Delaware Trust Conference: Pioneering Trust Laws and Impact on Economy

Why Delaware: The First State v. Other States The Delaware Trust Conference Wednesday, Oct 23, 2019, 3:30-4:30 Todd Flubacher Jeff Wolken Wilmington Trust, N.A. Morris, Nichols, Arsht & Tunnell LLP National Director of Fiduciary Strategies Partner

Delaware: The First State (for Trust Innovation) Delaware: The First State (for Trust Innovation) It was the first state to pioneer many innovative trust laws: 1. Delaware created the directed trust early in the twentieth century 2. Delaware pioneered the perpetual trust through the use of limited powers of appointment to extend the perpetuities period at each generation 3. Delaware enacted the prudent investor rule in 1986, several years before the 1994 promulgation of the Uniform Prudent Investor Act (UPIA) 4. In 2001, Delaware became the first state to enact a total return unitrust- conversion statute 5. Delaware s Supreme Court and its Court of Chancery have rendered many of the country s early trust decisions and a number of key trust decisions in more recent years 6. In 2016, Delaware adopted the lowest premium tax rate in the United States 0% for large private-placement life-insurance policies

Our Universe

Our Universe Delaware

Impact of Trust Industry on Impact of Trust Industry on Delaware s Economy Delaware s Economy 1. Conservative estimate trusts contribute $300 million in fiduciary fees annually 2. 10-20 times trust assets and fiduciary fees expected for a state of comparable size 3. Conservative estimate of 2-3.5x multiplier to calculate contribution to Delaware s economy 4. Delaware s trust industry has grown substantially in the past two decades

Ranking the States Ranking the States Separating Fact From Fiction Separating Fact From Fiction

Home State Competition for Trusts Home State Competition for Trusts Proliferation of Uniform Acts 1. Uniform Trust Code 2. Uniform Directed Trust Act 3. Uniform Prudent Investor Act 4. Uniform Trust Decanting Act

Home State Competition for Trusts Home State Competition for Trusts Proliferation of Domestic Asset Protection Trusts 1) 17 States allow self-settled spendthrift trusts 2) Delaware pioneered DAPTs along with Alaska in 1997 3) DING Trusts and state income tax minimization

Choosing the Right State: Choosing the Right State: The Case For Delaware s Trust The Case For Delaware s Trust Infrastructure Infrastructure

Trust Companies Licensed to Do Business in South Dakota as of Oct. 1, 2019 Name Name Name A&D Private Family Trust Company, LLC Acorn Trust Company Adler Trust Company AdvisorTrust, Inc. Alta Trust Company Amicorp Trustees (South Dakota), LLC Anchorage Trust Company Anthos Trust Company South Dakota, LLC Argonne Trust Company, Inc. Bankers Trust Company of South Dakota Biltmore Trust Company BitGo Trust Company, Inc. Blue Lake Trust Company Bluebird Trust Company LLC Boulder Bridge Trust Company Bridgeford Trust Company, LLC Bridges Trust Company of South Dakota BTC Trust Company of South Dakota Butterfly Trust Company Capital First Trust Company, Inc. Carlson Family Trust Company, LLC Causeway Trust Company CISA Trust Company (South Dakota), LLC Citicorp Trust South Dakota Concord Trust Company, LLC Condor Trust Company Cornerstone Private Asset Trust Company, LLC Corundum Trust Company, Inc Dillon Trust Company LLC Dorsey & Whitney Trust Company LLC Dorsey Trust International Inc. Ellis Ring Family Trust Company, LLC Equiom Trust (South Dakota), LLC Equity Trust Company Expedition Trust Company First Covenant Trust and Advisors, LLC First Trust Company, LLC FNN Trust Company, LLC Forthright Trust Corporation Gallardo Trust Company General Trust Company Generations Trust Company Gore Creek Trust Company LLC Great Plains Trust Company of South Dakota GWLRA US Trust Company LLC Hamilton Trust Company of South Dakota LLC Hampshire Trust LLC Hermes Trust Company, LLC HRK Trust Company IJ Trust Company, LLC Independent Trust Company of America, LLC International Chemical Overseas Trust Company IRA Financial Trust Company IRA Services Trust Company IRAR Trust Company JHN Trust Company JTC TRUSTEES (USA) LTD KENDRIS TRUSTEES (USA) LLC Kinnimaka Trust Company Lavender Trust Company Inc. LBJ Trust (S.D.) Inc. Liberty Trust Company, Ltd. Life Insurance Trust Company Lion Trust Corporation Longview Trust Company LLC Madison Trust Company, Inc. Mariner Trust Company, LLC Marlow Trust Company USA Maroon Private Trust Company, LLC Meristem Trust Company, LLC Mid Atlantic Trust Company Midland Trust Company National Advisors Trust of South Dakota, Inc. New Vision Trust Company Next Generation Trust Company North Point Trust Company, LLC NuView Trust Company Old Hickory Trust Company LLC Old Mission Trust Company, LLC PAi Trust Company, Inc. PandoTree Trust Company, LLC PenChecks Trust Company of America Pheasant Paradise Trust Company, LLC Pilot Grove Private Trust Company Prudence Trust Company Roaring Fork Trust Company, Inc. Sageworth Trust Company of South Dakota, LLC Saint Joseph Trust Company, LLC Sawmill Trust Company South Dakota Trust Company LLC Standard Trust, LLC Sterling Trustees LLC Summer Street Trust Company, LLC SVA Trust Company, LLC The Kingdom Trust Company Tilia Trust Company LLC Travers Trust Company LLC Trident Trust Company (South Dakota) Inc. UDQ Private Trust Company, LLC UMB Trust Company of South Dakota Way Trust Wealth Advisors Trust Company Wrigley Private Trust Company Source: Division of Banking, South Dakota Department of Labor and Regulation

Moving and Modifying Trusts Moving and Modifying Trusts Goal: Modernize Trust or Minimize State Taxes 1) Decanting 2) Merger 3) NJSA 4) Court Petition 5) Appointment of Successor Fiduciaries

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