South Dakota Trust Law Dominance
Over the last decade, South Dakota has been recognized as a leader in trust law and a top-ranked state by Trusts & Estates magazine.
Advisor friendly trust companies find South Dakota trust statutes important for wealth migration. The South Dakota legislature is in session every year, allowing for more progressive and current action and oversight of trust legislation compared to other states.
South Dakota, in 1983, was one of the first states to permit trusts to exist in perpetuity. South Dakota was the first state with a discretionary trust statute for asset protection.
South Dakota does not require trust documents to be filed publicly. Updates or changes to a trust do not need to be filed with a South Dakota court. Privacy is a priority in South Dakota. Delaware provides a considerable less favorable privacy rules with only a 3-year seal.
At Wealth Advisors Trust Company, family members, and their professional advisors are involved in traditional roles fulfilled by the trustee through directed or delegated trusts.
South Dakota has no state income or state capital gains tax for those assets held in trust.
Directed Trust/Delegated Trusts
South Dakota legal trust statutes allow the creators of a trust to direct or to delegate the trust company to follow the investment choices and asset allocation decisions of an outside advisor. 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.
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.