Trusts & Estates magazine once 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 four jurisdictions consistently for the past 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 2020?” 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 in the Trusts & Estates magazine article wherein the authors noted, “Of the top tier trust jurisdictions, South Dakota has the best trust privacy laws.” (Also, take note of footnote 49 in the Trusts & Estates Magazine article, where a post written by Bridgeford Trust was cited and quoted.)
- 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.)
- Is the most fiscally sound among all top tier trust jurisdictions.
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.