Trusts in Delaware represent a legal arrangement which allows parties to manage assets on behalf of another party. This trust becomes a legal entity, having its own responsibilities and rights. In this article, our specialized company formation agents in Delaware will offer specific guidelines and details regarding living trusts, asset protection trusts, directed trusts, irrevocable trusts and more.
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Trust categories in Delaware
As Delaware is considered one of the most favorable American states for setting up a trust, due to tax advantages, legal protection and trust laws, find below the most common trust categories that can be created in Delaware:
- living trust (revocable trust);
- irrevocable trust;
- statutory trust;
- directed trust;
- asset protection trust;
- dynasty trust;
- charity trust.
Find professional assistance from our company formation agents in order to choose the type of trust in Delaware that suits your needs and to successfully set up a company in the USA.
Living trust in Delaware
Living trusts in Delaware are established during the lifetime of the grantor who places assets in this type of trust. Usually, the grantor is named the initial trustee and has control over the assets during his/her lifetime. A successor trustee is also named and has the responsibility to take over the management of the assets after the death of the trust founder. Main benefits of the living trust in Delaware are:
- control over the assets during the grantor’s lifetime;
- private distribution of assets (without the need of court filings);
- long-term planning, such as scheduling distribution to children or grandchildren;
- increased security.
Furthermore, this type of trust offers the option to set up a Delaware revocable living trust, having the main benefit to revoke the trust during the lifetime of the grantor, providing flexibility of its users.
If you plan to set up a living trust in Delaware, our specialized company formation agents are at your disposal for any proceedings.
Asset protection trust in Delaware
The Delaware Asset Protection Trust (DAPT) represents a tool that helps investors to protect some of their wealth from future creditors. The law in this state mentions that assets placed in the Delaware asset protection trust become protected after a four-year period from the date of the first transfer. However, this type of protection does not apply for:
- child or spousal support;
- state tax obligations;
- personal injury claims.
The Delaware asset protection trust represents a more complex type of trust and we advise to benefit from the support of our company formation agents in Delaware before setting it up.
Delaware directed trust
A directed trust in Delaware works as a type of structure where the responsibilities are divided among different parties, such as: the directed trustee for administrative tasks and the trust advisor who is responsible for investment management (financial advisors, attorneys in Delaware, etc.). The main benefits of the Delaware directed trust include:
- tax efficiencies;
- strong legal protection;
- full access to the Delaware Court of Chancery (equity court that resolves trust and business matters);
- progressive trust laws.
Revocable vs. irrevocable trusts in Delaware
Delaware revocable and irrevocable trusts have distinct legal and financial purposes, the main difference being represented by the roles of the grantor in each structure.
In the revocable trust in Delaware, the grantor owns the role of both trustee and beneficiary, during his/her lifetime. In this case, as the assets are held in the name of the trust and not the individual, probate is avoided and the grantor still has legal ownership.
In the case of the Delaware irrevocable trust, the grantor transfers the ownership of assets and does not serve as a trustee. This separation is made for achieving asset protection and eligibility for benefits. Depending on specific terms, the grantor may or may be not named as a beneficiary of the trust during his/her lifetime.
For more information about setting up a Delaware trust and choosing the most suitable option for your needs, find support from our specialized company formation agents who can also help with opening a company in the USA.
Delaware statutory trust market
The Delaware statutory trust market demonstrated strong growth in 2024, as official data presents:
- Delaware statutory trust raised 5.66 billion US dollars;
- Industrial and multifamily assets were the most popular ones, with 29% and 28% of offerings.
Furthermore, for assistance regarding a wide range of business matters in Delaware, our company formation agents are specialized for diverse needs in the field. For example, our professionals can offer support in opening an LLC company in Delaware or setting up a branch in the USA. Other than that, we are specialized in any proceedings regarding opening a company in Delaware and all across the USA.
For more information on opening a Delaware trust, do not hesitate to contactour specialists.