Can a Trust Own an LLC in Delaware?

Yes. Delaware law permits trusts to own LLCs with no restrictions. A trust qualifies as a member under 6 Del. C. § 18-101(9) and receives all member rights under 6 Del. C. § 18-301 et seq. The trustee acts on behalf of the trust in LLC matters, and profits, losses, and distributions flow to the trust unless the Operating Agreement specifies otherwise.

How Trust Ownership Works

Delaware's LLC statute does not restrict membership to individuals or corporations. A trust becomes an LLC member by being named in the Operating Agreement or through a membership assignment. The trustee exercises voting and management rights on the trust's behalf, while the trust holds the economic interest.

The trust receives all standard member rights: profit and loss allocation (equal by default unless the Operating Agreement provides otherwise), distribution rights, and participation in member decisions. Delaware's freedom of contract principle (6 Del. C. § 18-1101(b)) allows the Operating Agreement to customize these rights however the parties choose.

Operating Agreement Requirements

Delaware does not mandate a written Operating Agreement (6 Del. C. § 18-101(9)), but one is strongly recommended when a trust is the member. The agreement should specify:

Whether the trustee or trust exercises voting authority
Distribution and profit-sharing allocations
Successor trustee procedures
Restrictions on membership transfer

Without an agreement, Delaware's statutory defaults apply, but custom terms provide clarity and protect the trust's interests.

Key Advantages

Liability Protection: The trust's creditors cannot seize the LLC membership interest. Delaware's charging order protection (6 Del. C. § 18-703) limits creditor remedies to distributions only.

Privacy: Delaware's anonymous LLC rules (6 Del. C. § 18-101) allow the Certificate of Formation to omit member names. The trust can own the LLC while remaining off public record.

Estate Planning: Trust ownership centralizes asset management, simplifies succession when the trustee changes, and aligns with multi-generational wealth strategies.

Before You Form

Verify trust authority — Review the trust document to confirm the trustee can invest in and manage LLC interests.
Draft the Operating Agreement — Clarify the trustee's powers and how distributions flow to the trust.
File the Certificate of Formation — List the trust or trustee as the member with a Delaware registered agent.
Consult a Delaware attorney — Ensure the structure aligns with your estate planning and tax goals.

This is general information, not legal advice.