Over years of compounding, this favorable tax treatment can amount to significant sums. Accountings, and their expense, are either not required or easily waived. Trustees need not notify future beneficiaries of their interest in a Delaware trust. Just the fact that Delaware is another state, whether across the country or a neighbor, tends to keep clients' personal affairs out of their local limelight. Wealthy people are increasingly concerned with protecting their wealth, and reasonably so.
Trusts provide protection from creditors, especially the creditors of beneficiaries.
How much protection depends on the state. Delaware is one of the best. Rigorous enforcement of spendthrift provisions means creditors of beneficiaries can't get to assets in trust. Delaware also has a unique statute that prevents a creditor from attaching assets in a trust without spendthrift protection when the trustee is a bank or trust company. For further information and the legal background on these issues, please see the memos on our White Papers page.