It's a Matter of Trust

I just read with great interest Bob Clark’s article “The Trust Threat” in the January 2007 Investment Advisor magazine. His premise that directed trusts can be an important tool for independent investment advisors to retain their clients is very relevant and important.

As most readers may or may not be aware, Delaware trust law provides the opportunity for a “direction investment advisor” to direct investment decisions, leaving the trustee to administer the other important matters concerning the trust beneficiaries. In a Delaware direction trust, the trustee does not have investment oversight responsibility, though the trust does benefit from all of Delaware’s other favorable tax laws. These include:

• Exemption from state income tax on accumulated earnings and capital gains if there are no remainder beneficiaries who are Delaware residents;
• Permission of perpetual “dynasty” trusts;
• Use of Total Return Unitrusts;
• Spendthrift statutes;
• Asset protection;
• Confidentiality protection since trust court filings are not required;
• A Court of Chancery with over 250 years of legal precedent in trust and corporate law.

Wilmington Trust is the leading provider of directed trust services in Delaware. We have partnered with several major investment firms, as well as independent financial advisors throughout the country. In addition, we have tremendous depth of fiduciary expertise that will ensure that new trusts are taking full advantage of Delaware’s favorable trust laws or help with the process to change an existing trust to a Delaware trust.

Please let me know if I can be of any assistance to you or your contacts to provide Delaware direction trust services.

James J. Palermo

Private Client Advisor

Wilmington Trust

Wilmington, Delaware