Special Purpose Entity
The Special Purpose Entity is a powerful planning tool because it places a liability umbrella over the individuals filling the roles within the directed trust structure (investment committee, and/or distribution committee members), as well as the trust protector; therefore protecting them from personal claims connected to their actions in this capacity.
The Special Purpose Entity concept is also used to destroy nexus between in-state trust protectors, investment committee members, and/or distribution committee members, therefore maintaining the jurisdictional integrity of a resident trust with situs in a progressive trust jurisdiction like South Dakota.
South Dakota is the only state with a Special Purpose Entity statute. The sole legal purpose, under South Dakota law, of the Special Purpose Entity is to direct an administrative trustee, such as Bridgeford Trust, relative to trust investments, distributions, and trust protector functions within the directed trust framework.
The Special Purpose Entity is an important planning tool as it supports and encourages the benefits associated with selecting progressive jurisdictions for trust situs, such as South Dakota, in the wealth and trust planning process.
For more information about Special Purpose Entities, please contact Bridgeford Trust via our contact page.