South Dakota combines top rated trust, privacy, tax and asset protection laws with a cost-efficient and dedicated workforce, strong economy and supportive state government.
Importantly, all the benefits of South Dakota, including most of the unique and creative trust strategies for the wealthy, can be enjoyed by families across the country and globally without the necessity of having the family reside in the state.
Furthermore, South Dakota was one of the first states (1983) to allow a trust to endure perpetually, theoretically forever jumping outside the onerous federal transfer (gift, estate and generation-skipping) tax system. Currently, thirty other states and Washington D.C. have joined the ranks of offering a long-term trust. Twenty-one of these states and Washington D.C., including South Dakota, allow for a trust to go on in perpetuity.
South Dakota’s Economic Strength
- Top State for Bank Assets
- Among the Lowest Unemployment Rates in the U.S.
- Balanced Budget
- 100% Funded Pension (only state)
Industry leading modern trust and privacy laws, coupled with the of absence of state taxation on the assets within the trust (no state income, capital gains, dividend/interest or intangible tax), distinguish South Dakota from these other dynasty states. Additionally, South Dakota has one of the lowest insurance premium tax rates of any state (i.e., 8 basis points or 8/100ths of 1%) and offers other very favorable insurance legislation.
South Dakota also has excellent self-settled trust and third-party discretionary trust statutes, allowing for excellent domestic asset protection planning. South Dakota was the first state in the U.S. with a discretionary trust statute for asset protection, which states that a discretionary interest in either a self-settled or a third-party trust, a limited power of appointment, or a remainder interest are not considered property interests. This statute further enforces the spendthrift clause and, consequently, is very important for trusts set up to benefit one’s family. Additionally, South Dakota also has some of the top rated asset protection statutes for LLCs and LPs based upon a powerful charging order protection as the sole remedy.
Lastly, SDTC continues to seek ways to better serve their clients and advisors. In fact, one of SDTC’s founders, Pierce McDowell, had a very prominent role on the state’s trust legislative committee for more than 23 years and assisted with new cutting edge legislature each year along with several other key employees. This ensures that SDTC and the state of South Dakota may continue to best serve clients and their advisors with the best trust, privacy, asset protection and tax laws of any state.
