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Why South Dakota?

There is a reason that so many of the Forbes 400 and other wealthy families have chosen to situs their trusts in South Dakota. Many families assume all of the long term and unlimited duration dynasty trust states are the same, when there are actually dramatic differences that they should be aware of and research. South Dakota was rated the #1 trust jurisdiction in the U.S. (January 2004, 2007) and was the highest ranked state: #1 in all categories (January 2010, 2012, 2014 & 2016) by Trusts & Estates magazine.

South Dakota has been a favorable boutique trust state for the wealthy since 1983. The legislature has proactively emphasized modern trust laws that answer the needs of wealthy families better and longer than any other state. The current trust laws combined with the legislative awareness and responsiveness are just a few of the reasons why South Dakota is the most favorable dynasty trust state in the U.S. for both directed and delegated trusts.

Some of the other compelling reasons are the unique South Dakota trust and tax statutes, which are listed below:

  • Pure no state income or capital gains taxes for trusts.
  • South Dakota has the best unlimited trust duration statute:
    • Pre 1986 statute, enacted prior to the modern Generation Skipping Transfer Tax.
    • Based upon the 1979 Murphy case, in which the I.R.S. acquiesced.
    • Only three states can make this claim: Idaho, South Dakota and Wisconsin
  • Self-Settled Trust/Asset Protection legislation:
    • Utilized for asset protection and other unique planning.
    • Excellent Third Party Beneficiary Trust legislations (possible discretionary trust distributions, limited powers of appointment and remainder interests are not considered property interests).
  • Lowest State Premium Tax (8 basis points vs. 200 basis points Delaware).
  • Excellent Insurance Laws.
  • Decanting, Reformation and Modification Statute to modernize an existing trust re administration. Very inexpensive and time efficient process in South Dakota court (non-judicial as well).
  • Best trust privacy statute in the U.S. (only state with total seal forever - Delaware generally sealed for 3 years, then open).
  • First Trust Protector statute in the U.S. (1997).
  • Great directed and delegated trust provisions allowing trustees to work with outside investment managers.

For additional information please contact us or visit SDTC's main website, www.sdtrustco.com.

The information on this Private Trusts website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.