec­om­mend­ed for investors who need liq­uid­i­ty. The exit strate­gies for many DST include cash out options, 1031 exchanges to oth­er DST’s, 1031 exchanges into tra­di­tion­al real estate, and poten­tial­ly option­al or manda­to­ry sec­tion 721 uprates.

Myth #3: DSTs Are Too Risky

As advi­sors we always look at suit­abil­i­ty and estab­lished risk pro­files for all new clients and investors. Risk exists in all invest­ments, and noth­ing is guar­an­teed. How­ev­er, the risk is dif­fer­ent and poten­tial­ly not greater. Advi­sors well versed in DST due dili­gence will eval­u­ate investor risk pro­file and make the prop­er rec­om­men­da­tion on a case-by-case basis.

Myth #4: DSTs Are Only for the Ultra-Wealthy

It is true that DSTs require that investors be accred­it­ed investors. The def­i­n­i­tion of accred­it­ed investor is sin­gle per­son earn­ing $200,000 or if a cou­ple $300,000 for the past two (2) years. Or and that’s an impor­tant word or a net worth $1 mil­lion exclud­ing your pri­ma­ry res­i­dence. DST min­i­mums often range from $100,000 to $250,000, some a lit­tle long greater than that amount. How­ev­er there have been DSTs that will han­dle much small­er amounts to sat­is­fy indi­vid­ual investors who want to avoid cap­i­tal gain on cash remain­ing from a 1031 exchange which is ref­er­enced as boot. We have suc­cess­ful­ly assist­ed investors with amounts as low as $25,000.

Con­clu­sion

Clar­i­ty replaces fear. DSTs deserve evaluation—not dis­missal.

As always con­tact us for more infor­ma­tion and a com­pli­men­ta­ry con­sul­ta­tion.

NAMCOA® is a SEC reg­is­tered invest­ment advi­so­ry firm that pro­vides com­pre­hen­sive port­fo­lio man­age­ment, finan­cial plan­ning, and fidu­cia­ry deci­sion-mak­ing ser­vices on behalf of retire­ment plan spon­sors. Our Dif­fer­ence is sum­ma­rized by our fidu­cia­ry approach which enables us to bet­ter meet port­fo­lio and retire­ment plan objec­tives, result­ing in stronger risk adjust­ed returns for investors and peace of mind for Clients. We also focus on alter­na­tive real estate invest­ment. Many real estate investors are seek­ing tax deferred solu­tions uti­liz­ing §1031 exchanges or Oppor­tu­ni­ty Zones.

Alter­na­tive invest­ments and DSTs are not for all investors.  The acqui­si­tion of a cer­tain alter­na­tive invest­ments includ­ing DSTs is for accred­it­ed investors only.  Con­tact your invest­ment advis­er for addi­tion­al details on how a DST may be a solu­tion to your §1031 Exchange and suit­ed for your invest­ment future. For more infor­ma­tion on how to prop­er­ly set up an IRC §1031Tax Deferred Exchange or if you are an accred­it­ed investor and would like addi­tion­al infor­ma­tion on a DST con­tact Al DiNi­co­la at 239–691-8098 or email adinicola@namcoa.com.

This is not an offer to pur­chase or solic­i­ta­tion to pur­chase any secu­ri­ty, as such be made only through an offer­ing mem­o­ran­dum or prospec­tus.  Invest­ing in secu­ri­ties, real estate, or any invest­ment, whether pub­lic or pri­vate, involves risk, includ­ing but not lim­it­ed to the poten­tial of los­ing some or all your invest­ment dol­lars when you invest in secu­ri­ties. You should review any planned finan­cial trans­ac­tions that may have tax or legal impli­ca­tions with your per­son­al tax or legal advi­sor.   NAMCOA, LLC is a Reg­is­tered Invest­ment Advi­sor, reg­u­lat­ed by SEC (Secu­ri­ties and Exchange Com­mis­sion). Our com­pa­ny mail­ing address is 999 Van­der­bilt Beach Road, Suite 200, Naples Flori­da 34108. Secu­ri­ties Offered through MSC-BD, LLC, Mem­ber of FINRA/SIPC. 5 Cen­ter­pointe Dri­ve, Ste. 400 Lake Oswego, OR, 97035MSC-BD, LLC and NAMCOA are inde­pen­dent­ly owned and are not affil­i­at­ed.

Thank you.