A proposed piece of legislation in Delaware would open the door for a new kind of state-regulated financial institution — one built exclusively to serve a single family’s wealth management needs.
The bill, which amends Title 5 and Title 12 of the Delaware Code, would establish a formal charter for what it calls a “family trust company.” Unlike traditional commercial trust companies that serve the general public, this new structure would be limited to managing assets for one family, along with any trusts, entities, and charitable organizations connected to that family.
Delaware’s existing reputation for strong trust laws and financial services infrastructure serves as the foundation for this proposal. Lawmakers say the new charter is intended to give families a dedicated, state-supervised option for managing their financial legacy.
Under the bill, the State Bank Commissioner would be directed to create separate regulations, application procedures, and oversight practices specifically for family trust companies. Because these institutions carry a different risk profile than public-facing commercial trust companies, regulators would tailor their supervision accordingly.
A key focus of that oversight would be helping the leadership of family trust companies understand and fulfill their fiduciary responsibilities — meaning their legal duty to act in the best interest of the family members they serve. The Office of the State Bank Commissioner would also assist with record-keeping, auditing, reporting, and risk management.
The bill outlines minimum capital and surplus requirements, sets a permissible range for licensing fees, and establishes the criteria an applicant must meet to receive a certificate of authority to operate as a family trust company. Certain insurance coverages would also be required, and the legislation encourages — though does not mandate — independent audits.
Importantly, the bill specifies that in cases where Delaware law is meant to govern how a trust is administered, the actual management of that trust must take place within the state.
Because the legislation touches on Delaware’s general corporation law, it requires more than a simple majority to pass. Under the Delaware Constitution, a two-thirds vote from members elected to each chamber of the General Assembly is needed for approval.
