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On August 6, 2020, Delaware Governor John C. Carney signed House Bill 334 into law (“Trust Act 2020”).  Here are the key provisions of the Trust Act.

Enhancements to statutes regarding nonjudicial settlement agreements and modification with grantor’s consent or nonobjection (12 Del. C. §§ 3338 and 3342):

• When a grantor is a party to a nonjudicial settlement agreement under section 3338, or when a trust is modified with a grantor’s consent/nonobjection under section 3342, then:
  • the beneficiaries needing to consent are all of the trust’s beneficiaries (tracking federal tax law); and
  • the grantor can’t virtually represent anyone else (unless the grantor certifies in writing that the trust is an incomplete gift for federal gift tax purposes)

Somewhere along the way, director and officers of charitable foundations have started to view their fiduciary responsibility as standing guard over their organizations’ investment funds by stridently focusing on capital growth and preservation.  While well-meaning, standing guard has also meant standing in the way of the very missions – the good works – these organizations are entrusted to do for our communities.

In its last session, the Delaware legislature passed a number of amendments to the Delaware General Corporation Law (the “DGCL”), the Delaware Limited Liability Company Act (the “DLLCA”), the Delaware Revised Uniform Limited Partnership Act (“DRULPA”) and the Delaware Revised Uniform Partnership Act (“DRUPA” and, together with the DLLCA and DRULPA, the “alternative entity statutes”). Delaware Governor John Carney signed these bills into law on July 16, 2020. The amendments largely become effective upon enactment, with certain exceptions.