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James Dunigan
Watch Senior Wealth Planner for PNC Delaware Trust Company, Heather Flanagan's video commentary on strategies for wealth protection. more >
Heather Flanagan, PNC Delaware Trust Company
Delaware Trusts

At PNC, our clients' achievement is our success. We recognize that each individual's goals are unique and dynamic. We actively work to develop long-term, trusted relationships with our clients, as well as their professional advisors. Among PNC's exceptional and specialized resources is our capability to offer the benefits of Delaware Trusts through the PNC Delaware Trust Company.

PNC - Your Delaware Trust Advantage

PNC Delaware Trust Company provides highly customized fiduciary and custody services for trusts administered under particular provisions of Delaware law. PNC has a legacy in Delaware spanning over 150 years. Its knowledgeable and experienced team of professionals dedicated to Delaware Advantage Trusts, a stream-lined process, and extensive resources to assist clients and their attorneys, distinguish PNC from other providers.

The Delaware Advantage

Delaware offers individuals and businesses a unique climate for protecting and perpetuating wealth. It is distinguished for its tradition of favorable personal trust laws which help wealthy individuals preserve wealth for themselves and future generations. Delaware is recognized for it's progressive tax legislation emphasizing flexibility, tax savings, perpetual trusts, and asset protection.

Dynasty Trusts

Unlike most states, Delaware law permits multi-generational trusts to last in perpetuity. Delaware Dynasty Trusts are used to create a legacy for future generations, provide protection for beneficiaries, and, if properly structured, avoid federal transfer taxes for future generations. The flexibility available under Delaware law makes Delaware the jurisdiction of choice for Dynasty Trusts when, for example, the creator of the trust ("Settlor") wishes to retain control of investment decisions, restrict the trustee's duty to disclose trust information to beneficiaries for a period of time, prevent diversification of a concentrated stock position, or prevent the sale of stock in a family business. A Delaware Dynasty Trust may also be structured to eliminate state income tax on accumulated trust income, thereby maximizing the growth of assets for the benefit of future beneficiaries.

Asset Protection Trusts

In today's increasingly litigious society and uncertain economy, wealthy individuals are focused on preserving hard-earned assets for retirement and passing a legacy to heirs. Professionals, business owners, and others concerned about potential lawsuits are using Delaware Asset Protection Trusts to protect assets from future creditors. The creator of the trust ("Settlor") has the ability to receive distributions from the trust and can retain control over the investment of trust assets.

Direction Trusts

Delaware's Direction Statute adds significant flexibility to Delaware Trusts by permitting the Settlor to allocate distribution, investment, and administrative decisions among co-trustees, advisors, and/or trust protectors. The Settlor can appoint an Investment Advisor to be responsible for investment decisions and a Distribution Advisor, who has personal knowledge of beneficiaries' needs, to make distribution decisions. A Trust Protector may also be appointed with specific powers to address changing laws and circumstances.

Delaware's "Decanting" Statute

Sometimes the provisions of an irrevocable trust can become problematic or difficult to administer. Delaware offers great flexibility to amend irrevocable trusts to better fulfill the needs of beneficiaries and to address administrative issues. In addition to reformation by petition to the Chancery Court, Delaware law permits a trustee, in certain circumstances, to effectively amend a problematic trust without court costs by "decanting," or pouring over the assets of a trust to a new amended trust.

Delaware Tax-Advantaged ("DING") Trusts

The creation of a Delaware Tax-Advantaged Trust, sometimes called a "DING" Trust (Delaware Incomplete Gift Non Grantor Trust) can create a unique opportunity to minimize, or even eliminate, state income taxes. Delaware effectively does not impose any income tax on accumulated income or retained capital gains in a trust that does not have any Delaware resident beneficiaries. So, for example, in certain circumstances a business owner may be able to save state income tax on the capital gain realized upon the sale of his or her interest in a closely held business with the use of a Delaware Tax-Advantaged Trust.

Privacy

Delaware trusts are provided a degree of confidentiality and privacy. Court accountings are not required for many Delaware trusts, thus potentially eliminating a public record of the trust's existence and the value and nature of the trust's assets.

Moving Existing Trusts to Delaware

The advantages of Delaware law may be enjoyed not only by trusts that are initially created under Delaware law, but also by existing trusts created under the laws of another jurisdiction. In most circumstances, an existing trust can be moved to Delaware to better fulfill the Settlor's intent and the beneficiaries' interest. Existing trusts are moved to Delaware to:

  1. Minimize or eliminate state income tax;
  2. Appoint Investment Advisors, Distribution Advisors and/or Trust Protectors under Delaware's Direction Statute;
  3. Enable a trustee to amend a problematic irrevocable trust under Delaware's Decanting Statute;
  4. Extend the duration of a trust;
  5. Obtain more effective creditor protection for beneficiaries;
  6. Minimize fees and administrative costs.

 

Please consult with your attorney to determine if these services offered by PNC Delaware Trust Company could benefit you. PNC does not provide legal, tax or accounting advice. 

 

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