Who Can Create a South Dakota Trust?
A common misconception that people have is that they can only create a trust to own assets in the state in which they reside. This may seem to be the case but a trust, just like an individual, can own property or assets outside of their respective jurisdiction. This allows individuals from different jurisdictions to take advantage of South Dakota’s unique trust laws as a part of their estate plan.
How Do I Create a South Dakota Trust?
In order for a trust to be subject to South Dakota’s unique trust laws, the trustee of the trust must be domiciled in South Dakota. Luckily South Dakota has a wide variety of trust companies that can serve as trustee for a wide range of trusts with various types of assets. Furthermore, using one of these trust companies as trustee, in combination with a properly drafted trust, can allow for greater creditor protection for the trust's underlying assets. An additional option would be to name an individual who resides in South Dakota as trustee, however this can cause other issues as trusts can be difficult to manage if a person has no experience with trust administration.
What about Real Estate?
Individuals often believe that although they can transfer assets like stocks and bonds to a South Dakota trust that real estate is different. This is a common misconception that often holds people back from seeking the added benefits of South Dakota’s unique trust laws. As a legal entity a trust can typically own real estate anywhere. The real property would simply need to be transferred through a properly executed deed granting ownership of the real property to the trust. This would allow the property to be owned by the trust and provide you with the various benefits of South Dakota trust law.
Considering which jurisdiction to choose when creating a trust is always important. South Dakota’s flexible trust laws can help serve your needs and efficiently achieve your estate planning goals. It is always important to work with qualified professionals before creating any trust to ensure that your estate plan is effective. Feel free to contact Kern Law Practice with any questions you may have in regards to creating a South Dakota Trust!