Delaware Trust Act 2025 Legislative Update

On August 21, 2025, Delaware Governor Matthew S. Meyer signed House Bill 103 (“Trust Act 2025”) into law. The legislation includes the following highlights:

• Numerous updates to Title 12 of the Delaware Code relating to noncharitable purpose trusts, including, for example: (a) a new defined term, “enforcer”, to describe the person that may be appointed to enforce the trust’s purpose; (b) including enforcers in the definitions of “fiduciary” under 12 Del. C. § 3301(d), “trustee” under 12 Del. C. § 3580, and “officeholder” under 12 Del. C. § 3326, thus drawing the enforcer role into the application of numerous statutes applicable to other fiduciaries, trustees and officeholders; (c) clarifying that a person is not a beneficiary of a purpose trust by virtue of receiving disbursements in furtherance of the stated purpose of the trust; (d) providing that unless the governing instrument provides otherwise, an enforcer will serve as a fiduciary by default; (e) stating that a person that accepts an appointment as enforcer submits to personal jurisdiction in Delaware; and (f) if there is no identifiable beneficiary of the purpose trust but there is an enforcer, then a purpose trust may enter into a non-judicial settlement agreement (“NJSA”) or consent modification agreement and the enforcer will act as an interested person or a necessary party in such circumstances.
• Amendment to 12 Del. C. § 3326, which grants a statutory power to resign for officeholders such as trustees, advisers, designated representatives, and enforcers, providing that a consent modification agreement may be used to effectuate the resignation of an officeholder, or if none of the other options under Section 3326 are available, a NJSA may be used.
• Amendment to 12 Del. C. § 3315 to expressly provide that a beneficiary of a discretionary interest cannot compel a distribution from the trust.
• Amendment to the definition of marital property in 13 Del. C. § 1513 to provide that a donee spouse’s interest in a trust created by the donor spouse is not marital property unless the trust’s governing instrument provides otherwise.

Noncharitable Purpose Trusts

Under traditional common law principles, a noncharitable trust is not valid if it does not have an identifiable beneficiary.  Delaware’s noncharitable purpose trust statute, 12 Del. C. § 3556, validates noncharitable purpose trusts.  Delaware has been widely viewed as the leading jurisdiction in this area of trust law and, in recent years, purpose trusts have become more popular, particularly as structures to maintain the stewardship of a business.  Other popular uses of purpose trusts include maintaining a collection, such as automobiles, guns, manuscripts or memorabilia, maintaining a piece of real estate in perpetuity, maintaining a cryogenically preserved person or animal, or promoting a cause that is not charitable.

Section 3556 of Title 12 of the Delaware Code has been amended in several ways. First, subsection (b) now states that, unless the trust’s governing instrument states otherwise, a person is not deemed to be a beneficiary of a purpose trust “solely because the person received or receives disbursements from the trust in furtherance of the declared purpose of the trust”.  This clarifies that a person is not entitled to the same rights as a beneficiary of a trust solely because such person received or receives distributions from the purpose trust in furtherance of the trust’s purpose.  Thus, settlors of purpose trusts can provide for distributions in furtherance of the purpose of the trust without bestowing upon such persons the rights of a beneficiary, like rights to demand an accounting or having standing to interfere with the purpose of the trust.  Additionally, making such person’s non-beneficiary status clear may have income tax consequences, including state income taxation consequences in Delaware or other states.

Subsection (c) was amended to adopt a new defined term for an “enforcer”.  An enforcer is a person appointed for the purpose of enforcing the purpose trust.  An enforcer may be appointed by the terms of the governing instrument, as permitted under 12 Del. C. § 3303(b), or by the Delaware Court of Chancery.  A person who has “a general interest in the declared purpose of the trust other than a general public interest” may petition the Delaware Court for an order appointing an enforcer or to remove any person serving or previously nominated to serve as enforcer.  In addition, a purpose trust’s governing instrument may provide that the enforcer or some other person has “exclusive standing” to enforce the terms of such trust.  This ensures that drafters of purpose trust governing instruments can specify with clarity who may have standing or exclusive standing to enforce the purpose trust.  

New Subsection (e) provides that an enforcer will serve in a fiduciary capacity by default, unless the terms of the governing instrument provide that the enforcer shall serve in a nonfiduciary capacity.  This puts the role of enforcer in parity with the roles of direction advisers and trust protectors under 12 Del. C. § 3313(a), and designated representatives under 12 Del. C. § 3339(d), which statutes provide that those roles are fiduciary roles by default, unless the terms of the governing instrument provide otherwise.

New Subsection (f) provides that a person who accepts appointment as an enforcer “submits to the personal jurisdiction of [Delaware] regarding any matter related to the trust”. This also puts the role of enforcer in parity with the roles of direction advisers and trust protectors under 12 Del. C. § 3313(g) and designated representatives under 12 Del. C. § 3339(d).  All of those provisions, including the new enforcer provision, provide that this does not preclude other methods of obtaining jurisdiction over the enforcer of a trust.

New Subsection (g) was added to provide that, except as otherwise provided in the governing instrument, a purpose trust may utilize Delaware’s NJSA statute (12 Del. C. § 3338) and Delaware’s consent modification statute (12 Del. C. § 3342) without the need for any beneficiary as an “interested person”, for purposes of Section 3338, or without the need for the written consent or written nonobjection of any beneficiary for purposes of Section 3342.  Relatedly, new Subsection (h) of Section 3556 further provides, unless otherwise provided in the trust’s governing instrument, when one or more enforcers are serving with respect to a purpose trust, (i) each enforcer then serving is an “interested person” of the trust for purposes of Section 3338 and (ii) the written consent or written nonobjection of each enforcer then serving is required for purposes of Section 3342.  The addition of new Subsections (g) and (h) to Section 3556 provide clarity that, although a purpose trust lacks an identifiable person as beneficiary, NJSAs under Section 3338 and consent modification agreements under Section 3342 may be utilized with an enforcer, unless otherwise provided in the trust’s governing instrument.  These changes allow for the resolution of matters arising with respect to the administration of purpose trusts without the time and expense of a judicial proceeding.  The changes also make NJSAs and consent modifications more accessible to purpose trusts because they establish procedures when the trust has no identifiable beneficiary, a situation unique to purpose trusts.

In addition to the amendments to the noncharitable purpose trust statute, Trust Act 2025 also amended the definitions of “fiduciary”, “trustee”, and “officeholder” found in other parts of Title 12 of the Delaware Code to include the newly defined role of “enforcer”, thus including enforcers within the scope of numerous other provisions of Title 12 that apply to such roles.

Section 3301(d) was amended by adding enforcers that are acting in a fiduciary capacity to the definition of “fiduciary” and adding enforcers that are not acting in a fiduciary capacity to the definition of “nonfiduciary”.  Section 3580 of Title 12 of the Delaware Code was also amended to include enforcers within the definition of “trustee” for purposes of Subchapter VII of Chapter 35 of Title 12.[1]  Trust Act 2025 also amended Section 3326 of Title 12 of the Delaware Code to include enforcers among the definition of an “officeholder” for purposes of establishing an enforcer’s right to resign. 

All of these changes place an enforcer on the same plane as other trust fiduciaries. For example, Subchapter VII of Chapter 35 of Title 12 includes numerous Sections related to “trustees” such as:

• the liability of a trustee for breaches of trust and equitable remedies (Section 3581),
• damages against a trustee for breach of trust (Section 3582),
• liability in the absence of a breach (Section 3583),
• the ability to obtain an award of attorneys’ fees and costs (Section 3584),
• the various statutes of limitations that apply to trustees (Section 3585),
• the limitation of liability for good faith reliance on the terms of the governing instrument (Section 3586),
• the impact of events affecting the administration or distribution of a trust (Section 3587),
• the limitation of liability applicable to a consent, release or ratification (Section 3588), and
• the ability to give a certification of trust (Section 3591).

Including enforcers within the Scope of 12 Del. C. § 3326, means enforcers are also granted statutory authority to resign if there is no authorization to resign in the governing instrument and enable them to use an NJSA or consent modification agreement to accomplish that.  Revisions to Section 3326 made by Trust Act 2025 are discussed in more detail below.

Inclusion of enforcers in the definition of “fiduciary” under 12 Del. C. § 3301 means that any reference to “fiduciary” in Chapters 33, 35, 39 and 45 of Title 12 of the Delaware Code will include enforcers acting in a fiduciary capacity (in addition to other fiduciaries included in the definition, such as trustees, personal representatives, guardians and custodians, advisers and designated representatives).  The implications of this are far-reaching.

Resignation of Officeholders

Prior to Trust Act 2025, Section 3326(b) of Title 12 of the Delaware Code granted statutory authority for an officeholder to resign (i) if the governing instrument expressly permits the officeholder to resign, in accordance with the terms of the governing instrument; (ii) if the governing instrument neither expressly permits nor prohibits the officeholder’s resignation, but establishes a procedure for the appointment of a successor officeholder upon 30 days’ written notice to beneficiaries, those holding the power to appoint a successor, and any other officeholders; or (iii) in all other cases, with the approval of the Court of Chancery.  Consequently, if the trust’s governing instrument did not include a resignation provision, and also did not include a mechanism for appointing a successor, there was no way for an officeholder to resign without a court order.  Trust Act 2025 has expanded the mechanisms available for resignation and appointment of officeholders and has made it clear that the conditions authorizing resignation under Section 3326 do not preclude the use of an NJSA pursuant to Section 3338 or a consent modification agreement pursuant to Section 3342 to accomplish a resignation and appointment of an officeholder.  Specifically, Subsection (b) now provides that an officeholder may resign, even if either paragraph (b)(1) or (b)(2) of Section 3326 applies, by a consent modification agreement pursuant to Section 3342, and if paragraphs (b)(1), (b)(2), and (b)(3) of Subsection (b) do not apply, by a NJSA pursuant to Section 3338.

Discretionary Interests

Section 3315(b) of Title 12 of the Delaware Code includes Delaware’s characterization of a discretionary interest in trusts and provides spendthrift protection, although Section 3315 is not Delaware’s spendthrift statute, which is found at 12 Del. C. § 3536.  Section 3315(b) provides that a beneficiary eligible to receive distributions in a fiduciary’s discretion has a “discretionary interest” and a discretionary interest is a mere expectancy and not a property right.  It also provides that a beneficiary eligible to receive distributions from a trust in the discretion of a fiduciary has a discretionary interest in the trust, even if such interest is subject to an ascertainable standard.  It provides that an interest that includes mandatory distribution language, such as “shall”, but is qualified by discretionary distribution language, is a discretionary interest.  This provision proffers strong creditor protection for trusts governed by Delaware law.

Trust Act 2025 adds new language to Section 3315(b) to expressly provide that a beneficiary who has a discretionary interest in a trust shall not be deemed to have a right to compel a distribution from the trust.  This addition effectively codifies the practical effect of the existing language, and further bolsters the strong creditor protections afforded under Delaware law.

Amended Section 3315(b) also reasserts that nothing within the subsection shall be deemed to alter the standard of review of the discretion of the fiduciary under Section 3315(a). The abuse of discretion standard applied under Section 3315(a) provides that when a governing instrument does not limit the exercise of a fiduciary’s discretion, a court should only interfere if the fiduciary has acted dishonestly or from an improper motive as opposed to evaluating the reasonableness of the fiduciary’s exercise of discretion. 

Trust Act 2025 also deletes two instances of the word “trustee” as being redundant because the term “fiduciary” is already defined to include trustees.

Marital Property

Section 1513(b) of Title 13 of the Delaware Code was amended to address an ambiguity in the situation where one spouse makes a gift in trust for the other spouse. Section 1513(b) provides a definition of “marital property” for Delaware purposes.  It states that all property acquired by either spouse subsequent to the marriage is marital property.  Then, Section 1513(b) carves-out of that definition any property acquired by a spouse by bequest, devise or descent or by gift, including a gift in trust if one of the conditions listed under Section 1513(b) applies.  The prior version of Section 1513 excluded “gifts between spouses” from the carve-out for gifts.  Trust Act 2025 modified that exclusion so that it now reads: “excluding gifts between spouses that are made outright and free from trust”.  In other words, only gifts between spouses that are outright and free from trust are still included in marital property.  A new additional category of gifts that qualify for the carve-out from marital property was added by Trust Act 2025.  It provides that a gift to a spouse is not included in martial property if “[u]nless the trust instrument expressly provides otherwise, the gifted property is created by a donor spouse, of which the donee spouse is a beneficiary, regardless of whether other individuals are beneficiaries of the same trust”.  Consequently, when one spouse makes a gift outright to the other spouse, it is included in the definition of marital property.  However, when one spouse makes a gift in trust for the other spouse, even if there are other beneficiaries of the trust, the donee spouse’s interest in the trust is not marital property, unless the trust’s governing instrument provides otherwise.  This amendment provides certainty regarding treatment of trusts such as Spousal Lifetime Access Trusts (so-called SLATs) and Marital Qualified Terminable Interest Property Trusts (so-called QTIPs) in the event of divorce. 

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[1] The definition of “trustee” in Section 3580 is a bit of a misnomer, and the references to “trustees” in Subchapter VII of Chapter 35 can be a bit confusing for some to the extent that provisions apply to a “trustee” because the definition of that term includes persons who direct, consent to or advise a trustee, designated representatives and now also enforcers. 

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