DelawareSB 327153rd General Assembly (2024–2026)Senate

AN ACT TO AMEND TITLE 5 AND TITLE 12 OF THE DELAWARE CODE RELATING TO FAMILY TRUST COMPANIES.

Sponsored By: Spiros Mantzavinos (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

9 provisions identified: 2 benefits, 2 costs, 5 mixed.

Family trust records gain privacy protections

Applications, personal and financial records, examination documents, and other private family trust information are confidential. Authorized staff and agencies with jurisdiction can receive records; other disclosures require a finding that public interest outweighs privacy. Public-interest disclosures generally require at least 10 days' written notice, unless law or a court order bars notice. A requested hearing delays disclosure until a ruling, unless law or a court order requires otherwise. Recipients must sign confidentiality agreements, and disclosure to the public or competitors is barred; compelled law-enforcement disclosures remain available.

Trust companies gain new conversion paths

Foreign family trust companies and limited purpose trust companies can convert to Delaware family trust companies. Delaware family trust companies can also convert to limited purpose trust companies. Applicants must follow applicable conversion laws, submit approved plans and governing documents, and show they meet the destination company's requirements. Approval is automatic if the Commissioner takes no action within 30 days after receiving a complete application. Companies converting into Delaware family trust companies keep their listed trust appointments, rights, and interests.

Family trust companies must carry insurance

Every family trust company must maintain a bond covering director, officer, and employee dishonesty of at least $1 million. Companies subject to the law's minimum capital rules must also maintain general liability and errors and omissions insurance. That coverage must be at least $5 million per occurrence and can be purchased by the company or an affiliate. The law sets coverage amounts, not insurance premiums or household payments.

Family trust companies pay license fees

Family trust companies pay an initial license fee of $5,000 to $25,000 before they can begin business. Later annual fees are also $5,000 to $25,000, due by January 30. No separate annual fee is due in the year the initial fee was paid. Outside the initial allowance, designated-relative additions or changes cost a nonrefundable $1,000 per newly designated person, paid with the annual fee or when designated. Other formation fees apply, except for the specified fee for a corporation's certificate to begin business.

Family trustees get fee filing relief

Family trust companies do not have to file trustee pay schedules or formulas with the Register in Chancery. If they do not file, they also avoid the related requirement to provide a schedule to specified trust parties. The related rule for calculating pay from a filed schedule does not apply to those companies either. Reasonable trustee pay remains allowed when the trust document does not set pay, unless it requires service without pay.

Families gain a limited trust company option

Delaware corporations and limited liability companies can become family trust companies, with one designated relative defining the eligible family group. They can serve qualifying relatives, family entities, trusts, estates, and charities, but cannot serve or seek business from the public. Organizers need state authority and generally at least three people, with an exception for limited liability companies. These companies can use “trust” in their names and generally follow other state trust-company laws, including their protections. The act takes effect immediately; implementation begins when final regulations are announced or one year after enactment, whichever comes first.

Family trust capital requirements have safeguards

Family trust companies must hold $250,000 in capital stock and at least $125,000 in paid-in surplus. Requirements above $375,000 need findings that operations would otherwise be unsafe or that family members need protection. Requirements above $1 million need extraordinary circumstances; additional-capital orders must explain the reasons and payment timetable. Required capital must use cash, readily marketable securities, or other liquid, secure assets; qualifying government obligations and insured deposits must mature within three years after purchase. Liquid owner equity must stay in Delaware financial institutions, and assets pledged as trust collateral generally do not count.

Family trust offices face operating limits

Family trust companies must keep one physical Delaware office, accessible records, a qualified trust officer, and needed staff or services. They can open offices outside Delaware, including abroad, subject to the state's outside-office rules and capital exceptions. Their powers are limited to trust services and related work, and they cannot advertise to the public. State approval is required to add powers or merge, except with another family trust company, an entity becoming one, or a family-member entity when the company survives. The Commissioner can add reasonable requirements to protect trust beneficiaries.

Family trust oversight balances fees and burdens

The State Bank Commissioner can examine family trust companies on-site or review records sent from the company. Companies pay the examination fee set under existing banking law for each authorized examination. Rules and examination standards must reflect family-company risks, and examinations must limit burdens when reasonable and justified. The Commissioner must order companies to stop violations, excess powers, or business with non-family clients and set a compliance date. Failure to comply allows further enforcement under state banking law.

Sponsors & Cosponsors

Sponsor

Spiros Mantzavinos
Democratic • Senate

Cosponsors

William Bush
Democratic • House
William J. Carson
Democratic • House
Kerri Evelyn Harris
Democratic • House
Brian Pettyjohn
Republican • Senate
Jeffrey N. Spiegelman
Republican • House

Roll Call Votes

All Roll Calls

Yes: 61 • No: 0

House vote • 6/18/2026

Passed (3/4 required)

Yes: 41 • No: 0

Senate vote • 6/9/2026

Passed (2/3 required)

Yes: 20 • No: 0

Actions Timeline

Signed by Governor
7/13/2026Governor
Passed By House. Votes: 41 YES
6/18/2026House
Reported Out of Committee (Economic Development/Banking/Insurance & Commerce) in House with 8 On Its Merits
6/16/2026House
Assigned to Economic Development/Banking/Insurance & Commerce Committee in House
6/10/2026House
Passed By Senate. Votes: 20 YES 1 ABSENT
6/9/2026Senate
Reported Out of Committee (Banking, Business, Insurance & Technology) in Senate with 1 Favorable, 6 On Its Merits
5/20/2026Senate
Introduced and Assigned to Banking, Business, Insurance & Technology Committee in Senate
5/19/2026Senate

Bill Text

Current
5/19/2026
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