Delaware

Why Delaware. Delaware is the second domestic reference jurisdiction in this Part, alongside Wyoming (see supra ch. 26). Its claim to that position rests on three things. The first is a trust code that the General Assembly revises almost every year, usually on the recommendation of the Delaware bar, and that gives maximum effect to the principle of freedom of disposition. The second is the Qualified Dispositions in Trust Act, enacted in 1997 as one of the first two American domestic asset protection trust statutes. The third is the Court of Chancery, a court of equity without juries, staffed by judges who decide trust and entity disputes as a large part of their docket and who write reasoned opinions in most of them. That third advantage now carries a qualification. Since 2024 several of the court's decisions in corporate cases have been reversed by the Delaware Supreme Court or answered by the General Assembly, and some companies have moved their place of incorporation to other states, so that the predictability of the forum is a matter the planner should assess in its own right (see infra ¶ 2740.08). Around those three sits a deep professional industry of trust companies, administrative trustees, investment advisers and counsel, and an entity law that the rest of the country treats as its default.

Domestic jurisdiction, domestic limits. Delaware shares every structural limit described for Wyoming (see supra ¶ 2601.02). Its law is subject to the Full Faith and Credit Clause, to the Supremacy Clause and federal bankruptcy law, including 11 U.S.C. § 548(e), and to the conflict-of-laws analysis that a court in another state may apply to a Delaware trust created by that state's resident (see supra ¶¶ 1840–1850). Delaware's own courts have said as much. The Court of Chancery has stated that the exclusive-jurisdiction clause of the Qualified Dispositions in Trust Act allocates jurisdiction among Delaware courts and makes no claim against courts elsewhere (see infra ¶ 2740.03). Delaware protection is therefore strongest where the creditor must come to Delaware, and weakest where the creditor can obtain relief from a court that will not apply Delaware law and can reach the settlor or the assets.

What distinguishes Delaware from Wyoming. Delaware and Wyoming are often presented as interchangeable. They are not interchangeable in five respects, each of which matters in practice.

1. Exception creditors. Delaware's Act preserves claims for alimony, support and divorce property division by a spouse married to the settlor at or before the transfer, and for death, personal injury or property damage occurring on or before the transfer. 12 Del. C. § 3573(a). Wyoming's qualified spendthrift trust statute has a narrower list (see supra ¶ 2630).
2. Limitation periods. Delaware gives creditors whose claims arose before the transfer four years, or one year after discovery, and gives later creditors four years without any discovery extension. Id. § 3572(b). Wyoming allows the settlor to shorten the period by notice (see supra ¶ 2630.02). Delaware has no equivalent procedure.
3. Burden. Delaware puts on the creditor the burden of proving the elements of its claim by clear and convincing evidence. Id. § 3572(b).
4. Fraudulent transfer law. Delaware's general statute remains the Uniform Fraudulent Transfer Act, with no Uniform Voidable Transactions Act choice-of-law rule (see infra ¶ 2710.08).
5. Tax. Delaware taxes resident trusts but allows a deduction for income accumulated for nonresident beneficiaries (see infra ¶ 2770). Wyoming has no income tax.

Scope of the chapter. This chapter examines the foundations of Delaware trust law (see infra ¶ 2710), the requirements of the qualified disposition (see infra ¶ 2720) and the rules that govern creditors' claims against it (see infra ¶ 2730), litigation, conflict of laws and bankruptcy (see infra ¶ 2740), directed trusts and governance (see infra ¶ 2750), Delaware entities (see infra ¶ 2760), tax (see infra ¶ 2770) and the position of nonresidents and migrating trusts (see infra ¶ 2780). It closes with Delaware in the Threat Matrix (see infra ¶ 2790).

Sources. The statutory provisions described here were read on the official Delaware Code published by the Delaware Legislative Council, current through the legislation of 2026. Session-law references are taken from the history notes in that code. The Delaware opinions discussed were read in full text; decisions for which no reporter citation could be confirmed are cited by docket number and date. Reported decisions applying the Qualified Dispositions in Trust Act remain few, and the Court of Chancery itself noted in 2015 that "little case law interpreting the QDTA exists." TrustCo Bank v. Mathews, C.A. No. 8374-VCP (Del. Ch. Jan. 22, 2015).