DELAWARE WILLS AND TRUSTS REQUIREMENTS
Statutory Authority.
Wills: Del. Code, Title 12, Part II: Wills (Del. Code, Tit. 12 ยงยง201, et. seq.).
Trusts: Del., Title 12, Chap. 35: Del. Trust Act (Del. Code, Tit. 12 ยงยง3501, et. seq.).
Delaware Will Requirements.
To create a valid will, a Delaware testator must be at least 18 years old and โof sound and disposing mind and memory.โ Delaware courts consider a testator to have adequate capacity if the testator knows that he or she is making a will disposing of property and has sufficient memory and comprehension to exercise thought, reflection, and judgment.ย
A Delaware will must be in writing and signed by the testatorโexcept that someone else can sign on the testatorโs behalf in the testatorโs presence and at the testatorโs direction. A Delaware will must also be attested by two or more credible witnesses, who must sign the will in the testatorโs presence.ย
Any person generally competent to be a witness may act as a witness to a Delaware will. Disinterested witnesses are generally preferable, but a Delaware will is not invalid just because it is signed by a witness who has an interest in the will.
Delaware wills need not be notarized but can be made โself-provedโ if the will is accompanied by a statutorily compliant affidavit executed by the testator and witnesses. The notarized affidavit states that the testator signed the will willingly and voluntarily, was under no constraint or undue influence, and was at least 18 and of sound mind and memory when signing.ย
A self-proved affidavit may be executed simultaneously with the will or later. When available, the affidavit serves in place of the witness testimony otherwise necessary to prove the will before the Register of Wills. Delawareโs legislature publishes a form self-proved affidavit within the Delaware Code, at Title 12, ยง1305.ย ย
Delaware law allows a testator to incorporate by reference a written statement or list of tangible personal property not specifically disposed by the will. Sometimes called a โpersonal property memorandum,โ the list must be in the testatorโs handwriting or signed by the testator and must identify the items and intended recipients with reasonable certainty. A testator may prepare a personal property memorandum before or after execution of a will and can alter the list after its initial preparation. Personal property memorandaโwhich must not be inconsistent with the terms of the will itselfโcannot be used for real estate, money, notes, bonds, certificates of title, securities, or property used in trade or business.
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Amendment, Revision, and Revocation of Delaware Wills.
A Delaware testator may amend an existing will by executing a new will that complies with all formalities required for creation of an original will.ย A testator may also amend a will by executing a codicil (an addendum to a will) that meets all Delaware will requirements.
A Delaware will may be revoked by โcancelingโโwhich generally means physical destruction of the document by the testator or another person in the testatorโs presence acting at the testatorโs direction. Delaware wills may also be revoked by execution of a later willโor another document that meets all formalities required for a willโthat expressly revokes the earlier will. A later will that does not expressly revoke a prior will may revoke the earlier will, in whole or in part, by inconsistency to the extent the two instruments include conflicting provisions.
If a testator is divorced after executing a Delaware will, any provisions in favor of the former spouse are considered revoked unless the will expressly provides otherwise. Provisions voided by divorce are treated as though the former spouse predeceased the testator.
If a testator gets married after executing a Delaware will, the surviving spouse receives a share in the estate as if the testator died intestate (i.e., died with no will)โunless the testator provided for the surviving spouse within the will or by other means.
If a child is born to a testator after execution of a Delaware will, the after-born child inherits the same share of the estate the child would have inherited had the testator died intestate. An after-born childโs share is inapplicable if the will provides for the after-born child specifically or as part of a class or if the will expressly states that a subsequent childโs birth does not affect the will.ย
Holographic and Oral Wills.
Delaware does not recognize handwritten (or โholographicโ) wills. A Delaware will written entirely in the testatorโs handwriting is valid only if it complies with all requirements for Delaware wills.
Oral (or โnuncupativeโ) wills are not valid in Delaware.
Delaware Trust Requirements.
Delawareโs statutory provisions governing trusts are codified within Title 12, Chapter 35 of the Delaware Code. Delaware has not adopted the Uniform Trust Code approach used by the majority of states. Instead, the rules governing Delaware trusts are primarily derived from common law and Delawareโs relatively complex statutes. Delawareโs trust statutes include default rules but allow significant latitude to override default rules through express provisions in a trust instrument.
Delaware trustsโlike trusts in other statesโhave three parties: a settlor who funds the trust (Delaware uses the synonym โtrustorโ), a trustee, and at least one beneficiary. The trustor creates the trust by transferring control of property to the trustee. The trustee holds legal title to trust property and manages the property for the benefit of beneficiaries under the terms of the trust. A beneficiary is a person designated to enjoy the benefits of trust property without holding legal title. Delaware allows for overlap between a trustโs parties, so one person can beโfor exampleโboth trustor and beneficiary.ย
A trusteeโs authority to manage trust assets includes the power to invest, sell, exchange, and lease trust property under the terms of the trust. Trustees are considered fiduciaries and must administer trust assets in good faith and avoid self-dealing. Delaware trustees cannot be liable for breach of trust if the trustee acts in reliance with the terms of a trust instrument.
Delaware trusts can be inter vivos (i.e., made during the trustorโs life) or testamentary (i.e., effective upon the trustorโs death). Trusts are either revocable or irrevocable. The trustor of a revocable trust retains the right to modify or terminate the trust. The trustor of an irrevocable trust surrenders the right to modify or revoke the trust. Irrevocable trusts give the trustor less long-term control but sometimes offer tax, asset-protection, and other estate-planning advantages revocable trusts do not provide.
Creation and modification of Delaware revocable inter vivos trusts (usually just called โliving trustsโ) used in estate planning are principally governed by Del. Code Tit. 12, ยง3545. Creation of a living trust in which a beneficiaryโs interest is contingent on surviving the trustorโand any revocation or modification thereofโmust be evidenced by a written trust instrument executed by the trustor. A trust instrument evidencing a Delaware living trust may be executed electronically under the Uniform Electronic Transaction Act included within Chapter 12A of Title 6 of the Delaware Code.
A Delaware living trustโs trust instrument must be witnessed in writing by at least one disinterested person or two credible personsโwho must witness the trust while in the trustorโs presence. A Delaware living trust may alternatively be evidenced by a written trust instrument executed by a trustee who qualifies as a disinterested person. A โdisinterested personโ is someone with no beneficial interest that would increase or decrease as a result of the creation, modification, or revocation of the trust.ย
A Delaware revocable living trust may reference a written statement or list of tangible personal property not specifically disposed by the trust instrument. The list must be in the trustorโs handwriting or signed by the trustor and must identify the items and intended recipients with reasonable certainty. The list must not be inconsistent with the trust instrument.ย
A trustor may prepare a list of tangible personal property before or after executing the trust instrument and can alter the list after its initial preparation. A personal property list can only be used for distributions occurring after the trustorโs death and cannot be used for real estate, money, notes, bonds, certificates of title, securities, or property used in trade or business.
Delawareโs laws regarding โspendthrift trustsโ provide greater protections against creditors than most other states. A beneficiaryโs creditors cannot attach a beneficiaryโs interest in the trust until distributed to the beneficiary unless attachment is expressly allowed under the terms of the trust instrument or Delaware lawโsuch as if the beneficiary has a power of appointment over trust assets or could revoke the trust and take possession of the assets. A trustee can make direct payments of trust assets on the beneficiaryโs behalf without risk of attachment by creditors. Creditors of a spendthrift trustโs trustor who is also a beneficiary may only attach the trustorโs beneficial interest in the trust to the extent the interest is attributable to the trustorโs contribution to the trust.ย
Delaware is among the states with the most powerful laws authorizing Domestic Asset Protection Trusts (DAPTs)โa form of spendthrift trust that provides exceptionally strong protections against creditors. Assets held in a Delaware DAPT are nearly immune from attachment to satisfy most types of debtsโexcluding alimony, child-support, and tort damages.ย
Delaware DAPTs can be โself-settled,โ which means the trustor can also be a beneficiary of the trust. A Delaware DAPT must be irrevocable, but the trustor can retain certain rights in the trustโincluding the right to receive distributions from the trust, veto distributions, and appoint a new trusteeโwithout invalidating the trust.
Delaware DAPTs must meet precise standards defined in the authorizing statute. A Delaware DAPT must haveโamong other thingsโa trustee resident in Delaware, a trust instrument expressly incorporating Delaware law, and a standard for distributions that does not give the trustor an unfettered right to trust principal.ย
Delaware law recognizes a variety of specialized trustsโincluding charitable trusts and trusts for the care of animals. The Delaware Statutory Trust Act authorizes specialized business trusts which can be useful in corporate financial transactions. Delaware statutory trusts are intended for use in a commercial setting and are not ordinarily associated with individual estate plans.
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Estate Taxes: Delaware does not impose a state-level estate tax. The Delaware Legislature eliminated the stateโs inheritance tax after 1999. Large Delaware estates may still be liable for federal estate taxes.
Simplified Probate:ย Delaware provides a streamlined probate process for eligible small estates. Qualifying estates must include personal property valued at no more than $30,000 and no Delaware real estate. When the small estates process is available, an interested person (such as the surviving spouse or other close relative, a trustee, an executor named in the decedentโs will, or a funeral director) executes a sworn affidavit setting forth the statutorily required information. Upon approval, the interested person can then take possession and distribute estate assets without formal probate. Small estate affidavit forms and information are available from county Register of Willsโ offices.
Non-Probate Transfers:ย In addition to living trusts, Delaware law offers multiple other options for transfer of assets outside probate.ย Assets co-owned as joint tenants with a right of survivorship automatically transfer to a surviving owner upon the other ownerโs death. Delaware also recognizes tenancy by the entireties, another joint ownership form that includes a right of survivorship. Tenancy by the entirety can be used for both real and personal property in Delaware but can only be used for co-ownership by two spouses.ย ย
POD (payable-on-death) and TOD (transfer-on-death) designationsโwhich provide for automatic transfer to a beneficiary upon an ownerโs deathโmay also be used in Delaware.ย POD designations can be added to financial accounts and CDs. TOD designations can be used with registered securities, brokerage accounts, and some other similar assets.ย ย
Transfer-on-Death (TOD) Deeds and Titles:ย Delaware does not recognize TOD designations on real estate deeds but is among the states that authorize TOD designations on vehicle titles.ย If the owner of a Delaware registered vehicle adds a TOD designation to the vehicleโs title, ownership passes to the named beneficiary automatically upon the original ownerโs death.ย
Spousal Shares: To protect against spousal disinheritance by will, Delaware law grants a surviving spouse the right to an elective share in one-third of the decedent spouseโs
โelective estateโโreduced for the decedentโs other transfers to the surviving spouse. Spousal elective shares can be waived through valid pre- or post-nuptial agreements.
A deceased spouseโs โelective estateโ is equal to the gross estate for federal estate tax purposesโmodified for specified deductions and a one-half interest in property jointly owned by the spouses as joint tenants or tenants by the entirety. Delaware applies the federal gross-estate standard even if the estate does not qualify for estate tax. The estateโs personal representative must file a federal estate tax return if the surviving spouse files an elective-share petition.
A surviving spouseโs share when a deceased spouse is intestate depends on the deceased spouseโs other surviving close relatives. The surviving spouse receives the entire estate if the deceased spouse has no surviving children or parents. If the deceased spouse is survived by other close relatives, the surviving spouseโs share is
- $50,000, plus ยฝ of the balance of personal property and a life estate in the decedentโs real estate if there is a surviving parent but no surviving children;
- $50,000, plus ยฝ of the balance of personal property and a life estate in the decedentโs real estate if the deceased spouse leaves surviving children who are all also children of the surviving spouse;
- One-half of the deceased spouseโs personal property and a life estate in the decedentโs real estate if the deceased spouse has at least one child who is not the surviving spouseโs child.
Creating a will or trust does not have to be difficult or intimidating.ย However, certain circumstancesโlike second marriages, stepchildren, aging parents, special needs beneficiaries, guardianships, and business interests (to name a few)โcan add a layer of complexity and result in unforeseen long-term consequences.ย Whenever any out-of-the-ordinary issues are present, itโs a good idea to consult with an experienced attorney familiar with and licensed under the laws of the relevant jurisdiction.
