HomeFAQ'sWhy is South Dakota so popular for Trusts?

Why is South Dakota so popular for Trusts?

There are several reasons why someone might create a trust in South Dakota. Some common reasons include:

  • To protect assets from creditors or lawsuits
  • To manage assets for the benefit of a minor or other individual who is unable to do so themselves
  • To reduce estate taxes and avoid probate
  • To provide for the smooth and efficient transfer of assets to beneficiaries

South Dakota is a popular state for trust creation because it has favorable trust laws, including a high exemption from estate taxes and a relatively low level of state income tax. 

Additionally, South Dakota allows for the creation of anonymous trusts, which can provide a high degree of privacy and protection for the trust’s assets.

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What is a Trust?

A Living Trust is a financial tool that lets you plan, organize, and protect your life. It’s a personal entity that allows you to add assets and plan out your inheritance. Eliminating legal battles, cost, and time spent by your loved ones. 

Think of it like a personal LLC that you put everything you own in. Except it doesn’t protect you from liability like an LLC does, it protects you from probate and conservatorship. 

Probate is the complicated court process (12-18 months) where a judge decides what happens to your assets after you die, become incapacitated, or are “deemed” incapable. Creating a living trust allows your assets to completely circumvent probate and immediately transfer to your loved ones. 

In addition to being able to name heirs (your beneficiaries), a Trust also allows you to assign someone to manage it (your successor trustee). Instead of going through probate, your Successor Trustee takes control of the Trust, handles your affairs, and distributes your assets according to your instructions. The person you select as Successor Trustee should be your most trusted person. Like a best friend or closest family member.

At Dynasty, we believe everyone should have a Living Trust. If you have children, assets, or plan to acquire assets in the future, you should create a Trust. That way when you buy your next home, open a bank or brokerage account, get startup shares, etc. – you can immediately title them in your trust.