In most cases, Rule 501 of Regulation D views irrevocable trusts with assets in excess of $5MM as accreted investors. This is not the same for irrevocable trusts with $5MM or less in assets. The definition of an accredited investor under Rule 501 of Reg. D covers a wide range of circumstances and situations. In the case of those irrevocable trusts with insufficient assets, the trustees may face obstacles before the trust may enjoy the benefits of financially savvy alternative equity investments opportunities. Often, it is these type of smart investments that provide the greatest financial and tax benefit for the trust. This is problematic and unfair for trusts that have less than $5MM in assets. This is a common and unexpected problem in generational wealth planning involving the sale of real estate investment properties. Those trusts may be unable to enter into 1031 Exchange DST investments that can help the trust to avoid the burden of capital gains taxes on the sale of such real estate assets.

Alternative equity investment opportunities routinely prohibit non-accredited investors from participating in investment offers. This is considered best practices by promotors of those investment opportunities to ensure projects stay safely within the the safe harbors of SEC Rule 501 of Regulation D. This means trustees of Irrevocable trusts with $5MM or less in total assets may not be in a position to select the most financial advantageous mix of investments to benefit the trust. All trustees have the fiduciary responsibility to select the best investment path to benefit the trust's beneficiaries. Many trustees are unaware of how to solve this accredited investor obstacle. And, those who know about the simple solution, may not have the experience, knowhow, or relationships to plan and implement the solution in a timely and efficient manner. SLF can advise and guide those trustees to a implement a simple and effective Rule 501 compliant solution that will to open the path to permit those trustees to invest trust assets into alternative equity investment opportunities.

If a trustee of sells real estate investment property valued at $10MM, which is equally owned by three irrevocable trusts (i.e., approx. $3.3MM of the asset value is allocated to each trust), the trustee is blocked from taking advantage of a 1031 Exchange "Delaware Statutory Trust" capital gains tax savings since each trust does not have more than $5MM in assets. The trustee will need to purchase real property to benefit from a 1031 Exchange. If, however, the trustee believes investing the trust assets in a "DST" 1031 Exchange is the best investment strategy for the trusts, the trustee will need to find a way to qualify each trust as an accredited investor. SLF solves this problem for most trusts based on its unique relationships in the banking and financial industry. SLF assists irrevocable trusts to comply with accredited investor requirements for DST 1031 Exchanges. SLF can do the same for other types of alternative equity investment opportunities. SLF helps trustees to take advantage of unique strategies to maximize trust assets and to avoid capital gains taxes on the sales of trust assets.