Thursday, May 1, 2014
Creating a trust in South Dakota has brought quiet the buzz in the estate planning community. The initial appeal for creating a trust in South Dakota is the fact that the trust can last indefinitely without estate tax consequences. Additionally, there is income tax savings. So when is a South Dakota trust a good option? Matthew Donovan, a partner in the Snell & Wilmer's Private Client Services group, lists the following instances in which a South Dakota Trust should be considered:
- When families can put money in trust and allow it to grow without making distributions for a long time.
- When the beneficiaries live in states that will not tax trust distributions.
- When families live in states, like California, which limit the duration of trusts to about 120 years.
- When families live in states like Massachusetts that have a state estate tax on estates over one million dollars.
See Matthew K. Donovan, Does Everyone Need a South Dakota Trust?, Lexology, 2014.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.