A Delaware Trust offers the least governmental interference and the highest degree of confidentiality of all states.
Compared to other states, Delaware goes to great lengths to protect the confidentiality of a trust. For example, if you’re like most people, you want to make sure certain aspects of your trust do not become a matter of public record, such as the size, assets, and terms of your trust, as well as the names and addresses of your beneficiaries.
Unfortunately, in some states, individuals do not have that choice.1 That’s because many states require individuals to record trust agreements with the local government, as they would a deed to real estate.2 Delaware does not require individuals to record trust agreements.
Some states also require trustees to render periodic court accountings of their trust.3 Again, all exhibits, such as the trust document and asset inventory, become a matter of public record. Delaware does not require trustees to render periodic court accountings.
States that don’t require these accountings provide strong incentives to trustees to file them. In many states other than Delaware, a trustee that files an account is relieved from liability for investment losses and other acts it discloses upon its approval by the court.
As a result, to avoid open-ended liability, trustees of long-term trusts in other states may file an accounting at certain times, for example, upon the death of a life beneficiary. Delaware has no routine procedure for a trustee to exonerate itself from liability, and thus no incentive to go public.
Trustees in Delaware account to the beneficiaries of their trusts just like trustees in other states, and the beneficiaries can bring suit or request a judicial accounting if dissatisfied. In Delaware, however, the courts are not involved in the routine administration of a trust.
- Those states which have adopted Art. VII of the Uniform Probate Code require trustees to register their trusts with the appropriate court.
- See, for example, Miss. Code 1972, §91-9-1; 60 Okla.St.Ann. §172.
- See Conn. G.S.A. 45A-177; N.H. Rev., Stats. Am. 564;19; Ohio R.C. §2109.30.