Delegated Trustee

• South Dakota has some of the better “delegated” trust statutes, which allows a trustee to delegate certain responsibilities to other professionals and/or co-trustees.

• The trustee of a “delegated” trust is generally allowed to delegate its investment responsibility to one or more qualified investment managers consultants and/or advisors, pursuant to the trust document and/or outside agreement.  The trustee generally has investment discretion under the terms of the trust instrument, which in some cases can also be delegated to a co-trustee.  Alternatively, delegation can generally be made directly to one or more investment professionals.  The “directed” trust, on the other hand, vests control for the investing with someone else i.e. the investment committee.

• All “delegated” trusts are generally invested pursuant to the provisions of the trust document as well as an agreed upon Investment Policy Statement with the trustees.

• “Delegated” trusts are generally existing irrevocable non-South Dakota Trusts (i.e. testamentary and/or intervivos), which change situs from one state to South Dakota for the state income tax savings, but generally maintain their state law provision.

• A trustee may desire exoneration language (within the trust document and/or by separate agreement).

• Delegated fees are reasonable, however slightly higher than “directed” trustee fees due to the slightly increased risk incurred.

• SDTC has both the administrative expertise and technology to accommodate most types of “delegated” trusts.

• Additionally, South Dakota has a great reformation statute to reform an existing delegated trust to a directed trust, in most cases.

If you have any questions or would like any additional information regarding SDTC's Trust Services, please contact us .