Comprehensive guide to Delaware's trust statutes for dynasty planning.
Compare Delaware against other top jurisdictions based on your specific planning goals.
Start Comparison →Delaware abolished the Rule Against Perpetuities for interests in trust property effective July 1, 1995. Trusts can continue indefinitely with no durational limit, making Delaware one of the premier dynasty trust jurisdictions.
Delaware does not tax trust income if: (1) all current beneficiaries are non-Delaware residents, (2) there is no Delaware-source income, and (3) trustee location alone does not create tax nexus. Delaware statutory trustees/directed trustees do not create income tax liability by themselves.
Delaware's DAPT statute requires creditors to prove fraudulent transfer by 'clear and convincing evidence' - a higher standard than typical civil cases. The 4-year statute of limitations (or 1 year from discovery, whichever is later) provides strong protection after seasoning.
Delaware is widely recognized as having the most sophisticated directed trust statute in the nation. The statute allows complete separation of administrative, investment, and distribution functions with explicit liability protection. Trust protectors can be granted broad powers and are not fiduciaries unless the trust instrument provides otherwise.
Delaware's decanting statute is one of the most permissive in the nation. Trustees with discretionary distribution authority can decant to new trusts with modified terms, extend trust duration (perpetual in Delaware), and change situs. No court approval required.
The deepest case law and most sophisticated trust bar in the country. If you need complex trust structures or expect litigation, Delaware's Court of Chancery is unmatched.
State income tax applies unless ALL beneficiaries are out-of-state. The tax trap catches more people than you'd think. Also, trust companies here cater to the ultra-wealthy.
Delaware is overrated for most people. The case law advantage only matters if you expect to be in court. For a straightforward dynasty trust, it's unnecessary complexity.