Delaware Statutory Trusts (DSTs) Explained: A Passive Approach

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20 Aug, 2026
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Many real estate investors eventually reach a point where they are tired of the “Terrible T’s”—tenants, toilets, and trash. If you want to transition from an active landlord to a passive investor without triggering a massive tax bill, a Delaware Statutory Trust (DST) might be your ideal replacement property in a 1031 exchange.

A DST is a legally recognized trust that allows investors to hold a fractional interest in institutional-quality, professionally managed real estate. Asset classes typically include Class-A multifamily apartment communities, net-leased retail centers, and industrial facilities.

Because the IRS recognizes DST interests as “like-kind” real estate, they perfectly satisfy 1031 exchange requirements. Investors can enjoy potential monthly distributions and property appreciation without ever having to answer a late-night maintenance call. At Customized 1031, we provide access to vetted DST sponsors, helping you build a diversified, passive real estate portfolio tailored to your retirement goals.