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.

 

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.

 

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.

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 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.