Perpetual Trusts

A key reason to establish a South Dakota trust is the benefit of having a trust with a very long or unlimited duration. South Dakota was the first state to abolish the “rule against perpetuities” and one of the few states where perpetual trusts are recognized as truly perpetual by the IRS.

There are a number of compelling reasons to establish a perpetual trust, but the most important may be deferring taxes (estate, gift and other taxes). A comparison of the difference in total appreciation of assets under a perpetual trust versus the appreciation of assets that have distributed out of a trust after being subject to taxes can be substantial.  Perpetual trusts may be used to provide funds over an extended period for:

▪   family medical costs
▪   family education
▪   disability care
▪   financial security
▪   charitible donations
▪   encouragement and reward of grantor desired behaviors
▪   other long-term support needs
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