ADVANTAGES OF
SOUTH DAKOTA
TRUST SITUS

SOUTH DAKOTA DOES NOT IMPOSE STATE INCOME TAXES ON TRUSTS

Because South Dakota has no state income tax, trust assets are able to grow free of state income tax. With respect to an existing trust, the change of situs of that trust to South Dakota may eliminate future state income taxes for the trust, depending on the applicable state law of the prior situs.

SOUTH DAKOTA PERMITS PERPETUAL TRUSTS, & WAS ONE OF THE FIRST STATES TO DO SO

South Dakota law permits “Dynasty Trusts” that can endure forever, providing beneficial estate, gift and generation-skipping transfer tax-planning opportunities and enhancing the benefits of no state income tax.

SOUTH DAKOTA IS KNOWN FOR ITS CREDITOR PROTECTION LAWS & AUTHORIZES THE USE OF DOMESTIC ASSET PROTECTION TRUSTS (DAPT)

South Dakota is one of a small number of states that permit self-settled domestic asset protection trusts. Its DAPT statute is considered among the best. South Dakota has many other asset protection statutes that have helped make it one of the best asset protection jurisdictions in the United States.

SOUTH DAKOTA PERMITS THE USE OF “DIRECTED TRUSTS” WHICH ALLOW FOR A PERSON OR ENTITY OTHER THAN THE TRUSTEE TO BE RESPONSIBLE FOR TRUST-RELATED DECISIONS LIKE INVESTMENT MANAGEMENT & DISCRETIONARY DISTRIBUTIONS

South Dakota is consistently recognized as having a top-rated directed trust statute. A directed trust provides the opportunity for an entity, committee or advisor to assume responsibility for investment or distributions of a trust. Directed trusts provide additional control and flexibility in the management of the trust and present opportunities to minimize administrative fees.

SOUTH DAKOTA LAW PROVIDES FLEXIBILITY FOR TRUST MODIFICATIONS

South Dakota has advantageous trust decanting, reformation and modification statutes and also recognizes the use of trust protectors which allow for flexibility in estate and tax planning.

FOR TRUSTS THAT OWN OR MAY OWN INSURANCE, SOUTH DAKOTA IS AMONG THE BEST JURISDICTIONS IN THE UNITED STATES

South Dakota has one of the lowest insurance premium taxes in the country for insurance policies in trust. As a result, South Dakota presents opportunities for domestic insurance planning without the compliance hassles that can accompany offshore accounts. Furthermore, South Dakota has a number of favorable insurance statutes that make it ideal for trusts that hold insurance policies.

SOUTH DAKOTA TRUST LAWS
EMPHASIZE PRIVACY

South Dakota trust laws allow for the creation of “quiet trusts” that give the grantor the ability to restrict and even conceal the existence and funding information regarding a trust from the trust beneficiaries.