---
title: Estate Planning Using 1031 Exchanges and Delaware Statutory Trusts
description: How to use the 1031 Exchange and Delaware Statutory Trust in estate planning for your heirs.
image: https://www2.1031dst.com/hubfs/Estate%20Planning%20(3).png
---
[(844-437-8103)](tel:8444378103)
-
-
- [Sign In](https://www.1031dst.com/sign-in/)
- [Browse Properties](https://www.1031dst.com/property-listings-directory/)
[](https://www.1031dst.com/)
- [Our Process](https://www.1031dst.com/our-process/)
- [About Us](https://www.1031dst.com/about/)
- [Sponsors](https://www.1031dst.com/sponsor/)
- Exchanges
- [1031 Exchange](https://www2.1031dst.com/a-guide-to-your-1031-exchange)
- [1033 Exchange](https://www2.1031dst.com/1033-exchange)
- [Delaware Statutory Trusts](https://www2.1031dst.com/abcs-of-dsts)
- [Opportunity Zones](https://www2.1031dst.com/opportunity-zones)
- [Glossary](https://www.1031dst.com/glossary/)
- [Properties](https://www.1031dst.com/property-listings-directory/)
- [Resources](https://www2.1031dst.com/resources)
- [Insights](https://www2.1031dst.com/insights)
- [Events](https://www.1031dst.com/events/)
- [Contact Us](https://www.1031dst.com/contacts/)
- [Our Process](https://www.1031dst.com/our-process/)
- [About Us](https://www.1031dst.com/about/)
- [Sponsors](https://www.1031dst.com/sponsor/)
- Exchanges
- [1031 Exchange](https://www2.1031dst.com/a-guide-to-your-1031-exchange)
- [1033 Exchange](https://www2.1031dst.com/1033-exchange)
- [Delaware Statutory Trusts](https://www2.1031dst.com/abcs-of-dsts)
- [Opportunity Zones](https://www2.1031dst.com/opportunity-zones)
- [Glossary](https://www.1031dst.com/glossary/)
- [Properties](https://www.1031dst.com/property-listings-directory/)
- [Resources](https://www2.1031dst.com/resources)
- [Insights](https://www2.1031dst.com/insights)
- [Events](https://www.1031dst.com/events/)
- [Contact Us](https://www.1031dst.com/contacts/)
- [Browse Properties](https://www.1031dst.com/property-listings-directory/)
- [Sign In](https://www.1031dst.com/sign-in/)
# Fortitude's Insights
[DST](https://www2.1031dst.com/insights/topic/dst) [1031 Exchange](https://www2.1031dst.com/insights/topic/1031-exchange) [Estate Planning](https://www2.1031dst.com/insights/topic/estate-planning)
# [Estate Planning Using 1031 Exchanges and Delaware Statutory Trusts](https://www2.1031dst.com/insights/estate-planning-using-1031-exchanges-and-dsts)
By [Daniel Raupp](https://www2.1031dst.com/insights/author/daniel-raupp) | 30, September 2022
[READ NOW](https://www2.1031dst.com/insights/estate-planning-using-1031-exchanges-and-dsts)
[](https://www2.1031dst.com/insights/author/daniel-raupp)
[Daniel Raupp](https://www2.1031dst.com/insights/author/daniel-raupp)
Tags: [DST](https://www2.1031dst.com/insights/topic/dst) [1031 Exchange](https://www2.1031dst.com/insights/topic/1031-exchange) [Estate Planning](https://www2.1031dst.com/insights/topic/estate-planning)
Many real estate investors focus on building wealth over time with the intention of passing their assets on to their heirs. However, without proper planning, your heirs could inherit un-welcomed financial burdens.
This is one of the reasons why many property investors recognize the value of 1031 exchanges as a powerful estate planning tool. By engaging in one or more 1031 exchanges throughout your lifetime, you can defer capital gains taxes and depreciation recapture on your investment properties *and* enable your heirs to inherit those properties without residual tax obligations.
### Deferring Taxes Through a 1031 Exchange
Section 1031 of the U.S. Tax Code allows investment property owners to defer capital gains taxes and depreciation recapture by exchanging their relinquished property for “like-kind” replacement property. Since you can invest the entire sales proceeds into a new property, engaging in a 1031 exchange can allow you to “buy up,” purchasing a [replacement property](https://www2.1031dst.com/insights/identifying-properties-in-a-1031-exchange) of higher value or better quality.
There’s no limit to the number of times you can engage in a 1031 exchange, so many investors use multiple exchanges over time and repeatedly defer capital gains and grow their assets.
### Step-Up in Basis Upon Death
Under current U.S. tax laws, dependent on structure of ownership, when a property owner dies, the property’s cost basis is stepped up to the fair market value on the date of death. Therefore, if your heirs were to sell the property right away, they would owe little to no capital gains taxes since the sales price would likely be close to the current fair market value.
If they decided to hold the property, they would only be responsible for capital gains taxes on the appreciation that occurs after the step-up. Your heirs could also consider using a 1031 exchange to purchase a replacement property, continuing the legacy of “buying up” tax-free.
### Estate Planning with DSTs
While the ability to potentially defer capital gains taxes for generations is undoubtedly an attractive estate planning strategy, many investors find that they no longer want to actively manage property investments as they age. This can make the prospect of holding properties throughout their lifetime unappealing. However, engaging in a 1031 exchange with a [Delaware Statutory Trust (DST)](https://www2.1031dst.com/abcs-of-dsts) as your replacement property can solve this problem.
A DST is a legal entity created under the laws of Delaware. The DSTS holds one or more income-producing commercial properties and meets 1031 exchange requirements for like-kind replacement property. The DST sponsor handles all of the decision-making and daily operations of managing the underlying properties in the trust, allowing investors to experience the benefits of owning real estate without the day-to-day hassles of property management.
DSTs have an added advantage over the [traditional 1031 exchange](https://www2.1031dst.com/a-guide-to-your-1031-exchange) as an estate planning tool. DST investors own fractional interests of the property in the trust, which can be split among heirs. This allows each heir to decide whether to stay in the 1031 exchange cycle or cash out, once that DST liquidates. Many estate planning attorneys have found this benefit can reduce disputes among heirs.
### Explore More Tax Advantages of Private Real Estate
While private real estate investments can offer some significant estate planning advantages, the potential benefits don’t end there. Investors may also be able to take advantage of additional tax efficiencies. To learn more about your options, download our free e-book, “[*Tax-Advantaged Investing: The Power of Private Real Estate*](https://www2.1031dst.com/the-power-of-private-real-esate-ebook).”
[Contact us today](https://www.1031dst.com/contacts/)to schedule a consultation!
---
Download Our Latest ebook to learn more!
[](https://cta-redirect.hubspot.com/cta/redirect/4583849/c42c6894-2ac4-444e-9b74-bc1c064130a7)
---
Because investor situations and objectives vary this information is not intended to indicate suitability for any individual investor.
The numerical example is for illustration purposes only as individual results may vary. Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated.
There are material risks associated with investing in real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal.
IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax concepts; therefore, you should consult your legal or tax professional regarding the specifics of your particular situation.
# [Daniel Raupp](https://www2.1031dst.com/insights/author/daniel-raupp)
Under Daniel Raupp's guidance since 2000, Fortitude Investment Group, LLC has guided clients into over $1 billion worth of securitized real estate investment offerings directly and indirectly, in both the DSTs for 1031 Exchanges and REITs. In the areas of real estate, tax advantaged investments, insurance, retirement, and estate planning, he is able to set up comprehensive, individually tailored client portfolios designed to help remove market volatility and maximize income potential without undue risk.
Inspired by his father’s dedication to customer service and hard work, Daniel directs a range of strategic initiatives in the firm to successfully leverage core competencies in real estate consulting, tax efficient investing, alternative investments, and operational excellence to create customer value. His credentials include a Series 7 General Securities Representative (GS) License, Series 24 Principal of General Representatives License, Series 63 Uniform Securities Agent License, and a Life/Accident and Health Agent License. [Check Daniel’s background on FINRA’s BrokerCheck.](https://brokercheck.finra.org/Individual/Summary/4079107)
This is for informational purposes only and is not an offer to buy/sell an investment. There are risks associated with investing in Delaware Statutory Trust (DST) and real estate investment properties including, but not limited to, loss of entire principal, declining market value, tenant vacancies and illiquidity. Diversification does not guarantee profits or guarantee protection against losses. Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. Because investors situations and objectives vary this information is not intended to indicate suitability for any particular investor. This information is not meant to be interpreted as tax or legal advice. Please speak with your legal and tax advisors for guidance regarding your particular situation.
Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. Insurance products offered through Concorde Insurance Agency, Inc. (CIA) Fortitude Investment Group is independent of CIS, CAM, and CIA.
### Subscribe To Our Blog
Thanks for submission!!
- Recent
- Popular
### Posts by Topic
- [1031 Exchange (117)](https://www2.1031dst.com/insights/tag/1031-exchange)
- [DST (54)](https://www2.1031dst.com/insights/tag/dst)
- [Delaware Statutory Trust (20)](https://www2.1031dst.com/insights/tag/delaware-statutory-trust)
- [Opportunity Zones (16)](https://www2.1031dst.com/insights/tag/opportunity-zones)
- [1031 (14)](https://www2.1031dst.com/insights/tag/1031)
- [Taxes (13)](https://www2.1031dst.com/insights/tag/taxes)
- [1033 Exchange (8)](https://www2.1031dst.com/insights/tag/1033-exchange)
- [Covid-19 (8)](https://www2.1031dst.com/insights/tag/covid-19)
- [Estate Planning (7)](https://www2.1031dst.com/insights/tag/estate-planning)
- [Real Estate Investing (7)](https://www2.1031dst.com/insights/tag/real-estate-investing)
- [1031 Exchange Deadlines (6)](https://www2.1031dst.com/insights/tag/1031-exchange-deadlines)
- [Landlords (6)](https://www2.1031dst.com/insights/tag/landlords)
- [Real Estate (6)](https://www2.1031dst.com/insights/tag/real-estate)
- [1031 Delaware Statutory Trust (5)](https://www2.1031dst.com/insights/tag/1031-delaware-statutory-trust)
- [1031 replacement property (5)](https://www2.1031dst.com/insights/tag/1031-replacement-property)
- [721 Exchange (5)](https://www2.1031dst.com/insights/tag/721-exchange)
- [Capital Gains (5)](https://www2.1031dst.com/insights/tag/capital-gains)
- [Private Real Estate (5)](https://www2.1031dst.com/insights/tag/private-real-estate)
- [Tax Relief (5)](https://www2.1031dst.com/insights/tag/tax-relief)
- [NYC Real Estate (4)](https://www2.1031dst.com/insights/tag/nyc-real-estate)
- [Private Placements (4)](https://www2.1031dst.com/insights/tag/private-placements)
- [2020 Election (3)](https://www2.1031dst.com/insights/tag/2020-election)
- [Biden (3)](https://www2.1031dst.com/insights/tag/biden)
- [Fortitude (3)](https://www2.1031dst.com/insights/tag/fortitude)
- [Inflation (3)](https://www2.1031dst.com/insights/tag/inflation)
- [Interest Rates (3)](https://www2.1031dst.com/insights/tag/interest-rates)
- [Investments (3)](https://www2.1031dst.com/insights/tag/investments)
- [PIG/PAL (3)](https://www2.1031dst.com/insights/tag/pig-pal)
- [Case Study (2)](https://www2.1031dst.com/insights/tag/case-study)
- [Depreciation Recapture (2)](https://www2.1031dst.com/insights/tag/depreciation-recapture)
- [Disaster Relief (2)](https://www2.1031dst.com/insights/tag/disaster-relief)
- [Multiple Owner Real Estate (2)](https://www2.1031dst.com/insights/tag/multiple-owner-real-estate)
- [Qualified Intermediary (2)](https://www2.1031dst.com/insights/tag/qualified-intermediary)
- [REIT (2)](https://www2.1031dst.com/insights/tag/reit)
- [Renter Protection Laws (2)](https://www2.1031dst.com/insights/tag/renter-protection-laws)
- [Retirement (2)](https://www2.1031dst.com/insights/tag/retirement)
- [1031 Delaware Statutory Trust Knowledge (1)](https://www2.1031dst.com/insights/tag/1031-delaware-statutory-trust-knowledge)
- [1033 (1)](https://www2.1031dst.com/insights/tag/1033)
- [Alternative Investments (1)](https://www2.1031dst.com/insights/tag/alternative-investments)
- [Boot (1)](https://www2.1031dst.com/insights/tag/boot)
- [Commercial Real Estate Transactions (1)](https://www2.1031dst.com/insights/tag/commercial-real-estate-transactions)
- [DST Sponsor (1)](https://www2.1031dst.com/insights/tag/dst-sponsor)
- [Diversification (1)](https://www2.1031dst.com/insights/tag/diversification)
- [FIRPTA (1)](https://www2.1031dst.com/insights/tag/firpta)
- [IRC 2704 (1)](https://www2.1031dst.com/insights/tag/irc-2704)
- [IRS (1)](https://www2.1031dst.com/insights/tag/irs)
- [Insurance (1)](https://www2.1031dst.com/insights/tag/insurance)
- [Long-Term Care (1)](https://www2.1031dst.com/insights/tag/long-term-care)
- [Multifamily Real Estate (1)](https://www2.1031dst.com/insights/tag/multifamily-real-estate)
- [Net Lease Investments (1)](https://www2.1031dst.com/insights/tag/net-lease-investments)
- [Passive Income (1)](https://www2.1031dst.com/insights/tag/passive-income)
- [Property Regulations (1)](https://www2.1031dst.com/insights/tag/property-regulations)
- [Reverse 1031 Exchange (1)](https://www2.1031dst.com/insights/tag/reverse-1031-exchange)
- [Step-Up in Basis (1)](https://www2.1031dst.com/insights/tag/step-up-in-basis)
- [Tenant-In-Common (1)](https://www2.1031dst.com/insights/tag/tenant-in-common)
- [Triple Net Lease (1)](https://www2.1031dst.com/insights/tag/triple-net-lease)
[](https://cta-redirect.hubspot.com/cta/redirect/4583849/2e9f6bdd-d0be-40a4-abf5-0ce73c867952)
#### Let Us Know What You Thought about this Post.
Put your Comment Below.
[Previous Post](https://www2.1031dst.com/insights/daniel-raupp/tax-efficient-growth-with-1031-exchanges)
##### [Tax Efficient Growth with 1031 Exchanges](https://www2.1031dst.com/insights/daniel-raupp/tax-efficient-growth-with-1031-exchanges)
[Next Post](https://www2.1031dst.com/insights/daniel-raupp/how-private-real-estate-can-help-diversify-a-portfolio)
##### [How Private Real Estate Can Help Diversify a Portfolio](https://www2.1031dst.com/insights/daniel-raupp/how-private-real-estate-can-help-diversify-a-portfolio)
### New York
- [(844-437-8103)](tel:8444378103)
- [1031@fortitudeinvestments.com](mailto:1031@fortitudeinvestments.com)
- [61 Route 25A Setauket, NY 11733](https://goo.gl/maps/bdbvzDBiRZxGNmDa7)
### New Jersey
- [(844-437-8103)](tel:8444378103)
- [1031@fortitudeinvestments.com](mailto:1031@fortitudeinvestments.com)
- [101 Cedar Lane, Suite 101 Teaneck, NJ 07667](http://go.techbear.com/55072)
### Florida
- [(844-437-8103)](tel:8444378103)
- [1031@fortitudeinvestments.com](mailto:1031@fortitudeinvestments.com)
- [3801 PGA Blvd. Suite 600, Palm Beach Gardens, FL 33410](https://goo.gl/maps/e58XUSTQEX29dTyHA)
### California
- [(844-437-8103)](tel:8444378103)
- [1031@fortitudeinvestments.com](mailto:1031@fortitudeinvestments.com)
- [2950 Buskirk Avenue, Suite 300 Walnut Creek, CA 94597](http://go.techbear.com/ccb7e)
[](https://brokercheck.finra.org/)
This is for informational purposes only and is not an offer to buy/sell an investment. Pictures used are for illustration purposes only and are not current offerings. Future offerings will vary and may change at any time. The companies depicted in the photographs and listed herein may have proprietary interests in their names and trademarks. Nothing herein shall be considered an endorsement, recommendation, or offer to purchase by Fortitude Investment Group, CIS, CAM and CIA, or the investment vehicles they may offer of such depicted companies. Further, none of the companies are affiliated with Fortitude Investment Group, CIS, CAM and CIA in any manner. [Concorde Investment Services, LLC 19500 Victor Parkway, Suite 550, Livonia, MI 48152.](https://goo.gl/Wvki2W)
Securities offered through Concorde Investment Services, LLC (CIS), member [FINRA](http://www.finra.org/)/[SIPC](https://www.sipc.org/). Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. Insurance products offered through Concorde Insurance Agency, Inc. (CIA) Fortitude Investment Group is independent of CIS, CAM, and CIA, all of whom are unaffiliated with third-party sites, cannot verify the accuracy of, nor assume responsibility for any content of linked third-party sites. Information available on third-party sites is for informational purposes only.
[Concorde's FORM CRS.](https://concordeis.com/formcrs.pdf)
DST Investments | 1031 Exchange Options – Fortitude Investment Group © 2026. [Privacy Policy](https://www.1031dst.com/investments/privacy-policy/)
```json
{
"@context" : "https://schema.org",
"@type" : "BlogPosting",
"author" : {
"@type" : "Person",
"name" : "Daniel Raupp",
"url" : "https://www2.1031dst.com/insights/author/daniel-raupp"
},
"dateModified" : "2023-07-12T19:37:15.506Z",
"datePublished" : "2022-09-30T13:15:00.000Z",
"headline" : "Estate Planning Using 1031 Exchanges and Delaware Statutory Trusts",
"image" : [ "https://www2.1031dst.com/hubfs/Estate%20Planning%20(3).png" ],
"mainEntityOfPage" : {
"@id" : "https://www2.1031dst.com/insights/estate-planning-using-1031-exchanges-and-dsts",
"@type" : "WebPage"
},
"publisher" : {
"@type" : "Organization",
"logo" : {
"@type" : "ImageObject",
"url" : "https://www2.1031dst.com/hubfs/Fortitude%20Investment%20Group%20Logo.jpg"
},
"name" : "Fortitude Investment Group llc."
}
}
```