Death and Disability Repurchase Rules: 35 Non-Traded Funds (2026)

Three different things called a death exception

Read the plans and the same phrase, “death or qualifying disability”, does three jobs. Which one a fund uses decides whether an heir waits months or gets paid next month.

None of this is a right. SREIT’s plan says the board “may” waive its deduction and the filings repeat that boards can amend, suspend or end a plan. Starwood did amend its plan on April 29, 2026, the same day it cut distributions, and the death clause is what survived (our reading of 424B3 supplement no. 2 of April 29, 2026, accession 0001193125-26-192182).

Group 1: death requests go first

Group 2: a waiver, but the same line

Group 3: programs that exist for death

For the Lightstone REITs see also our Lightstone REITs page, which reads the same 10-Ks for NAV and distributions.

Group 4: no term, and the interval fund

Two vehicles gave us nothing to cite for an heir. FS Credit Real Estate Income Trust’s June 3, 2026 prospectus (0001104659-26-069936) prorates every request and offers a transfer-on-death designation instead; Blue Owl Credit Income Corp’s 10-K (0001812554-26-000011) has no death or disability repurchase term, only a risk-factor mention of key people at portfolio companies. RREEF and FS Credit both let an investor place a TOD designation on the shares, which the prospectus says transfers the shares to the named beneficiary on death (see our transfer on death deed guide for the real estate version).

Interval funds. The one interval fund we found with a death term is JPMorgan Credit Markets Fund (N-2/A, 0001193125-26-027395, January 28, 2026), which says no contingent deferred sales charge is imposed on redemptions “made due to the death or disability of a shareholder”, with a one-year window for disability. That is a fee waiver, not a place in line. The rule itself explains why: 17 CFR 270.23c-3 sets the repurchase offer between 5% and 25% of shares, caps a repurchase fee at 2% of proceeds, and the only carve-outs from pro rata acceptance are holders of fewer than 100 shares tendering everything and all-or-none lots. Issuer tender offers under 17 CFR 240.13e-4(f)(3) carry the same odd-lot exception. Antares’ notice, which does promise priority in a tender offer, is a fund’s own term and not something the rule text provides (our reading). More on the mechanics in our pages on interval funds and tender offer funds.

Starwood REIT: the one where the death clause is the exit

SREIT’s plan is the case that makes this page matter. After the April 29, 2026 amendment “no repurchase requests will be accepted” except death or qualifying disability of a natural-person holder and accounts under $5,000. The amounts it said it accepted, all of the requests in those categories:

August’s $5.1 million is above the $5 million limit because the two categories each have their own $5 million limit (our reading of the April 29 text). The prospectus says an estate can claim the early-repurchase waiver by written notice “from the estate of the stockholder, the recipient of the shares through bequest or inheritance, or, in the case of a revocable grantor trust, the trustee”, within 12 months, with a certified copy of the death certificate; shares held in an IRA count. Class S, Class T, Class D and Class I transaction prices for November 2, 2026 are $19.34, $19.34, $18.92 and $19.16 (supplement no. 9, October 16, 2026). For the history of Starwood’s limits see our SREIT redemptions history and the advisor repurchases page.

Worked example (our arithmetic)

A decedent bought 10,000 Class I shares of a NAV REIT at $25.00 for $250,000. On the date of death the shares are worth $19.16 each, the SREIT Class I price above, so $191,600.

• Basis: the heir’s basis is the fair market value at death, $191,600 (26 U.S.C. 1014(a)(1)). If the shares are repurchased at that price, taxable gain is $0 and the $58,400 of unrealized loss disappears; the step-up here is a step-down. What “fair market value” means for a share with no market is a question for the executor and the tax adviser, and the filings do not say.
• Fee: within the first year a plan with a 5% deduction would take $9,580 (5% of $191,600). A death waiver removes it; the waiver is discretionary.
• Holding period: a sale within a year of death is treated as long-term (section 1223(9)); our step-up in basis page covers the rest of the rules.
• In a queue with no priority: at Cantor, where Q2 2026 requests exceeded the limits, the same $191,600 request is filled only for the fraction that proration allows, and the unfilled part must be resubmitted (our reading of its 10-Q).

Inherited IRA: the step-up does not apply

If the shares sit in the decedent’s IRA there is no step-up: section 1014(c) says the section “shall not apply to property which constitutes a right to receive an item of income in respect of a decedent”, and pre-tax IRA balances are generally treated that way (our reading of section 691). The funds say the waiver reaches shares held through an IRA, so the request goes through the beneficiary’s inherited IRA custodian. Then the distribution clock starts: under 26 CFR 1.401(a)(9)-3(c)(3) the entire interest must be out by the end of the calendar year that includes the tenth anniversary of death, and where the owner died after distributions began, annual required distributions continue (26 CFR 1.401(a)(9)-5(d)(1)). The missed-RMD tax is 25% of the shortfall (section 4974(a)). An illiquid share that cannot be repurchased in time can be distributed in kind, which is taxable at its value. The full mechanics, including the December 31 value rule, are in our RMD page for illiquid IRA assets.

Verdict: redeem now, wait, or retitle

• The fund is meeting every request (13 of the vehicles said so for the first half of 2026): the clause matters less. Retitle or redeem as the estate needs, but still send the notice inside the window to keep the fee waiver.
• The fund is rationing and has priority (SREIT now; JPMREIT, BREIT, Brookfield, ARIS and North Haven if limits bind): file the written notice and death certificate early; the priority list is ordered by date of death above the monthly limit.
• The fund is rationing and has no priority (Cantor in Q2 2026): the clause saves the fee, not the wait; compare with a secondary sale or holding, which an adviser can price.
• Retitling: several plans require the shares to be owned by the holder of record “or his or her estate, heir or beneficiary”. The text does not say retitling must come first, so do not let retitling run past 12 months from death (our reading).

What a reader can do with this

• Find the plan. Search the fund’s latest prospectus or 10-Q for “death” and read the repurchase section; the accession numbers in our tables go straight to the filings.
• Count the days. The clock runs from the date of death. Put 12 months (or one year, or 360 days) on a calendar now.
• Gather the paper. Certified death certificate, letters testamentary or the trustee’s certification, the account statement and the custodian’s form if the shares are in an IRA. See probate for real estate for the estate side.
• Ask for the status. Ask the transfer agent whether the last three months of requests were met in full.
• Do not decide on the tax alone. Get the date-of-death value in writing.

This is analysis of public documents, not investment, legal or tax advice.

FAQ

Sources, read and saved on October 20, 2026: the latest prospectuses (424B3, POS AM, S-11), annual and quarterly reports (10-K, 10-Q), tender-offer filings (SC TO-I/A) and registration amendments (N-2/A) of Starwood Real Estate Income Trust, J.P. Morgan Real Estate Income Trust, Blackstone Real Estate Income Trust, Cantor Fitzgerald Income Trust, Nuveen Global Cities REIT, Nuveen Farmland REIT, Ares Real Estate Income Trust, Ares Industrial REIT, Blue Owl Real Estate Net Lease Trust, Cohen & Steers Income Opportunities REIT, EQT Exeter REIT, Cottonwood Communities, Apollo Realty Income Solutions, North Haven Net REIT, Invesco Real Estate Income Trust, Brookfield REIT, JLL Income Property Trust, Hines Global Income Trust, Fortress Net Lease REIT, Fortress Credit Realty Income Trust, FS Credit Real Estate Income Trust, Strategic Storage Trust VI, Fundrise eREIT, RREEF Property Trust, Procaccianti Hotel REIT, Lightstone Value Plus REIT I, II and III, NexPoint Capital, Barings Private Credit Corp, Ares Strategic Income Fund, Antares Strategic Credit Fund, KKR FS Income Trust, Blue Owl Credit Income Corp and JPMorgan Credit Markets Fund, all from SEC EDGAR with accession numbers in the CSV; 17 CFR 270.23c-3 and 240.13e-4 (eCFR, October 1, 2026 version); 26 U.S.C. 72, 401, 691, 1014, 1223 and 4974; 26 CFR 1.401(a)(9)-3, 1.401(a)(9)-5 and 1.408-8.