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Dissolution in the context of the Delaware statutory trust (DST) industry refers to the legal process by which a DST is terminated and its assets are distributed among the trust’s beneficiaries or other entities as stipulated in the trust agreement.

This process is generally initiated due to various reasons such as the conclusion of the trust’s defined purpose, by mutual agreement of all beneficiaries, failure to meet the obligations of the trust, bankruptcy, or through legal proceedings.

The specific steps of dissolution can vary based on the trust agreement, but it typically involves the following:

  1. Decision to dissolve the trust: This is often made by the trustees, in accordance with the terms of the trust agreement.
  2. Liquidation of assets: The trust’s assets may need to be sold off to settle any outstanding debts or liabilities.
  3. Distribution of remaining assets: After all debts and liabilities are settled, the remaining assets are distributed among the beneficiaries as specified in the trust agreement.
  4. Legal filings: The dissolution may need to be officially recorded with the appropriate state entities, such as the Delaware Secretary of State.

The exact process and the rights and responsibilities of the trustees and beneficiaries during dissolution will be outlined in the trust agreement. Given the complexity of this area of law, it is recommended to consult with an attorney or professional advisor familiar with DSTs during this process.