Delaware Business Trust

A Delaware statutory trust (DST) is a legally recognized trust that is set up for the purpose of business, but not necessarily in the U.S. state of Delaware. It may also be referred to as an Unincorporated Business Trust or UBO.

A DST is easy to form and maintain. The DST Act does require that the trust have a Delaware resident trustee, but business decisions and management of the trust may be (and in the context of a structured finance transaction, typically are) delegated to out of state co-trustees and managers.

Companies are usually more tax-effective when income generated is retained to fund ongoing working capital requirements. In contrast, trusts are generally taxed at higher rates when profits are retained.

The Delaware Statutory Trust (DST) is a legal entity created and often used in real estate investing that allows for a number investors to pool money together and hold fractional interests in the holdings and assets of the trust.

An example of business trust assets might include stocks, cash, real estate, ownership in a company, or items of value. Depending on the terms in the declaration of trust, the trustees may have the rights to sell existing property, buy additional property, or try to expand the assets through business.

Among the chief advantages of trusts, they let you: Put conditions on how and when your assets are distributed after you die; Reduce estate and gift taxes; Distribute assets to heirs efficiently without the cost, delay and publicity of probate court.

Delaware statutory trusts are formed as private governing agreements under which either (1) property (real, tangible and intangible) is held, managed, administered, invested and/or operated; or (2) business or professional activities for profit are carried on by one or more trustees for the benefit of the trustor

A business trust is set up when the assets and property of a business corporation are entrusted to an appointed trustee. The trustees will manage the operation and assets of the business, not for their own profit, but for the profit of the beneficiaries.

Sometimes business owners create trusts for reasons other than avoiding taxes. Trusts can help manage family wealth for children who have not yet come of age.In certain circumstances, trusts can protect business assets from seizure by creditors in the event a business owner owes large, delinquent personal debts.