The casual observer has probably encountered a South Dakota story without even knowing it. Such stories have been told in “Dances With Wolves” and “The Revenant,” the television series “Deadwood” and Laura Ingalls Wilder’s book, “Little House on the Prairie.”

The next great story involves the massive transfer of wealth between generations and the preservation of that wealth through South Dakota’s compelling modern trust law tools. The state’s trust services industry has evolved to meet the demands of this wealth transfer, delivering more planning options, protection, control and flexibility than ever before. 

How It Started

In 1983, South Dakota repealed its rule against perpetuities, clearing the way for the dynasty trust, a multigenerational estate-planning tool that avoids federal and death estate tax for assets held in trust forever. Because South Dakota also does not have a state income tax, the dynasty trust also avoids taxation on undistributed, retained income across generations. 

Simultaneously, the banking and trust industries worked together to propel South Dakota’s trust industry forward. In 1997, then-Gov. William J. Janklow created the Governor’s Task Force on Trust Administration and Reform, bringing together representatives from the trust industry and state government to make South Dakota’s trust laws the best in the nation. The task force’s effectiveness is demonstrated by South Dakota’s progressive trust laws and the number of trust companies located in South Dakota. With 86 public and private non-depository trust companies, South Dakota leads the nation. 

Taxation: None

South Dakota has no corporate, trust or personal income tax. State taxes on an inheritance or transfers at death are constitutionally prohibited. 


South Dakota has enacted legislation enabling grantors to limit beneficiaries’ rights to information. State law also protects trust documents in court proceedings by providing an automatic seal of court records in perpetuity. South Dakota’s powerful privacy provisions are more comprehensive than any other state and are one of many reasons why families and their advisors choose South Dakota. 

Other Trust Law Features

In addition to public trust companies, South Dakota is a leader in the chartering of private trust companies offering wealthy families the benefits of South Dakota trust law and in providing a regulated structure in which family wealth can be controlled. Private trust companies enable families to increase their involvement in managing wealth; limit personal liability of those individuals administering trusts; meet federal securities law exemptions; and manage taxes. 

The state has been at the forefront of trust reform, modification and decanting, allowing families to easily migrate older trusts from other states and foreign jurisdictions to modernize trust provisions.