Why is Everyone Talking About Delaware Trusts?

Delaware is a trust friendly state. For more than a century, Delaware has assisted wealthy families in accomplishing objectives such as teaching younger generations about the responsible stewardship of wealth and philanthropy while simultaneously maximizing the investment return on family assets, protecting family wealth from creditors and saving income taxes. See, R. Nenno, Perpetual Dynasty Trusts: Tax Planning and Jurisdiction Selection, ALI-ABA Planning Techniques for Large Estates, 509-651 (Apr. 2007), available at www.ali-aba.org.

It is for these reasons and the reasons set forth in this outline that almost every major institutional trustee is either based in Delaware or has opened an office to provide trust services there. It is also for these reasons that many wealthy families have established their own trust companies (limited purpose trust companies) in Delaware. A list of institutional trust companies and limited purpose trust companies may be found at www.banking.delaware.gov. It should be obvious to the reader that nearly all national institutional trustees are open in Delaware for trust business.

However, it is not the purpose of this outline to deliver a sales pitch for Delaware trust business. Rather, it is the purpose of this outline to explain why so many institutional trustees and family offices have moved trust operations to Delaware and why so many trust attorneys are working with their wealthy clients to change the situs of existing trusts to Delaware. The explanation may lead many to work on trust legislation in their own states. The explanation will also demonstrate that it is not necessary for wealthy trustors to abandon their relationships with local advisers and trust attorneys to avail themselves of the many advantages of Delaware Trust law.

So, why is everyone talking about Delaware trusts?

Author(s)

Mike Gordon
Director
Gordon, Fournaris & Mammarella, P.A.
Peter S. Gordon, J.D., LL.M.
Director
Gordon, Fournaris & Mammarella, P.A.