Ten Reasons to Select the “Delaware Advantage” for Trusts
In establishing new trusts or transferring existing trusts to a more favorable jurisdiction, clients should consider the many advantages of Delaware law. Delaware has long been recognized as the preeminent jurisdiction for the formation and maintenance of trusts. Its advantages include:
Delaware’s “Direction Trust” law authorizes bifurcation of investment, distribution, and other responsibilities between a Delaware resident trustee and outside advisors.
Income Tax Advantages
There is no Delaware income tax on retained earnings on Delaware irrevocable trusts, provided certain conditions are met.
Total Return Trusts/Power to Adjust
Delaware law gives trustees flexibility in re‑characterizing income and principal to best serve clients’ short- and long-term needs.
Asset Protection Trusts
Delaware authorizes irrevocable trusts that, when structured correctly, should be protected from the settlor’s creditors, but from which the settlor may still derive benefit.
Delaware was one of the first states to abolish the common-law rule against perpetuities, thereby allowing trusts to continue into perpetuity.
The Delaware Court of Chancery
This specialized equity court handles all corporate and fiduciary matters. The “Chancellors,” appointed by the Governor of the State of Delaware, are generally prompt in their decisions and held in high regard for their sophistication.
The Delaware Legislature is very receptive and responsive to initiatives set forward by the fiduciary community. Delaware is often on the “cutting edge” nationally in enacting trust legislation in a bipartisan fashion.
Delaware law is sensitive to a client’s desire for privacy and contractual flexibility in trust matters.
United States Jurisdiction
As one of the 50 states, there are numerous advantages to Delaware being a U.S., rather than an off-shore, jurisdiction. Delaware is also conveniently located near several major markets, including New York City, Philadelphia, and Washington, D.C.
A Full Suite of Advantages
Other jurisdictions may offer some of the specific advantages listed above, but none has the full suite of advantages collectively known as the “Delaware Advantage.”
While each matter is unique, your experience with Bryn Mawr Trust is consistent.
We provide independent, objective, reliable, and expert trust solutions and services.