The tiny state of Delaware may claim the distinction of being “The First State,” but it has also been long known as a jurisdiction of choice for grantors of trusts. For generations, Delaware has:
- Built a trust-friendly body of legislation
- Supported its laws with a knowledgeable and effective court structure, which has a developed system of case law
One of the most notable benefits of Delaware trust law relates to the issue of state income tax. While most states impose a state income tax in addition to the federal income tax on trust income, trusts established in Delaware are not subject to Delaware state income tax if the beneficiaries are not Delaware residents. This could be an especially attractive benefit for those living in a state that imposes an income tax on trust income, particularly if they anticipate a large taxable transaction involving trust assets, such as the sale of a business or a concentrated asset position with a low basis.
In the Q3 edition of The Advisor, we take a closer look at this benefit of Delaware trust law, as well as what Atlantic Trust can offer through the Atlantic Trust Company of Delaware.
Your advisor can also work with your attorneys and tax advisors to determine the best trust solution to further your family’s financial and legacy goals.
Mark Gudaitis is a senior relationship manager in Atlantic Trust’s Boston office, with more than 27 years of industry experience. In this role, he helps high net worth families achieve their wealth management objectives and works closely with the client service team to build new client relationships.