WeVote
Log In

Bill

Bill

SB 327

AN ACT TO AMEND TITLE 5 AND TITLE 12 OF THE DELAWARE CODE RELATING TO FAMILY TRUST COMPANIES.

153rd General Assembly (2025-2026) Introduced by Bill Bush and 5 co-sponsors

Delaware SB 327 updates rules for family trust companies, clarifying governance, permissible activities, disclosures, and regulatory framework to improve oversight and protections.

Passed By House. Votes: 41 YES
0
WeVote Research Nonpartisan
Bill Summary · SB 327

Summary of SB 327 (Session 153, Delaware)

Purpose and intent

  • SB 327 proposes amendments to Title 5 (Corporations and Business Organizations) and Title 12 (Banks and Other Financial Institutions) of the Delaware Code.
  • The overarching aim is to update the regulatory framework surrounding family trust companies (FTCs), clarifying their structure, governance, and permissible activities, and aligning Delaware law with evolving industry practice.

Key provisions and changes

  • Definition and scope of Family Trust Companies (FTCs): The bill refines how FTCs are defined, including what activities they may conduct, and the types of trusts and entities they can serve.
  • Governance and management requirements:
    • Clarifies board composition, fiduciary duties, and oversight mechanisms applicable to FTCs.
    • Sets standards for conflict-of-interest avoidance, director qualifications, and periodic independence assessments where relevant.
  • Fiduciary and trust operations:
    • Establishes required practices for prudent investment, risk management, and reporting to beneficiaries or founders as applicable.
    • Outlines permissible trust administration activities, including trustee roles, trust administration services, and related administrative functions.
  • Capital, registration, and regulatory status:
    • Specifies capitalization expectations, reporting requirements, and whether FTCs must register with a state regulatory body or remain under a flexible regulatory framework.
    • Addresses startup, ongoing compliance, and potential fees or filing requirements tied to FTC operations.
  • Relationship to banks and financial institutions:
    • Details the interaction between FTCs and Delaware banks or other financial institutions, including options for fiduciary services, custodial arrangements, and potential licensing considerations under Title 5 and Title 12.
  • Consumer and beneficiary protections:
    • Enhances disclosures to beneficiaries, ensures transparency in fiduciary decisions, and sets expectations for disclosures in funding, distributions, and account management.
  • Enforcement and penalties:
    • Establishes enforcement authorities and potential penalties for noncompliance with FTC-specific provisions, while preserving due process rights.

Who or what would be affected

  • Family trust companies operating in Delaware or seeking to establish FTCs under Delaware law.
  • Founders, beneficiaries, and fiduciaries involved in family trusts that utilize FTC structures for management and governance.
  • Banks and financial institutions that provide custodial, advisory, or fiduciary services to FTCs.
  • Delaware regulators and state agencies responsible for corporate, banking, and fiduciary oversight.

Procedural and timeline aspects

  • Introduction and assignment: SB 327 was introduced and assigned to the Banking, Business, Insurance & Technology Committee in the Senate on May 19, 2026.
  • Next steps: The bill will be considered by the relevant committee, which may hold hearings, propose amendments, and eventually vote to advance to the full Senate or House, depending on the chamber’s process. If advanced, it would proceed through the usual Delaware legislative timeline (floor readings, potential amendments, and final passage) before any gubernatorial signature.

Additional context

  • The bill is sponsored by multiple lawmakers (co-sponsors include Brian Pettyjohn, Spiros Mantzavinos, Bryan Townsend, and Bill Bush), indicating bipartisan attention to FTC regulation.
  • As with many professional fiduciary reforms, anticipated outcomes include clearer governance standards, improved beneficiary protections, and a more predictable regulatory environment for FTCs operating in Delaware.

If you would like, I can tailor this summary to highlight specific sections once the bill’s text is available, including exact statutory changes, defined terms, and any proposed regulatory agencies or filing requirements.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.