If you are looking for a way to protect your assets, it is time to learn about Delaware Statutory Trusts. A Delaware Statutory Trust is an excellent way to protect your family’s future. You can use this type of trust to help save on estate taxes and avoid probate. Here, we will discuss seven requirements that need to be met to form a Delaware Statutory Trust.
1. Your Trust Must be Created Under Delaware Law
Most people are surprised to learn that they cannot form trust in their home state. Instead, it would help if you created the trust under the law of another state. If you want to create a Delaware Statutory Trust, your trust document must comply with Delaware Statute. One significant difference between other trusts and the Delaware Statutory Trust is that the trustee of a DST does not have to be a Delaware resident.
2. You Must Have At Least One Trustee Who is a Resident of Delaware
Even though the trustee does not have to be a Delaware resident, you must still have at least one trustee resident of Delaware. If you want to be a trustee of your trust, you have no choice but to become a Delaware resident. Having a Delaware resident as the trustee means that they are subject to the laws of this state. It also means that a judgment creditor cannot easily reach assets held by your trust if those assets are located in another state.
3. You Must Have a Delaware Address for Service of Legal Process
Since you cannot file your trust in your home state, you must give Delaware legal process authority to accept any legal documents on your behalf. This includes court orders and summons regarding lawsuits filed against the trust. You can use any address in Delaware for this purpose, even your home address. However, many people choose to use a post office box, especially if they are worried about someone filing a lawsuit against the trust.
4. You Must Have a Delaware Statutory Trust Tax ID Number
Whenever you create a business entity, the state in which you register it will issue a tax identification number to that company. That same company must use this tax ID when filing its taxes. This is also true for Delaware Statutory Trusts. If your DST generates income, it will need to pay taxes on that income just like any other business. If you use an accountant, they will need the trust’s tax ID number to file its taxes.
5. You Must Appoint a Delaware Registered Agent for Service of Legal Process
Since your DST will be formed under Delaware law, this means that it must have a registered agent located in this state. The role of the registered agent is to accept any summons or other legal documents that are filed against the statutory trust. If you appoint your accountant as your DST’s registered agent, then you can rest assured knowing that this individual will be there to accept important legal documents on your DST’s behalf.
6. You Must Have Your Trust Document Notarized
A notary public is a person who is authorized to validate the authenticity of a signature. To form your trust, you will need to have your trust document signed in front of a notary. This step ensures that your statutory trust will be legally binding. In addition, if someone challenges the validity of your DST, then having it signed in front of a notary will help prove that it is indeed valid under Delaware law.
7. You Should Use the DST to Hold any Asset, Including Real Estate
After you have complied with all of the requirements, you will form your Delaware Statutory Trust. This trust can be used to hold any asset, including real estate. There are many DST properties for sale in Delaware right now. If you are interested in purchasing a property through your trust, then be sure to work with a qualified real estate agent familiar with DSTs.
The Delaware Statutory Trust is a unique trust type that offers its owners several benefits. If you are thinking of forming a trust, then be sure to consider the Delaware Statutory Trust. This trust could be the perfect solution for your needs with its many advantages.