Advantages of Trust Adminstration in South Dakota
South Dakota is known as a "wealth friendly" state. As such, First PREMIER Bank can help you or your client access our favorable tax and trust laws. Here are just some of the advantages of establishing a trust in South Dakota:
- South Dakota has no state income tax. The impact is increased revenue for distribution to beneficiaries of irrevocable trusts with a South Dakota status.
- South Dakota has no rule against perpetuities. Most states require a trust to "terminate" at the end of a set period of time (effectively 80 to 100 years). That opens the trust to taxation, potential litigation and disagreements among beneficiaries, etc. Families with substantial wealth may want to see the trust "go on forever." That can only happen in a state that has no rule against perpetuities — like South Dakota.
- Trust administrative provisions, including investment authority can be delegated to co-trustees and agents of the trustee. Trustees may disclaim powers granted to a trustee under a trust instrument. A South Dakota trustee can "unbundle" services that the family would prefer to see performed by others. These services could include investment management, custody of assets, recordkeeping, etc.
- Trust protectors and trust advisors are permitted under the South Dakota Directed Trust Law, and fiduciaries can be prevented from exercising certain powers that can be reserved to the grantor, a trust protector, or a trust advisor.
Contact us for more information.