- What are the key advantages of your jurisdiction in terms of privacy & asset protection for a Chinese HNWI or Family (etc.) looking to succeed their assets to the next generation?
Depends on states but South Dakota offers zero state income tax, confidentiality and no FATCA reporting.
- In terms of cost, how is the cost of a setting up a trust/foundation in your jurisdiction compare to other jurisdictions? If it’s more expensive, what is the additional value that a client receives for this?
South Dakota is very reasonable. Trust establishment and renewal fees are flat $3,500 USD per year and legal fees are $25,000.00 USD to establish and fund
- Are trusts or foundations in your jurisdiction the preferred structure for clients? Why do you believe that is? Do you expect any changes in that preference in the future?
USA is a trust jurisdiction. We are a common law jurisdiction and we don’t recognize private foundations. Foreign private foundations are either classified as foreign trusts or foreign corporations depending on terms in operative agreement.
- We understand that some jurisdictions focus on asset protection, while others focus on asset succession products. Does your jurisdiction have a better solution for asset protection or asset succession?
Top states in US are as follows: SD, DE, NV and Alaska. We recommend SD (South Dakota) for following reasons:
- Decanting—the ability to create a new trust which may have different terms and structure from existing trust but changes are needed.
- No state income taxes
- Access to courts very easy
- Privacy
- Asset protection delineated in SD codified laws
- SD law allows for Directed Trusts, Delegated Trusts, Private Family Trust Administration
- Settlor can still retain powers after trust is established and funded
- State trust task force which works with industry professionals to continuously update and improve trust laws
- Limited notice requirements
- Are there any recent developments in trust/foundation law in your jurisdiction that investors should be aware of?
2015 SD Trust Legislative Update:
a. Improved drafting flexibility,
b. Arbitration Options,
c. Transparency,
d. Ability to terminate uneconomical trusts,
e. New law that LLCs can be settlors.
Contributed by: Josh N. Bennett ESQ, P.A.
