Some question Delaware as the state of choice for an asset protection trust following a court decision in 2014, according to Kiplinger in "Delaware Trust? You May Want to Consider Nevada Instead."
Dynasty trusts have long been the goal of people who want to keep assets in the family with a primary reason of protecting the money from ex-spouses. For a long time, the preferred way of accomplishing this, was to create a Delaware dynasty trust. It was believed that Delaware offered the best asset protection.
The case is truly only remarkable because the decision came as a surprise.
The facts themselves are simple.
A man created a Delaware dynasty trust for the benefit of his son, his son's spouse and his grandchildren. Over the years, the trust assets grew to hundreds of millions of dollars. The son and his wife got divorced.
The court ruled that the now ex-spouse was entitled to a portion of the dynasty trust, so the assets were not kept in the family as desired.
This decision has caused many to look for other states in which to create trusts that better preserve assets in the family. Nevada is the most popular choice to date.
Reference: Kiplinger (March 2017) "Delaware Trust? You May Want to Consider Nevada Instead."