This blog post will provide 25 reasons why South Dakota trust law ranks #1 in America. A leader in anything creates a naturally occurring set of healthy and repeatable habits. Being in the mid-west, South Dakota prizes freedom and innovation. And here are the 25 reasons....
South Dakota Trust Jurisdiction Benefits
- State legislature consistently supports Domestic Asset Protection Trusts and related estate planning by continued amendments.
- State legislatures enacted amendments every year from 2005-2020.
- The only state with a Governor's appointed trust task force to keep trust laws current and relevant for maintaining South Dakota trust jurisdiction relevance.
South Dakota trust law timeline
- 1983 - first to repeal its Rule Against Perpetuities (i.e., trusts can last forever). Delaware decided it was important twelve years later - in 1995!
- 1997 – first trust protector statute.
- 2007 - first state-adopted Third Party Discretionary Trust statutes, South Dakota Codified Law 55-1-24 and South Dakota Codified Law 55-1-43:
- “Discretionary Support Statute” – discretionary interest is not a property interest or an entitlement.
- Alaska, Nevada, and Delaware have more limited versions of these statutes.
South Dakota asset protection and self-settled trusts
- Statutory protection for attorneys, trustees, and others involved in the creation and administration of South Dakota Domestic Asset Protection Trusts. South Dakota Codified Law 55-16-12.
- Consistently, for many years, either the #1 or #2 (i) asset protection jurisdiction (trust laws and charging order statutes) and (ii) Domestic Asset Protection Trusts statutes (source: Trust and Estate magazine, January 2020).
- The statute of limitations for creditor claims to fraudulent transfer is two years making South Dakota self-settled trust statutes a continual leader.
- South Dakota’s trust privacy seal is absolute and permanent. Delaware is three years.
- In South Dakota, anytime you go to court involving the trust (e.g., court-approved modification, Grantor legal problems, disgruntled beneficiary, etc.), which is bound to happen during the long life of a trust, all records and information dealing with the trust are sealed. Permanently. Forever. In South Dakota only. Court proceedings involve names, financial disclosures, descriptions, etc. Inquiring minds (i.e., tabloids, creditors, jealous in-laws, unhappy spouses, disinherited heirs) can start searching public records to eventually force disclosure of what was done and filed on the record for trusts. Inquiring minds would hit the frustrating wall of infinite height and depth every time this occurs for a South Dakota trust.
- In Delaware, not so much after three years. Petitioning the court to reseal trust records becomes a subjective decision of the court. Not objective. Delaware privacy laws leave many unanswered questions.
Read more about our comparison of the best trust law states.
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