Delaware Trust Strategies

The Delaware law creates many new opportunities for creating a variety of asset protection plans specifically tailored to individual circumstances and objectives. Here is a sample of some of the planning options.

One simple technique is to transfer the family nest-egg to the Trust. The clients can serve as co-trustees with a Delaware trust company. Accounts can be maintained at the current financial institutions with the name changed from the client to the name of the trust. Some minimal amount can be deposited with an institution in Delaware in order to comply with the statute. This strategy is convenient and easy to maintain. The trust can be designed so that all of the income of the trust is taxed on the settlor’s personal return. The trust can carry out the settlor’s estate plan, avoiding probate and minimizing estate taxes.

The second strategy involves the formation of a Family Limited Partnership to hold family assets. Husband and Wife can be the general partners and the limited partnership interests would be held by the Delaware Trust. This structure allows the client to maintain management and control of the assets while protecting the limited partnership interests from potential charging order or foreclosure. An excellent level of asset protection can be accomplished without diminishing the client’s level of control over the property.

The most sophisticated approach could utilize an offshore Asset Protection Trust as a beneficiary of the Delaware Trust. The client and family members would be the beneficiaries together with the offshore trust. The ultimate advantage of this approach is that the offshore trust provides a convenient safety-valve-to transfer assets to the offshore jurisdiction if the need arises. The client is removed from any dangers associated with a complete reliance on the U.S. court system.


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