A tax time opportunity that you, as an attorney, must explore for your clients

“…It’s the most wonderful time of the year…” Actually, no it is far from it.

Yes, tax time has just passed us. And if you represent clients with family trusts, tax season means filing returns, paying accountants, and cutting checks to the IRS as well as departments of revenue for many states around the country.

What if — in addition to cutting out a state tax return — you could also increase the trust’s return on investment?

This is not only possible, it’s somewhat easy–by situsing the trust in South Dakota–one of the few states in the Union with no state income tax or capital gains tax.

Imagine a trust sitused in California that creates $300,000 ordinary income on an annual basis. In California, that trust will pay roughly $40,000 in state income taxes.That same trust in South Dakota pays $0 in state income taxes which allows that $40,000 to be added to the trust principal.

When you add the compounding effect of no state tax with South Dakota’s no rule against perpetuities it starts to have a material effect on the growth of the trust corpus.

See for yourself.
Click on our state tax calculator and see the potential
savings on your client’s trust.

This is an opportunity to improve outcomes for your client. By recommending a change of situs to your client you would be recommending a jurisdiction that will protect and grow the assets of the trust for the entire term.

Sterling Trustees specializes in helping attorneys and their clients through this process–with an approach that is unbiased and trusted by our clientele.

Please contact us to discuss this potential for one or more of your current clients. We’ll share how we’ve helped attorneys carefully broach this subject with their clients and arrive at a successful outcome for all. Schedule an appointment using the Calendly link below, or call 605-593-8950.