In 1983, South Dakota became the first “boutique dynasty trust” jurisdiction without a state income tax. Since that time, South Dakota has adopted innovative modern trust laws that have solidified the state’s status as one of the nation’s top trust jurisdictions.
South Dakota combines top-rated trust, privacy, tax, and asset protection laws with a strong economy and supportive state government. Most importantly, all of the benefits of South Dakota’s trust laws can be enjoyed by families across the nation and world without the necessity of residing within the state.
South Dakota also has excellent self-settled trust and third-party discretionary trust laws, allowing for sophisticated domestic asset protection planning. South Dakota also has some of the nation’s strongest asset protection laws for limited liability companies and limited partnerships.
Here are just four reasons why South Dakota is recognized as the top-ranked trust state in the nation.
1. Privacy
South Dakota does not require trust documents to be publicly filed. Updates or changes to a trust do not need to be filed with a South Dakota court. Privacy is a priority in South Dakota.
2. Asset Protection for Discretionary Trusts
South Dakota was the first state in the nation with a “discretionary support statute.” Under South Dakota law, a discretionary interest in a trust is not a property interest. Also, limited powers of appointment and remainder interests are not property interests. This can become extremely important from an asset protection perspective.
3. Dynasty Trusts
South Dakota has some of the top dynasty trust laws in the nation. Our state is unique in that it allows for a perpetual purpose trust – this means that the purpose trust has no restriction as to length of time it can exist.
4. Taxation
South Dakota has no state income tax or state capital gains tax for assets held in trust.
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