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Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: myamnesia on May 10, 2016, 05:33:42 PM

Title: Delaware Statutory Trust
Post by: myamnesia on May 10, 2016, 05:33:42 PM: Hi,

Has anyone, in particular, California investors, set up a Delaware Statutory Trust for asset protection? We have multiple rentals plus brokerage accounts and we def don't want anyone getting their hands on any of it if a lawsuit is brought against us. We've discussed this with both accountant and lawyer, but would love to hear from anyone who did or did not set one up and why???

Thanks in advance :)
Title: Re: Delaware Statutory Trust
Post by: mooreprop on May 12, 2016, 07:44:04 AM: I think it sounds like a great idea. I have not yet set one up. Reason: Laziness
Please let us know how it goes!
Title: Re: Delaware Statutory Trust
Post by: tonysemail on May 12, 2016, 11:49:34 AM: I was reading about asset protection trusts last week.
I'm not sure why it's better than buying umbrella policies for liability protection.
Generally speaking, the usual advice is to incorporate your rentals in a LLC and purchase business umbrella policy to cover those assets.
Then separately purchase personal umbrella policy to cover your brokerage accounts and primary home.
Do you have so much assets that umbrella policies would be less cost effective than setting up trusts out of state or off shore?
Title: Re: Delaware Statutory Trust
Post by: myamnesia on May 17, 2016, 10:52:44 AM: Both our attorney and CPA say that an umbrella policy coverage wouldn't be thorough enough and insurance companies love to get out of paying if at at possible, at the end of the day we're not willing to rely on an umbrella policy alone. One of our properties has a lot of equity so wouldn't want to put that in the same LLC as our lower equity properties, CA has a franchise tax of $800 per LLC per year, whereas the DST has a $500 fee per year total, it also acts as an estate planning trust so the benefits are twofold. Set up costs aside seems like a no brainer for our long term buy and hold strategy...that's why I'm keen to see if anyone has any other viewpoints??

Thanks :)
Title: Re: Delaware Statutory Trust
Post by: tonysemail on May 17, 2016, 01:33:44 PM: it sounds like tax evasion to me, but then I'm no lawyer or CPA.
http://www.northwestregisteredagent.com/avoid-ca-franchise-tax.html
https://www.quora.com/Can-I-avoid-the-$800-California-franchise-tax-and-still-limit-personal-liability
Title: Re: Delaware Statutory Trust
Post by: jeromedawg on June 08, 2020, 11:49:47 AM: Sorry for resurrecting this but has anyone here put money into a DST? And if so, what are your thoughts on it?