Dynasty Trusts

South Dakota and Great Western Bank: The right combination for Dynasty Trusts

South Dakota continually ranks as one of the best trust jurisdictions in the country. Maximum flexibility in trust administration, unique trust law, and a favorable tax climate are just some of the reasons why.1 When choosing a South Dakota trustee, look to Great Western Bank. We’ve been here for more than 80 years and we offer a full menu of trust services at a competitive price.

Why South Dakota?

No Court Supervision

South Dakota law does not require that a court be involved in trust administration. Without court supervision, trust administration can be more efficient and less costly. If, however, court supervision is desired, South Dakota’s trust code provides the flexibility to have a trust supervised by a local court. 

Favorable State Tax Climate

South Dakota has a favorable state tax climate. If your trust is located in South Dakota, the trust will not pay South Dakota income tax, South Dakota estate or inheritance tax, South Dakota gift tax, South Dakota generation-skipping transfer tax, South Dakota dividends and interest tax, South Dakota LLC or LLP income tax, South Dakota ad valorem tax, South Dakota coupon tax, South Dakota personal property tax, South Dakota securities transfer tax, or South Dakota intangible properties tax. In addition, South Dakota’s insurance premium tax rates are some of the lowest in the country.

Flexible Decanting and Modification Statutes

South Dakota has favorable trust decanting and modification statutes. If you have an existing irrevocable trust governed by another state’s law, South Dakota allows you to, depending on the terms of the existing trust, modernize the trust and improve the trust’s governing law provisions and administrative provisions.

Perpetual Dynasty Trusts

South Dakota abolished its rule against perpetuities. A South Dakota dynasty trust, then, can benefit multiple generations in perpetuity by (1) minimizing gift tax, estate tax, and generation skipping transfer tax consequences and (2) protecting the trust assets from the creditors of the beneficiaries. If life insurance is used to fund the dynasty trust, South Dakota’s low premium tax provides additional savings to the trust.

Trust Protector

South Dakota allows the appointment of a trust protector. A trust protector can help assure the trustor of a dynasty trust that his or her wishes will be carried out in perpetuity. A trust protector, for instance, may amend the trust to achieve favorable tax status, to change the interest of beneficiaries, or to delegate trust asset investment responsibilities.

Directed or Delegate Trust

Choosing Great Western Bank to be the trustee for your dynasty trust can give you the security of knowing that your trust will be diligently administered for the benefit of multiple generations. Great Western Bank provides the expertise, objectivity, and ongoing support of a corporate fiduciary experienced in complex generational wealth transfer issues. 

One critical aspect of any trust is the proper investment and management of the trust assets to ensure that there is sufficient income and principal to provide for the needs of the trust’s beneficiaries. Great Western Bank offers a full range of investment options.

Again, South Dakota’s trust laws provide for maximum flexibility by allowing a trustor two options for the management of trust assets. The trustor can either:

A. Allow Great Western Bank to be responsible for the investment and management of the trust assets; or

B. Have Great Western Bank simply act as the administrator of the trust and nominate financial advisors to assist the trustee as to the proper investment and management of those assets. Administrative Trustee services include:

  • Bill Payment
  • Execution of Trust Distribution Instructions2
  • Engagement of Valuation Experts
  • Records Retention and Maintenance
  • Engagement of Tax Preparers or Other Accounting Professionals
  • Maintain Custody of Trust Assets Deposited in South Dakota
  • Maintain Custody in South Dakota Physical Evidence of Trust Assets

Great Western Bank’s administrative trustee services allow you to take advantage of South Dakota’s favorable trust statutes at a competitive price. You maintain your existing relationship with your financial advisors.

Self-Settled (Domestic Asset Protection)

South Dakota’s self-settled (domestic asset protection) trusts allow a trustor to maintain beneficial rights in a trust he or she creates while protecting the assets transferred to the trust from the trustor’s creditors. If properly structured, a South Dakota domestic asset protection trust may also provide estate tax savings. Great Western Bank is your trustee of choice when creating your domestic asset protection trust.

Put your Trust in South Dakota

South Dakota was one of the first states (1983) to allow a trust to last forever. A properly formed dynasty trust can remove the assets of the trust from the Federal transfer tax system, theoretically forever. 

In 1986 Governor Bill Janklow established the Governor’s Task Force on Trust Administration Review and Reform (Task Force). Composed of appointees from the banking industry and legal profession, the Task Force has proposed one to three bills annually to the Legislature with a 100% success rate. The Trust Task Force is critical to the growth of South Dakota’s trust business. Active attention to South Dakota’s trust statutes and regulatory environment by the Task Force and active marketing of South Dakota as a destination by many has resulted in the South Dakota being the number one situs in the nation.

Great Western Wealth Management offers our clients services of the highest quality, delivered with tact, sensitivity & impartiality. Our commitment to our clients is absolute.


1This summary of South Dakota law is provided by Great Western Bank for informational purposes only. Please consult your Great Western Bank trust professional to discuss your personal planning objectives.

2Administrative Trustee services do not include any power, authority, or discretion to direct any distribution from the trust.