Purpose Trusts
Trusts aren’t always created for beneficiaries.
Unlike traditional trusts, the South Dakota Purpose Trust—considered the most flexible in the nation—is a type of trust which has no beneficiaries. Instead, a Purpose Trust is established to hold and protect assets for a specific purpose rather than for the benefit of beneficiaries.
Similar to a Charitable Remainder Trust, which exists to support a particular charity or charitable intent, a Purpose Trust can be created to support or maintain a specific purpose in perpetuity uniquely under South Dakota law. Common examples of Purpose Trusts include business interests, private trust companies (PTCs), royalties, real estate, artwork, cryptocurrency, pet care, grave sites, and cryonics.
Purpose Trusts
Trust Structure
Direction, Control & Flexibility
Settlors of Purpose Trusts and their advisors can harness the power of South Dakota’s trust laws—including Dynasty Trusts, privacy protections, and asset protection—while maintaining significant direction and control through the use of a Directed Trust structure, the appointment of a Trust Protector, and the designation of an Enforcer (which may be the same individual).
As long as the Purpose Trust is established for a valid purpose that does not violate public policy, it can exist forever or be converted to a beneficiary trust at the direction of the Trust Protector if the original purpose comes to an end.
Questions About Purpose Trusts?
If you would like to learn more about Purpose Trusts or explore other planning opportunities available under South Dakota trust law, reach out to us through our contact form or call us at (605) 224-9189.
