How Aging Investors and Families Are Using Exchange Strategies Differently
After more than twenty years of working with older adults and multigenerational families as a Certified Senior Advisor, I’ve learned that real estate decisions are rarely just financial. They are deeply personal. They’re tied to health, family relationships, identity, independence, and legacy.
While 1031 exchanges have long been used as a smart tax-deferral strategy for real estate investors, I’m seeing a meaningful shift in how they’re being approached later in life. For many aging investors and families, the question is no longer just “How do we defer capital gains?” but “How does this decision support the next chapter of life and the people we care about?”
From Growth to Simplicity
Earlier in an investor’s life, growth and acquisition often drive decision-making. More doors, more upside, more leverage. But as investors move into their 60s, 70s, and beyond, priorities often change.
Many of the families I work with are caring for aging parents, managing health changes, or thinking about how assets will eventually transfer to the next generation. In those moments, complexity becomes a liability.
I increasingly see 1031 exchanges used as a way to simplify, not exit, real estate portfolios. Long-held properties that once felt manageable may now feel heavy: deferred maintenance, tenant calls, travel demands, or management stress. A properly planned exchange can allow investors to step away from active management while still preserving income and deferring taxes.
This shift often brings a noticeable sense of relief, not just financially, but emotionally.
Why DSTs Are Part of the Conversation
Delaware Statutory Trusts (DSTs) come up frequently in conversations with older investors, especially those who want to remain invested in real estate without the day-to-day responsibility.
While DSTs aren’t right for everyone and require careful evaluation, they can offer aging investors a way to transition into more passive ownership while maintaining predictable income. For some families, DSTs also help ease concerns about what happens when an investor is no longer able, or they aren’t interested in managing properties.
From a legacy standpoint, fractional ownership can be easier for heirs to understand and manage, especially when adult children live out of state or have careers outside of real estate. Again, the appeal isn’t just financial, it’s about reducing future stress for loved ones.
Risk Feels Different Later in Life
One thing I’ve learned working with seniors is that risk tolerance changes and that’s not a weakness, it’s wisdom.
Timing pressures associated with 1031 exchanges can feel very different when an investor is approaching retirement, dealing with health concerns, or supporting a spouse or parent. The margin for recovery isn’t what it once was, and the emotional weight of a misstep feels heavier.
As a result, many aging investors prioritize:
- Stability over aggressive appreciation
- Income consistency over growth speculation
- Diversification that supports peace of mind
When exchange planning happens early before a triggering event like a sudden sale or illness, families tend to make more thoughtful, aligned decisions. Education and preparation are key.
Integrating 1031 Planning With Estate and Family Goals
Another trend I’m seeing is deeper coordination between 1031 strategies and estate planning conversations. Families want clarity not just about taxes today, but about how assets will be handled tomorrow.
A 1031 exchange doesn’t exist in a vacuum. When thoughtfully aligned with trusts, wills, and family discussions, it can support smoother transitions and reduce confusion for heirs. Many families are relieved to learn that proactive planning now can prevent difficult decisions later.
What’s often missing isn’t intelligence, it’s shared understanding. When adult children are included in educational conversations early, they feel more prepared and less overwhelmed when responsibility eventually shifts.
The Human Side of Multigenerational Decisions
One of the most overlooked aspects of 1031 exchange planning is family dynamics. I’ve sat at many kitchen tables where siblings had very different visions for the same asset. Some want to hold real estate forever. Others want liquidity. Some feel confident; others feel anxious.
These differences don’t disappear just because the numbers make sense.
In many cases, a 1031 exchange becomes a catalyst for meaningful family conversations about values, responsibility, and legacy. When families are educated together, without pressure or sales, decisions tend to feel more grounded and respectful.
Education Builds Confidence
Across all of these situations, education is the common thread. Not technical overload — but clear, calm, non-promotional education that helps families understand their options and implications.
Older investors and caregivers are often navigating a lot at once. When they feel informed rather than rushed, decisions feel empowering rather than reactive.
A Broader Way to Think About 1031 Exchanges
What I’m seeing today is a broader, more human use of 1031 exchanges, one that respects both financial strategy and life stage.
For aging investors and families, a well-planned exchange can support:
- Simpler living
- Reduced stress
- Income continuity
- Family clarity
- Long-term legacy goals
As our population ages and more families navigate real estate transitions together, 1031 exchanges will continue to play an important role, not just as a tax tool, but as part of thoughtful life and legacy planning.
Erin DiCarlo is a Certified Senior Advisor, Care Manager Certified, Senior and Specialty Move Manger, and Seniors Real Estate Specialist with more than 20 years of experience working alongside older adults, families, and the professionals who support them during times of transition. Her work sits at the intersection of aging, real estate, family dynamics, and life planning, with a focus on helping individuals navigate complex decisions with clarity and compassion.
In addition to her work directly with seniors and caregivers, Erin trains and mentors real estate agents across the country on how to provide informed, ethical, and aligned services to the older adult market. Her approach emphasizes education, risk awareness, collaboration with trusted advisors, and a deep understanding of the emotional and practical realities families face as they plan for later life, downsizing, legacy, and wealth transfer.
Erin’s perspective is shaped by decades of hands-on experience supporting aging clients through housing transitions, estate considerations, and multigenerational decision-making, bringing a human-centered lens to real estate strategy and long-term planning.
