Part II · Jurisdictions · No. 01

Delaware

More than half of all U.S. publicly traded corporations and a substantial share of all private-wealth entities are organized in Delaware. The Court of Chancery, the Limited Liability Company Act, the trust statutes, and the absence of state sales tax together make Delaware the default for U.S. luxury-asset holding entities.

Why this jurisdiction matters

Delaware is not principally a tax-haven jurisdiction; it is a corporate-law jurisdiction. The state has cultivated for more than a century a legal infrastructure for business entities and trusts — sophisticated statutory framework, specialized courts, experienced bar, predictable judicial output. For luxury-asset planning specifically, Delaware serves as:

• Formation state for holding LLCs and partnerships that title yachts, aircraft, art, and real-estate holdings.
• Trust situs for dynasty trusts, asset-protection trusts, and directed trusts.
• Holding location for non-resident-owned U.S. real estate, especially trophy commercial property held through blocker structures.
• Domicile for family offices and their affiliated entities.

The relevant tax regime

• No state sales or use tax. Delaware imposes no broad-based sales tax. Acquisition of tangible personal property in Delaware does not produce sales tax, which is relevant for art, aircraft and yacht acquisitions structured to close in the state (the buyer’s home state may still impose use tax). Sellers pay a gross receipts tax instead. Vehicles titled in Delaware bear a motor-vehicle document fee of 5.25% of the purchase price or book value, whichever is higher (raised from 4.25% on 1 October 2025).
• State income tax on individuals. Top marginal rate of 6.6%; applies to Delaware-resident individuals.
• State income tax on entities. 8.7% corporate rate; LLCs taxed at the federal classification by default. Pass-through entities pay no state-level entity tax but Delaware-resident members pay personal income tax.
• Franchise / annual tax. LLCs, LPs and general partnerships pay a flat $300 annual tax (due 1 June). Corporations pay franchise tax computed under the authorized-shares or assumed-par-value-capital method.
• No state estate tax. Delaware’s estate tax was repealed for deaths after 31 December 2017.
• No state inheritance tax.
• Trust income tax. Delaware-resident trusts (with Delaware trustee and Delaware administrators) generally pay no Delaware income tax on income accumulated for non-Delaware beneficiaries.

Registration or residency mechanics

LLC formation: file Certificate of Formation with the Delaware Division of Corporations; pay the filing fee ($110 as of 2026); appoint a registered agent. Annual LLC tax of $300. No information about members is disclosed in public filings.

Trust situs: appoint a Delaware-resident trustee (institutional or individual); incorporate Delaware-choice-of-law and -administration provisions in the trust instrument; conduct administrative activities in Delaware.

Reporting and disclosure

Public records of entity formation are limited. Members of an LLC are not disclosed publicly. The Corporate Transparency Act originally required beneficial-ownership reports to FinCEN from most Delaware LLCs and corporations. FinCEN’s March 2025 interim final rule exempted all entities formed in the U.S. (and U.S.-person beneficial owners), so Delaware entities no longer file; only entities formed abroad and registered in a state still report. See beneficial-ownership reporting.

Trust records are private. Trust accounting is generally not publicly filed.

The substance question

For Delaware to function as the operative jurisdiction (rather than merely the state of formation), substance requirements vary:

• For LLCs in routine commercial use: formation alone is sufficient for entity recognition; substance is required to claim state-residency-specific benefits (e.g., to use Delaware as the state of LLC tax residence for income-tax sourcing purposes).
• For trusts: Delaware-resident trustee with substantive administration is required to claim Delaware as the situs for state-income-tax-residency purposes and to access Delaware's perpetuities and decanting statutes.
• For asset-protection trusts under the Qualified Dispositions in Trust Act: Delaware-resident trustee, administration in Delaware, four-year statute of limitations on creditor claims for transfers, and specific statutory requirements at 12 Del. C. §3570.

Recent changes

Delaware’s estate tax was repealed for deaths after 2017. The perpetuities statute (25 Del. C. §503) permits perpetual personal-property trusts, with a 110-year limit for real property held directly in trust. The LLC Act is amended almost every year. In March 2025, SB 21 amended the General Corporation Law (§144 controlling-stockholder safe harbors; §220 books-and-records requests) amid companies reincorporating elsewhere. FinCEN’s March 2025 interim final rule removed CTA reporting for Delaware-formed entities. The vehicle document fee rose to 5.25% on 1 October 2025. Figures as of October 2026.

Common asset classes parked here

• Private aircraft — Delaware-LLC titling, often combined with Montana operational base or offshore registration.
• Classic and exotic cars — Holding LLC formation; combined with use-state registration.
• Fine art — Holding LLC formation; combined with specialist storage, including freeport storage abroad.
• Yachts — Delaware LLC paired with Cayman or Marshall Islands flag.
• Trophy real estate — Holding LLC structure; series-LLC option for multi-property portfolios.
• Dynasty trusts — Delaware perpetual personal-property trust as alternative to South Dakota.

Reviewed October 2026