South Dakota Is Again Considered A Top U.S. Trust Jurisdiction By Trusts & Estates Magazine

Trusts & Estates Magazine again names South Dakota as a top tier trust jurisdiction. Annually, Trusts & Estates Magazine evaluates trust jurisdictions utilizing an objective approach that considers the following factors: 1) whether a state has a Rule Against Perpetuities; 2) whether a state has income, inheritance, or premium taxes;  3) whether the state has adopted “modern trust laws” such as decanting provisions, directed trust capability, and privacy options; 4) whether a state has an asset protection statute and the effectiveness of the statute; 5) the effect of migration on the rights of beneficial interest.

Interestingly noting that Delaware, long considered to be a leading U.S. trust jurisdiction, is not keeping pace with other progressive U.S. trust jurisdictions, the authors’ state, “While Delaware has been in the top 4 jurisdictions consistently for the past ten (10) years, we think that its asset protection laws still need to be strengthened for it to remain competitive.” Alternatively, South Dakota has been consistently considered by many commentators and planners to be the best trust jurisdiction in the nation because of its cutting edge laws around asset protection, dynasty and directed trusts, and privacy. Trusts & Estates Magazine’s article again accentuates the vital importance of selecting the proper trust jurisdiction, stating, “Planning professionals catering to high net worth clients need to understand the difference in trust laws and planning opportunities, and how it affects those clients and their beneficiaries.” You can view the complete article entitled “Which Trust Situs is Best in 2018?” by clicking here. This article was featured on WealthManagement.com which is the digital resource of Trusts & Estates Magazine.

The authors’ conclusion is particularly compelling when considered in conjunction with the fact that South Dakota…

  • Is generally regarded by most practitioners and academics, including Steve Oshins, as being the best Dynasty Trust state, and having the best Decanting Statute in the nation. In addition, the authors of the aforementioned article concur with Mr. Oshins, stating, “South Dakota has the most flexible decanting statute…and appears to provide the best example of flexibility for trust remodeling.”
  • Unequivocally has the most robust privacy laws in the country, as pointed out by an article appearing in the January 2018 edition of Trusts & Estates Magazine comparing U.S. trust jurisdictions wherein the author noted, “Of the top tier trust jurisdictions, South Dakota has the best trust privacy laws.”
  • Is one of only two states with a Community Property Trust, a compelling tax planning tool for spouses.
  • Is the only state in the country with the Family Advisor, referred to as a “Trust Protector Light”, not mentioned in the article BUT a very important planning tool.
  • Has one of the lowest insurance premium tax in the nation at 8 basis points, which applies to BOTH policies held by individuals AND policies held within an LLC. (While Delaware boasts 0 basis points on policies held by individuals, policies held within an LLC – which is typically the case – are taxed at 200 basis points.)

When all of these attributes are considered in the aggregate, South Dakota clearly emerges as the superior trust jurisdiction in the nation. Click here for a well-researched chart comparing the leading U.S. trust jurisdictions, with a particular emphasis on areas that clearly distinguish South Dakota as the superior trust jurisdiction in the overall analysis. 

For more information, please contact Bridgeford Trust via our contact page.

 

South Dakota’s Decanting Statute Is Ranked for the 5th Time As Best In The Nation

South Dakota is once again ranked, for the 5th consecutive year, as having the top decanting statute in the nation! Published by Nevada attorney Steve Oshins, the new 5th Annual Trust Decanting State Rankings Chart is an excellent resource for advisors and clients because of his methodical and objective approach to evaluating the factors that impact the viability of a state’s decanting statute.

The concept of decanting has become a very powerful tool for planners to modify irrevocable trusts and has emerged as one of the most progressive planning strategies available in dealing with dynasty planning issues. Appropriately referred to as a “do over,” decanting essentially distributes assets from an irrevocable trust into a new trust with different, and presumably more desirable and flexible terms, leaving the unwanted terms in the original trust and not binding on the assets. Decanting is also a streamlined option for easily transferring a trust from one state jurisdiction to another more favorable jurisdiction, such as South Dakota, with directed and asset protection trust statutes.

Steve Oshins’ findings regarding South Dakota’s decanting statute is particularly compelling when considered in conjunction with the fact that South Dakota…

  • Is generally regarded by most practitioners and academics, including Steve Oshins, as being the best Dynasty Trust state in the nation.
  • Unequivocally has the most robust privacy laws in the country, as pointed out by an article appearing in the January 2016 edition of Trusts & Estates Magazine comparing U.S. trust jurisdictions wherein the author noted, “Of the top tier trust jurisdictions, South Dakota has the best trust privacy laws.”
  • Is one of only two states with a Community Property Trust, a compelling tax planning tool for spouses.
  • Is the only state in the country with the Family Advisor, referred to as a “Trust Protector Light.”
  • Has one of the lowest insurance premium tax in the nation at 8 basis points.

When all of these attributes are considered in the aggregate, South Dakota clearly emerges as the superior trust jurisdiction in the nation. Click here for a well-researched chart comparing the leading U.S. trust jurisdictions, with a particular emphasis on areas that clearly distinguish South Dakota as the superior trust jurisdiction in the overall analysis.

For a more detailed discussion about decanting and how it modifies irrevocable trusts that were once considered unchangeable, click here for an informative video on the concept and how it works in the planning process.

Please contact Bridgeford Trust via our contact page if you have any questions on decanting and the power of the South Dakota advantage.

 

Bridgeford Trust To Attend 52nd Annual Heckerling Institute On Estate Planning

Bridgeford Trust will be attending the 52nd Annual Heckerling Institute on Estate Planning from January 22-26 in Orlando, Florida. If you are attending Heckerling this year, we encourage you to join Bridgeford Trust and advisors from around the country and the world for two dynamic receptions that we are sponsoring.

Kick Off Reception – January 21, 2018

First, join us for a great kick off reception on Sunday, January 21st from 5:00pm – 7:00pm at Hawk’s Landing Golf Club, located right on the hotel grounds. Click here to RSVP for what will be a fun start to the conference with great food, spirits, and networking with friends and colleagues.

Cocktail Reception – January 24, 2018

Then on Wednesday, January 24th, we hope to see you at a cocktail reception to celebrate and learn more about the South Dakota trust advantage. This reception has developed into one of the conference’s premier events and is taking place from 5:45pm – 7:45pm in the Grand Ballroom. This year’s reception is entitled “Diamonds are Forever…and so is your South Dakota Trust” and yes, a real diamond will be given away so you won’t want to miss this! Click here to register.

Please join David Warren, Co-Founder, President, and CEO, and Kurt Trimarchi, Executive VP of Strategic Operations, of Bridgeford Trust, as well as others from the Bridgeford Trust team, for what promises to be two great events.

We look forward to seeing you in Orlando!

 

Tax and Privacy Haven – A Look At The U.S., CRS, and FATCA

Common Reporting Standard (CRS) has had a tremendous impact on planning for both domestic and international families with asset protection and privacy concerns. Very similar to FATCA, CRS is a powerful tool that is designed to reduce tax evasion and illegal financial activity by imposing very strong transparency rules and disclosure requirements relative to financial transactions.

While the reporting requirements of CRS and FATCA are similar, FATCA focuses on collecting information from individuals only holding U.S. based accounts, and such information is not shared with other countries. CRS is broader in scope, seeking global cooperation and the sharing of financial information between and among participating jurisdictions, with enhanced transparency in multi-national business and investment reporting. To date, well over 100 countries have committed to implement CRS, including jurisdictions traditionally used by families with privacy and asset protection concerns such as Switzerland, Cooks Islands, BVI, Nevis, and New Zealand. 

The United States has not signed on to CRS, prompting many planners, academics, and industry publications to consider the United States as both a tax and privacy haven. On May 16, 2016, Financial Times stated “America is the new Switzerland,” and the Washington Post stated on April 5, 2016, that “The United States is now becoming one of the world’s largest tax and secrecy havens.” The Daily Business Review, on April 25, 2017, stated that “The United States has become a place of choice for foreign investors.”

Because of CRS, and a myriad of other reasons, the financial services industry has seen a tremendous influx of international families coming to the Unites States, and to South Dakota in particular, to avail themselves of very strong privacy and asset protection provisions, and to take advantage of South Dakota’s status as a no state income tax state (to learn more about the power of South Dakota trust law, click here for a detailed information piece). This reality places a tremendous responsibility on financial institutions to perform very thorough due diligence, and to put very copious Know Your Customer (KYC) programs in place. In addition, it is imperative that the U.S. financial planning industry, as a whole, act responsible when planning for and working with international families, clearly differentiating between providing privacy solutions and NOT secrecy, and engaging in appropriate tax planning and NOT tax evasion. 

Understanding the vital importance of issues around international families coming to the United States, the South Dakota Division of Banking is proactively working very closely with trust companies such as Bridgeford Trust working in the international space to develop uniform regulations designed to protect against nefarious actors and to protect the overall integrity of the South Dakota trust industry. Bret Afdahl, Director of the South Dakota Division Banking stated, in a May 16, 2017, Financial Times article, “We are the chartering authority and, if something goes wrong, we own it. From a reputational standpoint, no one benefits from having something bad happen.”

Below is short video about CRS and how Bridgeford Trust is well positioned to responsibly and diligently work with international families.

For more information about CRS or how Bridgeford Trust can partner with international families coming to the United States and their advisors, please contact us via our contact page.

You can also learn more about this issue by clicking here for a recent webinar entitled “A Tax and Privacy Haven: Coming to America” that was originally produced on Thursday, September 7, 2017.

 

South Dakota Foreign Grantor Trust

For a myriad of reasons, including privacy and asset protection, wealthy families from around the world are seeking U.S. trust solutions. Because of the power and sophistication of its trust laws, international families are increasingly selecting South Dakota for trust situs of Foreign Grantor Trusts.

Through appropriate planning and drafting, a South Dakota Foreign Grantor Trust may be established as a “foreign” trust for U.S. tax purposes and therefore treated the same as an offshore trust, while availing itself of powerful U.S. trust laws. Failure of the “Court Test” or “Control Test,” as outlined by the IRS, will result in the trust being treated as a non-U.S. entity and therefore not subjecting it to U.S. Taxation. Since the trust is considered a South Dakota trust for legal purposes, the state’s industry leading dynasty trustasset protection, and privacy laws may also be incorporated into the trust.

Compelling aspects about South Dakota trust law that render it the U.S. trust jurisdiction of choice for international families include that fact that the state has consistently been ranked as the top U.S. dynasty trust state and its decanting statute has consistently been ranked as the most progressive in the nation. In addition, South Dakota has the strongest privacy provisions and one of the most powerful domestic asset protection statutes in the nation, as recently observed by Trust & Estates magazine. Consistently recognized as an innovator in the trust industry, South Dakota is also one of only three states with a Community Property Trust statute, a very powerful tax planning tool, and the only state in the nation with the Family Advisor role, referred to as a “trust protector light.” Click here to view a chart comparing the leading U.S. trust jurisdictions, with a particular emphasis on these areas that clearly distinguish South Dakota as the superior U.S. trust jurisdiction.

For more information about Foreign Grantor Trusts, please click here or contact us via our contact page.

Bridgeford Trust to Present at the Holland & Knight 2017 South Florida Wealth Conference

David Warren, Co-Founder, President and CEO of Bridgeford Trust, will be presenting at Holland & Knight’s annual South Florida Wealth Conference taking place in Miami on November 8, 2017. Holland & Knight is a global law firm with more than 1,250 lawyers and other professionals in 27 offices throughout the world.

The conference features topics including Estate Planning and Divorce, Planning for Special Assets (Aircraft, Yachts, Bitcoin), and Issues in International Wealth Planning. David will be presenting with Stewart Kasner, Kevin Packman, and Leon Fresco of Holland & Knight, on a panel entitled Issues in International Wealth Planning and will examine factors bringing international families to the United States for trust and wealth planning as well as the vital importance of selecting the proper trust jurisdiction in the planning process.

If you are interested in attending this conference, you can click here to register and if you have any questions, please contact Bridgeford Trust via our contact page.

South Dakota Again Ranked as Top U.S. Dynasty Trust Jurisdiction

For the 6th consecutive year, South Dakota is again ranked as being the top Dynasty Trust state in the nation while Delaware, long considered a top tier trust jurisdiction, slips again in the rankings to the 8th position. A Dynasty Trust, not available in all states, is a powerful planning tool that essentially allows a trust to live in perpetuity (forever), therefore never subjecting the assets to federal estate taxation through a forced distribution. South Dakota was the first state in the nation to abolish the Rule Against Perpetuities in 1983, clearing the way for the creation of the first Dynasty Trust.

The rankings chart, an annual ranking of Dynasty Trust states from across the country published by Nevada attorney Steve Oshins, is an excellent resource for advisors and clients because of the methodical and objective approach to evaluating the factors that impact the viability of Dynasty Trust states, such as whether they have an asset protection statute and how effective it is in comparison to other states. In addition, the chart considers state taxation on trusts and whether the state has a decanting statute. The chart accentuates the vital importance of considering alternative trust jurisdictions in the wealth and trust planning process to ensure that clients are availing themselves of the most progressive trust laws in the country, particularly in the area of Dynasty Trust formation, which continues to be a very hot topic.

A very important factor to consider relative to whether a Dynasty Trust state is the best for clients, which is not considered in Steve Oshins’ chart, is privacy. States have different privacy provisions protecting information contained in a trust from becoming public. Most states have no privacy provisions and in Delaware, after 3 years, sealed trust information can become public. South Dakota is the only Dynasty Trust state that has a total seal on trust information forever, prompting Trust & Estates Magazine to observe, “Of the top tier trust jurisdictions, South Dakota has the best trust privacy laws.” Clearly, this is also an important factor to consider when determining where to place a trust in the wealth planning process. Click here for more information about South Dakota’s powerful privacy provisions.

Other important factors not considered in Steve Oshins’ chart are the availability of the Special Purpose Entity, as well as the newly created Community Property Trust and Family Advisor, powerful planning tools not available in other U.S. trust jurisdictions that deliver far more control over trust creation and administration to settlors of trusts, beneficiaries, and their advisors than ever before. Learn more about these very progressive and cutting edge trust laws offered by South Dakota by clicking here.

Steve Oshins’ chart can be viewed by clicking on the image below.

For more information regarding Dynasty Trusts, please contact Bridgeford Trust via our contact page.

Join Us! Bridgeford Trust to Host SDTA’s Fall Forum Kick-Off Reception

Bridgeford Trust is hosting a cocktail reception in advance of the South Dakota Trust Association’s Fall Forum next week and we would love to see you there!

As we highlighted in a previous post, this first annual Fall Forum is scheduled for October 26-27 at the Sheraton Sioux Falls & Convention Center and is presented by The South Dakota Trust Association, in coordination with the American Bankers Association. Bridgeford Trust is a sponsor of this forum and you can learn more about it and register by clicking here.

For those of you who are attending, we invite you to join us for a cocktail reception in advance of the Fall Forum on Wednesday, October 25th from 5:30pm – 7:30pm at The Country Club of Sioux Falls. Click on the image below for more details.

RSVP today to Melissa Roberson at mroberson@bridgefordtrust.com. We hope to see you there!

Bridgeford Trust to Sponsor the SDTA’s Fall Forum

Bridgeford Trust is excited to be sponsoring the South Dakota Trust Association’s first annual Fall Forum! The forum is scheduled for October 26-27 at the Sheraton Sioux Falls & Convention Center and is presented by The South Dakota Trust Association, in coordination with the American Bankers Association.

The forum’s program will examine various aspects of South Dakota planning, updates from the South Dakota Governor’s Trust Task Force, the international communities’ interest in South Dakota, and will include nationally recognized speakers.

We encourage you to consider attending this dynamic forum that offers attendees Continuing Education credits and includes a great opportunity to network with other professionals in the trust industry.

For more information on the program and to learn how to register, visit the forum website by clicking here.

Bridgeford Trust to Sponsor STEP Latin American Conference

Bridgeford Trust is excited to be sponsoring the STEP Latin American Conference 2017 taking place on September 28-29, 2017 in Cartagena, Colombia! This sold-out conference features leading edge speakers and a program designed to inform and engage wealth structuring and trust and estate practitioners.

David A. Warren, Co-Founder, President and CEO of Bridgeford Trust, will be attending the conference and if you are going to be there as well, we encourage you to visit Bridgeford Trust’s table!

STEP is a global professional association for advisors specifically specializing in family inheritance and succession planning in the international space. STEP works to improve public understanding of issues facing international families, promote education, and strongly encourage very high professional standards among their members and practitioners. To learn more about STEP, click here.

If you would like additional details about the event, visit the conference website at www.steplatamconference.com.