Where to Establish a Private Family Trust Company?
There is a reason that so many of the Forbes 400 and other wealthy billionaire and centi-millionaire families have chosen to situs their PFTCs and trusts in South Dakota. Many families assume all of the PFTC and Dynasty Trust states are the same, but when there are actually dramatic differences that families should be aware of and research. Many of these points are discussed in this website.
South Dakota has been a favorable boutique trust state for the wealthy since 1983. The legislature has proactively emphasized modern trust laws that answer the needs of wealthy families better and longer than any other state. The current PFTC laws and experience combined with the legislative awareness and responsiveness are just a few of the reasons South Dakota is the most favorable lightly regulated PFTC state in the U.S. Some of the other compelling reasons in addition to the unique South Dakota trust and tax statutes are listed below.
1.
Most responsive state legislature for lightly regulated family trust companies.
2. Application process:
Short time frame of 2-6 months ($5,000 application fee) Application is private Public notice (all states have this) $1,000,000 surety bond At least 3 directors (1 from South Dakota), no more than 12 total SD allows for interstate administration in family's home state
3. Low capital requirement:
4. Friendly regulatory authority:
SD examination every 36 months (family PTCs) Onsite Policy and Procedures Manual, LLC, and other organizational documents, Board meeting minutes, ect. Most other books and records available electronically SDTC assists with PFTC audits and generally charges hourly
5. Board Meetings:
Quarterly (SD member present in SD as corporate agent - SDTC serves this role) Family may or may not be in SD for meetings - telephonic usually OK; the family usually, but is not generally required to, attend, choose one meeting a year in SD and rotating family Board members for annual SD trip (usually summer)
6. Physical office requirement/corporate agent:
South Dakota Trust Company LLC serves as SD Board member, attends quarterly Board meetings, provides office space, collects mail and forwards, answers phone - costs average approximately $2,500-$3,000 per month.
7. Trust administration: SDTC's experience:
South Dakota Trust Company can act as agent and provide administration for South Dakota law trusts or other state law trusts Trust administration can also be done in another state, but without the benefit of SD law and taxes
8.
Regulated vs. unregulated PFTCs:
Lightly Regulated PTC can provide better liability protection than unregulated trusts More difficult to pierce the corporate veil Regulated PTCs promote the integrity of tax-sensitive distributions and estate planning
9. Investment advisor exemption and common trust funds with PFTC
10. South Dakota is a family money lending company state, utilizing top lending laws in the U.S.
A South Dakota money lending company is both inexpensive and easy to establish with SDTC as an agent and acts as a nice complement to a Private Family Trust Company utilizing top lending laws in the U.S
11. South Dakota is one of the top jurisdictions for captive insurance companies, which can provide a cost-effective way to deal with a family's property and casualty insurances as well as provide numerous tax benefits |