The recent press release regarding the “Pandora Papers” at the end of 2021 placed the South Dakota trust industry in the spotlight. Though some press painted a negative picture, with broad brush strokes of fraud and criminal activity, a real look behind the scenes captures a very different landscape. Instead, the South Dakota trust industry is a well-regulated vault, accepting those family legacies that deserve the thoughtful protection of the state’s laws. So, why are South Dakota’s laws so protective of the family legacy?
South Dakota offers numerous advantages to its resident trusts. A few of the big ones include:
1) Dynasty Trust. In many jurisdictions, families setting up a trust must ensure full distribution of trust assets within a specified number of years, often restricting distributions from occurring more than 2-3 generations later. South Dakota has eliminated the so-called “rule against perpetuities” so that future generations can continue to benefit from the family legacy over an unlimited period of time.
