continuing, the Delaware Trust Act of 2024

Additionally, the Act revises the use of letters of wishes, a tool through which the settlor can communicate non-binding guidance to trustees about the trust’s administration. Under the new legislation, trustees have greater discretion to interpret or disregard letters of wishes if they conflict with the trust’s governing provisions, thereby avoiding ambiguity in trust interpretation. This allows estate planners and their clients to utilize letters of wishes as a means to express nuanced, situational intentions—such as prioritizing specific beneficiaries’ needs without legally binding the trustee. This enhancement provides flexibility while maintaining settlor confidentiality, as trustees are not obligated to disclose these letters to beneficiaries unless specified by the trust document.

Furthermore, the Act extends virtual representation to designated representatives of beneficiaries, broadening the scope of representation for minors, incapacitated individuals, and future beneficiaries in non-judicial matters. This update can simplify trust administration by allowing designated representatives to represent beneficiaries who may not have the capacity to participate in trust decisions, providing more streamlined management for estate planners handling multigenerational trusts.

Lastly, the Act introduces more clearly defined guidelines under the Uniform Transfer on Death Security Registration Act, aiding in smoother asset transfers upon the settlor’s death. By aligning Delaware’s laws with national standards, this change reduces ambiguities that estate planners and beneficiaries often face during the inheritance process.

In summary, the Delaware Trust Act of 2024 enhances the versatility and responsiveness of trusts to individual family needs, offering estate planning professionals a robust framework to tailor estate plans. From improved educational provisions for beneficiaries to clearer interpretative guidelines for trustees, the Act marks a progressive step in trust administration that can lead to more empowered and engaged beneficiaries. This makes Delaware an increasingly attractive jurisdiction for estate planning professionals and clients who seek innovative, client-centered solutions in managing generational wealth.

For estate planners, these new provisions can provide a unique competitive edge, allowing them to offer clients trust structures that not only safeguard assets but also foster financial literacy, legacy education, and responsible stewardship among beneficiaries. And, the concepts of this Act can also be integrated into estate planning that is done outside of Delaware Trusts.

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Rod Zeeb is the CEO & Founder of The Heritage Institute and Founder and Principal in Genacy Group.
Lori Coonen is CLO at The Heritage Institute and a Principal in Genacy Group. You may contact them @ www.theheritageinstitute.com or www.genacygroup.com.

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