South Dakota legal trust statutes allow the creators of a trust to direct or to delegate the trust company to follow the investment and/or distribution choices of an outside advisor.  In these directed trust or delegated trust arrangements, control over the assets (and the investment fees they generate) remains with the legacy advisor, while the corporate trustee administers the trust itself.

In these directed or delegated trust arrangements, control over the assets (and the investment fees they generate) remains with the legacy advisor, while the corporate trustee administers the trust itself.

Also known as Asset Protection Trust, South Dakota has enacted legislation which prohibits judicial foreclosure and creditor attachment on beneficial interests in trusts, powers of appointment held by beneficiaries, and reserved powers by a beneficiary. Additionally, a power of appointment in a trust is specifically excluded as a property interest.  South Dakota was the first state with a discretionary trust statue for asset protection.

South Dakota is one of a handful of states in the United States that provide creditor protection for self-settled trusts. This is a type of trust into which a client transfers assets and he or she is the beneficiary. The client may retain a level of control over trustees or trust advisors, retain certain disposition rights to the trust, and the trust assets can still be protected from creditors.