DSTs & Estate Planning

DST inter­ests can become part of an investor’s broad­er estate and wealth-trans­fer plan. Pas­sive man­age­ment may be use­ful for investors who want to reduce direct prop­er­ty respon­si­bil­i­ties while main­tain­ing real estate expo­sure.

Plan­ning may involve trust own­er­ship, ben­e­fi­cia­ries, val­u­a­tion, income dis­tri­b­u­tions, basis con­sid­er­a­tions, estate-tax expo­sure, liq­uid­i­ty, and what heirs may do when a DST prop­er­ty is even­tu­al­ly sold.

Fed­er­al tax rules can pro­vide basis adjust­ments for inher­it­ed prop­er­ty, but the result depends on the asset, own­er­ship struc­ture, cur­rent law, and the investor’s cir­cum­stances.

Key Point: Coor­di­nate DST own­er­ship with the investor’s estate attor­ney, CPA, and finan­cial pro­fes­sion­als rather than treat­ing it only as an income invest­ment.

Relat­ed DSTNews.org Arti­cles

• DSTs in Estate Plan­ning: Under­stand­ing the Step-Up in Basis Advan­tage

• What Heirs Need to Know About Inher­it­ed DST Inter­ests

Edu­ca­tion­al use only. This mate­r­i­al is not tax, legal, account­ing, or invest­ment advice. Pri­vate real estate invest­ments involve risk, includ­ing pos­si­ble loss of prin­ci­pal and illiq­uid­i­ty.