Special Purpose Entities

Families can establish special purpose unregulated entities in South Dakota―one of the few states that allow it―in order to enable people they rely on such as long-time trusted accountants, lawyers, family office staff and other professionals to serve as investment committee members, distribution committee members or trust protectors.

Benefits
  • Liability insurance coverage is much easier to obtain for directors, officers, board members and employees of these special purpose entities than for individuals serving as co-trustees or trust advisors.
  • Using a special purpose entity limits the type of disruption that can happen when individuals are no longer able to fulfill their responsibilities in cases of resignation/removal, death, disability or other circumstances. In most instances, the corporate entity serving as an investment or distribution advisor can offer legal continuity by easily replacing advisors/committee members in these circumstances.
  • Having independent advisors responsible for these functions eliminates estate tax inclusion concerns for family members who serve as co-trustees or advisors.

Descriptions of trusts are intended to be informational and are not specific recommendations. Contact a trust officer at Sterling Trustees for more detailed information on what would be best suited to your circumstances.

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Sterling Trustees is a South Dakota-chartered trust company, regulated by the South Dakota Department of Banking. South Dakota, at the forefront of creating progressive trust legislation, is one of the country’s leading trust jurisdictions. That means that our company is able to help you leverage the latest and most advanced trust law available. read more