South Dakota is widely considered one of the top States in the U.S for private wealth structuring, specifically for Trusts.
In 2025, South Dakota revised its trust legislation to create a modern framework that has enhanced its flexibility to meet the evolving needs of High-Net-Worth clients with international planning, including cross-border families, complex investment/asset structures, or governance issues.
South Dakota’s legal environment offers strong protections and generational continuity, making it an ideal choice for family planning. Complimented by the absence of state tax, South Dakota is also widely regarded for corporate structuring, finance and escrow transactions, and boasts strong protection for contracts and privacy.
South Dakota recently passed a major legislative update to the Senate Bill 69 to create a more comprehensive governance model, which became effective in July 2025.
The aim was to provide regulatory guidance and formal distinctions on key changes, clarity for trustees, and to introduce new roles.
Creation of a “Tax Trust Advisor” role
A tax trust advisor role can direct a trustee on tax matters, such as filings, elections and cross-border issues. This statutory role gives clarity and protection for trustees.
Liability protection and clarity for trustees relying on advisors
The update outlines that a trustee who relies on the directions of a properly appointed tax trust advisor (or other advisors) is protected from liability for the tax decisions directed by that advisor.
Clarification and formal distinction between decanting and modification of trusts
The SB 69 bill adds language specifically on decanting, where trust assets are appointed into a new trust by the trustee’s discretionary power, and tidied up the phrase “written agreement by all beneficiaries” to “written consent by all beneficiaries”, to add clarity to the process.
Regulatory / guidance updates accompanying statutory changes
The South Dakota Division of Banking issued guidance memos to emphasise that the trust environment is being actively modernised from a regulatory perspective as well.
Apply the virtual representation statute explicitly to trust modifications and protect the material purpose of the trust.
The update in the SB 69 Bill defines that the virtual representation statute applies to trust modifications under § 55-3-24, which means a representative may bind certain beneficiaries in modification circumstances, as allowed under virtual representation rules.
A more comprehensive governance model
A settlor can tailor oversight across investment, distribution and tax domains, which can be useful for international trusts and multi-asset portfolios.
Enhanced flexibility
The new distinctions streamline bureaucracy and enable trusts to be updated without court involvement, which is important for family matters, law updates and investments.
Stronger trustee protection and clarity
Following the directions of a tax advisor can shield a trustee from liability and encourage trustee participation. This is helpful for trustees in directed structures, who may be concerned about liability when following external advisors.
Preservation of settlor’s intent
The law balances flexibility with fidelity to the original trust purpose, with virtual representation rules explicitly for trust modifications.
As one of the most business-friendly states in the USA, South Dakota has a 0% corporate tax rate, ideal for larger companies. Its investor-friendly characteristics also provide many other advantages for corporate structures, including 0% personal income tax, a flexible range of structures and low regulation.
A South Dakota limited liability company provides high privacy and protection, making it suitable for SMEs and real estate. Its asset holding entities also provide efficient, discreet wealth and asset control, ideal for investment and intellectual property management.
No (or minimal) state tax exposure
South Dakota has no state income tax on individuals and no tax on capital gains, dividends, interest, etc., when the trust is properly structured.
Dynasty / perpetual trust capability
An individual can establish a trust in South Dakota for generations due to the law, which allows for trusts to last “in perpetuity” (or essentially unlimited duration). This makes South Dakota specifically attractive for estate planning, over many other states which enforce a “rule against perpetuities”.
Robust asset-protection features
Assets inside the trust may have stronger protection from creditors or claims than in many other jurisdictions due to South Dakota’s favourable laws for asset protection. These include strong statutes, discretionary trusts, short look-back periods for self-settled trusts and spendthrift provisions,
Privacy/confidentiality
For individuals who value confidentiality, whether for business or personal reasons, South Dakota enables “quiet trusts” to exist in its laws. This means that beneficiaries might not be immediately notified, and trusts may not have to become public record in many cases.
Flexibility in administration & modern trust features
South Dakota’s directed trusts enable decisions, such as investment, administrator and advisor roles, to be split.
South Dakota permits non-resident settlors, meaning you don’t have to live in South Dakota to establish a trust there. This is specifically attractive for individuals in states with high taxes.
South Dakota allows Trust decanting, which enables an existing trust to be decanted into another trust without court intervention.
Well-established trust jurisdiction
The trustee service infrastructure and the jurisprudence around trusts are continuously being improved to create a modern and flexible framework, which has developed its reputation over the years.
Many states still have state income tax (on trusts or beneficiaries) or capital gains tax, which reduces the benefit of having the trust domiciled there.
Many states restrict trust duration via RAP or fixed maximums (90/100/360 years). South Dakota’s essentially unlimited duration is a differentiator.
The strength of asset-protection regimes varies widely; South Dakota is near the top in terms of creditor protection, especially for discretionary and dynasty trusts.
The administrative infrastructure and jurisprudence around trusts are more developed in and are ranked superior compared to other states in “dynasty trust” rankings.
Some states require more disclosure or have more public access to trust records than South Dakota does.
• Ideal for HNW individuals who want to preserve wealth for multiple generations and minimise future estate/generation-skipping tax exposure.
• Individuals in states with high state taxes want to use a trust to reduce state tax burdens.
• Individuals dealing with specific personal circumstances such as lawsuits, creditor claims, business risk or divorce and are looking for strong asset-protection features.
• Individuals who want to minimise public disclosure or exposure of trust documents and prioritise privacy and discretion.
• Individuals with specific business interests or international exposure require a flexible structure.
• Individuals with complex family matters, such as blended families, are seeking certain types of trust structures.
We work closely with High-Net-Worth clients to support their business or personal goals with tailored private wealth services. As a global corporate service provider, we have a range of locations, including South Dakota, that offer a stable and secure landscape to structure private wealth and assets.
We provide bespoke consultancy and a range of services, including; -
• Provision of professional, independent or corporate Trustees
• Formation, registration, transfer or termination of Trusts on your behalf
• Assurance of adherence to the investment objectives
• Provision of bespoke solution to regulatory constraints
• Maintenance of the Trust’s records and preparation and execution of Trustee resolutions
• Management of Secretarial and governance aspects relating to your Trust
• Signing and execution of any required statutory documentation
• Arrangement and facilitation of Trustee meetings
Speak with our U.S leader, Alex Gardner, to learn more about South Dakota and how to establish a trust.
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