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.

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.

According to an annual survey conducted by the U.S. Chamber of Commerce’s Institute for Legal Reform (ILR), South Dakota was deemed the best legal climate for business. Delaware, having held the top spot for several years fell to 11th in this year’s survey. The rankings are based on questions about impartiality and competence of judges, quality of appellate review, and treatment of class action lawsuits, among other things. Lisa Rickard, President of the ILR, said in an interview that “Delaware had been resting on its reputation while other states adopted changes and passed it by.” Click here to view the full survey.

The same appears to be true relative to the trust industry, as Delaware has been surpassed as the best U.S. trust jurisdiction by several states in recent surveys, particularly by South Dakota. An objective state-by-state comparison chart of modern trust laws such as privacy, dynasty trust provisions, and decanting shows that South Dakota is clearly the superior trust jurisdiction. Additionally, in the January 2017 issue of Trusts & Estates Magazine, authors Mark Merric and Daniel G. Worthington closely and objectively examine domestic asset protection trust statutes and concluded that South Dakota is a top tier domestic asset protection trust jurisdiction, while Delaware is second tier. Click here for the full article. While Delaware has historically been considered one of the best states for business climate and trust situs, other more proactive and progressive states have surpassed it in both areas, again accentuating the vital importance of proper jurisdiction for both businesses and wealthy families in need of sophisticated planning solutions.

For more information about the South Dakota advantage, please contact Bridgeford Trust via our contact page.