Latest / Money to Give / Ep. 53 Delaware Statutory Trusts Are Changing Real Estate And Legacy Planning with Ray DeWitt

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Ep. 53 Delaware Statutory Trusts Are Changing Real Estate And Legacy Planning with Ray DeWitt · Money to Give

• 0:05
  Speaker 1: What if the key to unlocking a more peaceful retirement
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  Speaker 1: and a more generous legacy was hidden inside the real
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  Speaker 1: estate you already own. Welcome to Money to Give with
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  Speaker 1: me Rick Peck, the philanthropy guy with over twenty years
• 0:18
  Speaker 1: in the nonprofit sector. I have seen hundreds of millions
• 0:21
  Speaker 1: of dollars transferred from donors to nonprofits. I have learned
• 0:25
  Speaker 1: a lot along the way that I want to help
• 0:27
  Speaker 1: convey to you, my loyal listeners. In this podcast series,
• 0:30
  Speaker 1: we talk about one how nonprofits can most effectively showcase
• 0:34
  Speaker 1: their mission and vision and raise as much money as possible.
• 0:37
  Speaker 1: Two how donors and potential donors can make the greatest
• 0:41
  Speaker 1: impact possible in the world, and three how professional advisors,
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  Speaker 1: including philanthropic advisors, can offer the most up to date
• 0:48
  Speaker 1: information and services to their clients. So join us here
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  Speaker 1: each episode for more of that giving failing. In today's conversation,
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  Speaker 1: I'm joined by Ray de Witt, founder of the ten
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  Speaker 1: third one DST Group, who has turned his years in
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  Speaker 1: financial planning into a mission to help investors think differently
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  Speaker 1: about real estate, taxes and purpose. Ray explains how tools
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  Speaker 1: like the Delaware Statutory Trusts or DSTs are changing the
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  Speaker 1: way people manage their wealth, offering passive income, tax efficiency,
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  Speaker 1: and even opportunities for charitable giving. Together, we explore how
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  Speaker 1: these strategies not only solve financial headaches, but also open
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  Speaker 1: doors for generosity, legacy, and impact.
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  Speaker 2: Let's begin, So, Ray, thanks for stopping by the booth
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  Speaker 2: here at the Wall Street Conference. Happy to have you,
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  Speaker 2: and you and I met before the conference. It's just
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  Speaker 2: funny that we walked into each other. Yeah, but I
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  Speaker 2: just thought, maybe you can give the audience a little
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  Speaker 2: bit of your background and then we could talk about
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  Speaker 2: the problems or the kind of the issues that you
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  Speaker 2: see in your area of expertise.
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  Speaker 3: Yeah. My background been in financial services for a long time,
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  Speaker 3: over twenty years. I let you know, I'm a Utah
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  Speaker 3: I live in the Salike area. Yeah. I was a
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  Speaker 3: kind of your traditional bread and butter financial planner, and
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  Speaker 3: over a decade ago, I kind of discovered that, you know,
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  Speaker 3: all my clients that really have money is in real
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  Speaker 3: estate or their business, and they've got other problems besides
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  Speaker 3: their four oh one K their mutual funds, and so
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  Speaker 3: I just felt like I was doing it at the
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  Speaker 3: service and not in the right space, and frustrated with
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  Speaker 3: my career. I just didn't like financial planning anymore. Yeah,
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  Speaker 3: And I started learning about all these really cool private equity,
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  Speaker 3: real estate products and other alternatives that solved more than
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  Speaker 3: just an investment need. They also saw the tax need
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  Speaker 3: and a comfort need for clients. Because if someone's a
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  Speaker 3: real estate investor, he doesn't want to sell it all
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  Speaker 3: and give his financial advisor to put it in annuities
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  Speaker 3: and beautiful funds. That he made his wealth in real estate,
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  Speaker 3: he wants to probably stay there. So I started learning
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  Speaker 3: about different, you know, products that I felt could help
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  Speaker 3: somebody and it's more than just you know, raising money
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  Speaker 3: for some mutual Yeah.
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  Speaker 2: So, no, that's great. You start of found your niche
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  Speaker 2: and it sounds like it's an area that people want
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  Speaker 2: to know more about. And I know you and I
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  Speaker 2: have talked about this before, but real estate in general,
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  Speaker 2: of all the asset classes that Americans have, real estate
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  Speaker 2: seems to be the largest asset class, just outpaced retirement plans.
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  Speaker 2: So it kind of goes well with what you were saying,
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  Speaker 2: which is you were talking about investment portfolios and now
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  Speaker 2: real estate. So just talk a little bit about that.
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  Speaker 2: It just maybe how you sort of slid into where
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  Speaker 2: you are and then a little bit about the need
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  Speaker 2: as you see it are kind of the opportunities as
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  Speaker 2: you see it out there.
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  Speaker 3: Yeah, I left the bank as with a major banks
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  Speaker 3: as a wealth manager forum. I started my own firm
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  Speaker 3: and a guy, a sales rep, showed up in my
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  Speaker 3: office one morning with donuts, started talking to me about
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  Speaker 3: ten thirty one US changes and a thing called the
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  Speaker 3: Delawares after Tory Cruster DST. And I was like, what's
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  Speaker 3: the ten thirty one to change? Yeah, and you started
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  Speaker 3: telling me. I was like, yeah, that's great, It's kind
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  Speaker 3: of dumb, you know whatever. Thanks for the donuts. We'll
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  Speaker 3: be in touch. The next nine I went to a
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  Speaker 3: cocktail party and I met that guy. He told me
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  Speaker 3: over the last feol months he had sold sixty five
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  Speaker 3: rental properties and was so sick of being a landlord,
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  Speaker 3: but he ended up paying all the taxes and didn't care,
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  Speaker 3: and he sure wished there was some products he could
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  Speaker 3: have ten thirty went changes to and my head literally
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  Speaker 3: almost like exploded with holy crap. I just met this
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  Speaker 3: guy yesterday and he told me about this thing, and
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  Speaker 3: I looked at how the real estate market in Utah
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  Speaker 3: is just just just going insane. And I started looking
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  Speaker 3: into this more. I'm like, you know what, the baby
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  Speaker 3: boomers are the ones we're hiring. We're caught in my
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  Speaker 3: financials try and grew up the wave, the great wave
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  Speaker 3: of four oh one k rollover. Well, that that's happening.
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  Speaker 3: But it turns out the baby boomers on almost fifty
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  Speaker 3: percent of all of the real estate in his country,
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  Speaker 3: and they're getting older, they're wanting to retire. They're sick
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  Speaker 3: of the toilets, tenants and trash. Or you live in
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  Speaker 3: a different product country, the termites, you know. And I thought, wow,
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  Speaker 3: I think I'm onto something, and nobody knows what this is.
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  Speaker 3: So I threw myself in stumbled around the dark for
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  Speaker 3: a year and a half, no idea how to market
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  Speaker 3: or do it. But I figured it out. It was
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  Speaker 3: the best decision I ever made for myself financially, and
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  Speaker 3: I'm also very satisfied with what I do because I'm
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  Speaker 3: helping people who own properties. They want to sell them,
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  Speaker 3: they don't want to pay taxes. A ten thirty one
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  Speaker 3: exchange is great because it's sell one profit investment property,
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  Speaker 3: buy another investment property. But the problem is you're trading
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  Speaker 3: one headache for another. Yep, we'll enter the Delaware Statutory Trust.
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  Speaker 3: I say, it's like etctern for your headache. So now
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  Speaker 3: you you do a ten thirty a shade, but you
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  Speaker 3: now put your money to a purely, completely passive real
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  Speaker 3: estate portfolio. You continue to get a check every month
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  Speaker 3: or I know it's twenty twenty five a bank deposit.
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  Speaker 3: You get all the same tax breaks, the depreciation schedule
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  Speaker 3: carries forward all the benefits. We could even replace debt
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  Speaker 3: with DSDs, which is really powerful if you have a
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  Speaker 3: head of mortgage when you sold your property. So, yeah,
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  Speaker 3: I did it. Kind of wake to bet the more
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  Speaker 3: I'm excited because I'm helping somebody every day.
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  Speaker 2: Yeah, you prevent you're providing a new solution that they
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  Speaker 2: never heard of before.
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  Speaker 3: Yeah.
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  Speaker 2: For those like you said, they don't want to sell
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  Speaker 2: the property, don't They don't want to stay in real estate,
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  Speaker 2: but with their at ten thirty one exchange, they want
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  Speaker 2: to find another opportunity. That DST solves that. And I
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  Speaker 2: think there's probably as you've probably found. It's it's not
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  Speaker 2: like it's ubiquitous. Everybody knows what a DST is. You're
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  Speaker 2: probably constantly teaching people about how these work and like
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  Speaker 2: you say, solving problems for people.
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  Speaker 3: Right, Yeah, yeah, I mean shamus plug go to ww
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  Speaker 3: dot ten thirty one, dsdgroup dot com you learn a
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  Speaker 3: little bit more. Yeah, but yeah, it's a great strategy,
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  Speaker 3: totally passively, even for a state. Piling is great for gifting,
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  Speaker 3: it's great. I know you're the philanthropree guy. Yeah, so
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  Speaker 3: this could even be a great strategy for like a charity,
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  Speaker 3: because sometimes charities get handed the real estate. What do
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  Speaker 3: we do with it? Or you go through the trouble
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  Speaker 3: of selling it. Well, this is a great thing. You
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  Speaker 3: could just leave this to a charity if you want.
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  Speaker 3: Maybe you take the strategy, you take your income for
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  Speaker 3: a while, but the nice thing get some point just
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  Speaker 3: liquidate's kind of at some point and nobody has to
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  Speaker 3: do anything, and then the charity would just get the cash.
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  Speaker 3: You know.
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  Speaker 2: So would it liquidate in someone's lifetime or only liquidate
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  Speaker 2: out their passing or both either? Oh no, no, they're
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  Speaker 2: usually about a five or six year average hole. Okay,
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  Speaker 2: you're not sucking these things for life, all right?
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  Speaker 3: Of course you can keep ten thirty when it's shaving
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  Speaker 3: over as over and over as we say, swap tell
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  Speaker 3: you to drop, okay, But sometimes people their legacy is
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  Speaker 3: they want to leave things to a charity. So there's
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  Speaker 3: so many strategies. This is goodful.
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  Speaker 2: Yeah, so wow, that's great because I know that some
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  Speaker 2: people feel like they want to make their money first
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  Speaker 2: in a certain way and then later figure out what
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  Speaker 2: to do with it. Firstus like you say, making a
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  Speaker 2: donation of real estate, Maybe that's not for this person.
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  Speaker 2: They want to make more money doing what they're doing
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  Speaker 2: through the DST and then later decide how they want
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  Speaker 2: to But that's interesting. I didn't realize that the average
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  Speaker 2: lifespan was only about five or six years. Is that
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  Speaker 2: because they've made the money they need to make and
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  Speaker 2: they're ready to break and do they do another DST
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  Speaker 2: or how does that work?
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  Speaker 3: Exactly? Yeah, Typically when the property is sold that the
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  Speaker 3: deal he owns, they have to distribute the capital to
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  Speaker 3: the investors. But you are allowed to do another ten
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  Speaker 3: thirty one exchange. Now you don't have to do another DFC.
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  Speaker 3: You could go out and buy a car, washer and
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  Speaker 3: our peaks or whatever it is you want to own,
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  Speaker 3: or you take the cash and to pay the taxes. Okay,
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  Speaker 3: but the way the irs and the rules are and
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  Speaker 3: if they're dead on a deal, I know I'm getting
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  Speaker 3: in the weeds here. They typically tend to be more
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  Speaker 3: intermediate term offering, okay. And truly, the DST companies don't
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  Speaker 3: make a ton of money by sitting on the property.
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  Speaker 3: They want to buy it, operate it, raise it, and
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  Speaker 3: value and sell it, okay, because they're participating in the
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  Speaker 3: deal or they're getting some type of fee. So yeah,
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  Speaker 3: I think some people when they hear about these products,
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  Speaker 3: I'm stuck in it for twenty five years. That's not sure.
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  Speaker 3: In fact, there's even some hybrid products out there throughout
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  Speaker 3: seven twenty one up where you which is becoming a
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  Speaker 3: new cashphrase. Those are things that after like three years,
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  Speaker 3: they give you liquidity options. I don't personally think they're
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  Speaker 3: the best, and when I explain it to people don't
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  Speaker 3: understand why. But you're hearing this more out there, and
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  Speaker 3: the bigger firms are start try to do this. But
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  Speaker 3: it does get people liquidity options. And I won't get
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  Speaker 3: into any more about it, but yeah, that's good.
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  Speaker 2: I think what you're talking about is you're sensitive to
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  Speaker 2: the audience what they're looking for, and it sounds like
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  Speaker 2: people are more interested in short term options, like they
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  Speaker 2: made their money, they're ready to move on to something else,
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  Speaker 2: to try something else. But at least you're providing those
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  Speaker 2: solutions that tax benefits and alternative investments and things like
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  Speaker 2: that that they wouldn't normally have been familiar with.
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  Speaker 3: Right.
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  Speaker 2: And and it sounds like only Delaware offers it in
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  Speaker 2: this way, right, I mean, otherwise they'd have other statutory trusts. Right.
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  Speaker 3: Well, it's created under the laws of the state of Delaware, right,
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  Speaker 3: So it has nothing to do with Delaware. Other there's
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  Speaker 3: a trustee, some bank building somewhere, right, But you know,
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  Speaker 3: it's real estate all over the country, Okay, you know, but.
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  Speaker 2: They just have favorable tax laws, which is why it's
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  Speaker 2: the Delaware.
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  Speaker 3: Yeah. I mean, if you notice almost every New York
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  Speaker 3: stocker change company, right, it's headquartered in Delaware, right, right,
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  Speaker 3: actyn'tly call themselves a tax free state. Yeah, I mean, right,
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  Speaker 3: there's something like that. There's certain states in this country.
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  Speaker 3: They seem to get a lot of assets because their
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  Speaker 3: tax laws are very favorable, right. Yeah, So they just
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  Speaker 3: have a I don't know, a corporate structure that allowed
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  Speaker 3: this to be created, and the irs has actually approved this.
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  Speaker 3: This isn't just some idea I came up with. This
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  Speaker 3: is a legitimate you know IRS rule it. So no,
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  Speaker 3: that's right.
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  Speaker 2: And you're just you're just highlighting it and showing people
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  Speaker 2: that it's an option out there where otherwise they wouldn't
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  Speaker 2: necessarily know about it. That's great. Well, I know you
• 10:20
  Speaker 2: need to run. I appreciate you spending a little time
• 10:22
  Speaker 2: with us. So I know you already mentioned the website.
• 10:24
  Speaker 2: You can maybe mention it again and how people would
• 10:26
  Speaker 2: get in touch with you to learn more about the
• 10:29
  Speaker 2: DST and and how all these types of situations work.
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  Speaker 3: I'll just go and let my cell phone, okay eight
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  Speaker 3: zero one eight one five six six one nine again
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  Speaker 3: uh ten thirty one dstgroup dot com. I go to
• 10:45
  Speaker 3: the website. There is a contact us link get more information,
• 10:47
  Speaker 3: and it's got a lot of great articles, and I
• 10:50
  Speaker 3: will mention I do more than just the Delaware stats
• 10:52
  Speaker 3: for it. There's a lot of other stuff we could
• 10:54
  Speaker 3: do to help people with tax savings, a passive uh
• 10:57
  Speaker 3: you know, private program.
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  Speaker 2: So yeah, that's great.
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  Speaker 3: And your last name is D E W I T
• 11:02
  Speaker 3: T H capital W.
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  Speaker 2: Yeah, yeah, do it. And maybe the last thing maybe
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  Speaker 2: it's pretty mature when we gonna ask you anyway, do
• 11:08
  Speaker 2: you have a podcast that's coming out pretty soon yourself.
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  Speaker 3: We're working on creating one, ykay, all right, so I'll
• 11:13
  Speaker 3: have you on it, all right. I appreciate it. Yeah
• 11:15
  Speaker 3: you can.
• 11:16
  Speaker 2: We'll make sure that we let people know about it
• 11:18
  Speaker 2: when it comes out.
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  Speaker 3: So, and I'm looking forward to hopefully working with you
• 11:22
  Speaker 3: further on our firm so we can help our clients
• 11:25
  Speaker 3: do their charitable planning at getting. I'm a donor. I
• 11:27
  Speaker 3: love to donate. I'm a big supporter Safari Club International Foundation,
• 11:31
  Speaker 3: but I also will donate to the jd RF, the
• 11:34
  Speaker 3: Child Liberation Fund, and just randomly. Sometimes if I'm at
• 11:38
  Speaker 3: an event and something's going for auction to charity, I
• 11:41
  Speaker 3: see to be pulling out my check book. I don't
• 11:43
  Speaker 3: know why, you know, but.
• 11:45
  Speaker 2: I do hold it your heartstrings or maybe you just
• 11:47
  Speaker 2: you know it was the right moment in time for you. Yeah,
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  Speaker 2: I just figure sometimes people need it more than I do.
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  Speaker 2: I'm very blessed and fortunate in my life, so we
• 11:55
  Speaker 2: got to give back. Yeah, it's important. So I agree
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  Speaker 2: with you one hundred percent, and I appreciate your the
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  Speaker 2: way think in the way that you're moving into this
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  Speaker 2: space because a lot of people don't necessarily think that way.
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  Speaker 2: And so when you feel blessed and you want to
• 12:07
  Speaker 2: give back, I mean there's a lot of charities that
• 12:08
  Speaker 2: are willing to benefit from that, and anyway, appreciate your
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  Speaker 2: intentionality around it.
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  Speaker 3: So yeah, appreciate it.
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  Speaker 2: All right, Well, thanks, Ray, come back some other time
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  Speaker 2: and tell some more story about DSTs. All right, so good,
• 12:18
  Speaker 2: all right. Thanks.
• 12:24
  Speaker 1: That wraps up today's conversation with raid to Wit. His
• 12:27
  Speaker 1: approach reminds us that financial planning isn't just about growing wealth.
• 12:31
  Speaker 1: It's about creating freedom, flexibility, and the ability to give
• 12:36
  Speaker 1: back in meaningful ways. Here are three key takeaways from
• 12:39
  Speaker 1: our discussion. First, there's a growing opportunity in real estate transactions.
• 12:45
  Speaker 1: Baby boomers now own nearly half of America's real estate,
• 12:50
  Speaker 1: and many are looking for ways to retire without the
• 12:52
  Speaker 1: stress of quote, toilets and tenants and trash end quote. Second,
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  Speaker 1: Delaware statutory trust can turn active real estate ownership into
• 13:03
  Speaker 1: passive income, helping investors avoid capital gain taxes while maintaining
• 13:08
  Speaker 1: steady returns. And Third, strategies like DSTs don't just benefit individuals,
• 13:14
  Speaker 1: they can also become tools for charitable giving and legacy planning,
• 13:18
  Speaker 1: supporting causes long after the owner's lifetime. Thanks for listening
• 13:23
  Speaker 1: to Money to Give. If this conversation resonated with you,
• 13:26
  Speaker 1: please leave a review on your preferred streaming platform, share
• 13:30
  Speaker 1: it with a friend or colleague, and most importantly, keep
• 13:33
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• 13:37
  Speaker 1: seven countries and growing with nearly ten thousand downloads to date.
• 13:42
  Speaker 1: A reminder, this podcast is meant to be for educational
• 13:45
  Speaker 1: purposes only. For specific advice related to your own situation,
• 13:49
  Speaker 1: please consult an attorney, financial advisor CPA, or other type
• 13:54
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• 13:57
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