Hong Kong
Singapore
BVI
Jersey
Delaware directed trust: key features and rules
A Delaware directed trust is a trust whose deed lets named advisers direct, consent to or veto the trustee's decisions, under 12 Del. C. 3313. Below are the governing law, who may act as trustee, and the features and limits, each with its source; take them to your lawyer before the deed is drafted.
Reviewed by a senior trust administrator, updated
The legal frame at a glance
What the law provides, with the source number for each item.
Key facts
- Perpetuity period
- No limit on personal property in trust; real property after 110 years[3]
- Asset protection rule
- A creditor must prove its case by clear and convincing evidence[1]
- Foreign law rules
- Forced heirship, legitime and elective share claims are not exception claims[1]
- Trustee requirement
- Qualified trustee: a Delaware-resident individual or a supervised entity[1]
Numbers in brackets point to the Sources list at the end of this page.
Swipe sideways to see the whole diagram.
- SettlorSets up the structure and transfers assets into it
- transfers assetsTrusteeHolds the assets and manages them under the trust deed
- holds and distributesBeneficiariesPeople who benefit from the trust under its terms
- Investment adviser gives investment directionsInvestment adviserGives investment directions that the trustee follows
- Trustee holds legal titleTrust assetsThe property held in the structure
Roles and notes
| Part of the structure | What it does |
|---|---|
| Settlor | Sets up the structure and transfers assets into it |
| Trustee | Holds the assets and manages them under the trust deed |
| Investment adviser | Gives investment directions that the trustee follows |
| Beneficiaries | People who benefit from the trust under its terms |
| Trust assets | The property held in the structure |
- The deed names an investment adviser or protector who directs, consents to or vetoes the trustee's decisions.
- The trustee holds legal title and carries out a valid direction; it is liable only for wilful misconduct when it follows one.
- For a qualified disposition, at least one trustee must be a qualified trustee in Delaware.
- The adviser can be a protector with power to remove and appoint trustees.
- We coordinate the client side and the reporting; your Delaware lawyer confirms the wording of each power.
The governing law
Delaware trust law has three layers that matter here. The Qualified Dispositions in Trust Act sets the rules for transfers aimed at creditor protection.
Title 12, chapter 33 sets the rules for advisers and fiduciaries. Title 25, chapter 5 sets the rule on how long a trust may last.
The Act is codified at 12 Del. C. 3570 to 3576 and applies to dispositions made on or after 1 July 1997 (source: Delaware Code: Title 12, chapter 35, subchapter VI).
A trust instrument qualifies only if it expressly chooses Delaware law and is irrevocable.
It is not treated as revocable because the transferor keeps certain powers, such as a veto on distributions or the right to remove and appoint trustees (same source).
The tax and reporting page explains what the trustee files.
Who may act as trustee
A qualified disposition needs at least one qualified trustee.
An individual qualifies if resident in Delaware and not the transferor.
Any other trustee qualifies if Delaware law authorises it to act and the Bank Commissioner, the FDIC or the Comptroller of the Currency supervises it (same source).
The qualified trustee must also keep some trust property in custody in the state, keep records, prepare the fiduciary income tax returns, or otherwise take a real part in running the trust.
Other trustees can sit beside it. The Act says a transfer to several trustees is still qualified if at least one is a qualified trustee.
Delaware also has a chapter of state trust company law with subchapters on limited purpose trust companies and family trust companies (source: Delaware Code: Title 5, chapter 7).
A family planning its own trust company asks its Delaware lawyer which rules apply before forming one.
Features the law allows
The directed model is the feature families ask about most.
A deed can give one or more persons authority to direct, consent to or disapprove the trustee’s investment or distribution decisions. Those persons are advisers, and a protector counts as one (source: Delaware Code: Title 12, chapter 33).
Advisers are fiduciaries when they use that authority, unless the deed says they act in a non-fiduciary capacity.
- Trustee protection. A trustee that follows an adviser’s direction is not liable for the resulting loss, except for its own wilful misconduct (same source).
- Settlor powers. The transferor can keep a veto on distributions and a power to remove trustees without making the instrument revocable.
- No fixed end date for personal property. No interest in personal property held in trust is void under any rule against perpetuities (source: Delaware Code: Title 25, chapter 5).
- Dynasty use. The same rule is why families use a trust of this kind for assets they want held across generations.
Each feature is a tool, not a result. Whether it works for your family depends on your residence, your assets and the law of the places where they sit.
Limits and requirements
The same Act sets limits. A Delaware asset protection trust is not a shield against every claim, and the asset protection benefits of Delaware trusts depend on following the statute.
The Act names two groups of exception creditors.
They are people owed support or alimony, or a division of property on divorce, and people who suffered death, injury or property damage on or before the date of the transfer (same source as the Act).
Support claims do not extend to forced heirship, legitime or elective share claims.
A creditor must prove its case by clear and convincing evidence. A claim that arises after the transfer is extinguished unless the creditor sues within 4 years of the transfer.
Real property in trust must be distributed after 110 years from the later of when it was added and when the trust became irrevocable, with exceptions (same source as the time-limit rule).
The Act limits the adviser roles the transferor can hold in a qualified disposition; your lawyer confirms the role before it goes into the deed.
Sources and review dates
Every fact above comes from the Delaware Code Online, accessed on 2026-11-05. Your lawyer confirms how it applies to your deed.
We review the facts on this page when the law changes. The overview of Delaware trusts puts them in context, and the cost guide explains who charges for the work.
If you plan a long-term structure with advisers, see our wealth structuring service and then ask for a quote.
Frequently asked questions
Which law governs a trust in Delaware?
The trust instrument chooses the law. For a qualified disposition it must name Delaware law, and the Qualified Dispositions in Trust Act then applies. Other Delaware statutes, such as the adviser rules in Title 12, chapter 33, apply alongside it.
Who may act as trustee in Delaware?
Any trustee the deed names, but a qualified disposition needs at least one qualified trustee: a Delaware-resident individual who is not the transferor, or an entity that Delaware law lets act as trustee and a supervisor oversees. Your Delaware lawyer confirms who fits your deed.
Can a trust in Delaware have a protector?
Yes. The statute treats a protector as a kind of adviser, with the powers the deed gives, which can include removing and appointing trustees. The deed can say whether the protector acts as a fiduciary. Your lawyer sets the wording.
Sources
- Delaware Code: Title 12, chapter 35, subchapter VI, Qualified Dispositions in Trust, read 2026-11-05.
- Delaware Code: Title 12, chapter 33, Administrative Provisions, read 2026-11-05.
- Delaware Code: Title 25, chapter 5, Rule Against Perpetuities, read 2026-11-05.
- Delaware Code: Title 5, chapter 7, Corporation Law for State Banks and Trust Companies, read 2026-11-05.