Advantages of
Delaware Trusts

Why are Delaware trusts favored by many wealthy families?

The State of Delaware has established itself as a favorable jurisdiction for personal trusts — for both residents and nonresidents alike — due to its contemporary laws, income tax advantages and investment flexibility. In this new report, our experts from The Northern Trust Company of Delaware provide analysis on the unique advantages of Delaware trusts.

Topics discussed include:

Wealth Enhancement. Many states limit the duration of a trust, but Delaware does not place time limits on properly structured perpetual trusts — so assets transferred into the trust can potentially benefit multiple generations without incurring gift, estate or generation-skipping transfer taxes.

State Income Tax Savings. If there are no Delaware beneficiaries, Delaware does not impose state income tax on income accumulated in, and capital gains realized by, an irrevocable trust.

Confidentiality. For a variety of reasons, grantors may prefer not to disclose the existence of a trust to beneficiaries. Under Delaware law, this is permissible for a period of time, as long as it is provided in the terms of the trust instrument.

Investment Flexibility. Delaware was the first state to have a “directed trust” statute, allowing a trustee to be directed by a party named in the trust instrument on investments, distributions, tax compliance and other matters.

Protect and Preserve Wealth for Generations

Delaware continues to be a leading jurisdiction for personal trusts, largely due to its flexible laws, deep infrastructure for the trust and estates industry, sophisticated legal bar and judicial system, and a progressive and amenable legislative process. In this new report, our Delaware trust experts highlight the most significant legal and tax benefits, with actionable insights and strategies for protecting and preserving wealth for generations.