SDCL § 43-5-8
Perpetual Dynasty Trusts
Abolition of the Rule Against Perpetuities
"The rule against perpetuities does not apply to any interest in property held in trust if the trustee has the power to sell the trust assets."
Legislative Significance: Enacted in 1983, South Dakota became the first state in the nation to completely eliminate the common-law Rule Against Perpetuities for personal property held in trust. A South Dakota dynasty trust can endure in perpetuity across unlimited generations without triggering mandatory termination or intermediate federal generation-skipping transfer (GST) tax realization.
Key Case Law: In re Estate of Brown; Commissioner v. Estate of Bosch (confirming state property law dictates federal tax consequences).
SDCL § 55-16
Domestic Asset Protection
Qualified Dispositions in Trust Act (DAPT)
"A creditor may not bring an action to attach property transferred in a qualified disposition unless the action is brought within two years after the transfer."
Legislative Significance: South Dakota features the shortest statute of limitations for future creditor challenges in the United States (2 years vs. 4 years in Delaware, Nevada, and Alaska). Settlors may retain discretionary beneficial rights to income and principal while shielding capital from future tort, divorce, and creditor claims.
Key Case Law: In re Cleopatra Cameron Gift Trust, 2019 S.D. 35 (affirming absolute spendthrift shield against out-of-state judgments).
SDCL § 55-1B
Directed Trust Architecture
Directed Trusts & Excluded Fiduciary Liability
"An excluded fiduciary is not liable, either individually or as a fiduciary, for any loss that results from compliance with any direction of an advisor."
Legislative Significance: By statutorily decoupling investment authority, distribution discretion, and administrative custody, families can retain total autonomy over operating businesses, private equity, and concentrated securities through an appointed Investment Advisor, while utilizing an administrative South Dakota trust company solely for situs and custody.
Key Case Law: Rollins v. Rollins (reaffirming fiduciary role segregation).
SDCL § 51A-6A
Private Trust Companies (PTCs)
Chartered & Non-Chartered Private Trust Companies
Legislative Significance: Provides single-family and multi-family offices with a streamlined regulatory framework to charter their own private trust company with minimum capital requirements of $200k-$500k, granting family boards full control over generational succession, governance, and private trust administration without public fiduciary exposure.