The House Judiciary committee is passing along what supporters call clean-up language in state statute as it relates to trust companies in South Dakota.
House Bills 1028 and 1072 came from the annual Governor’s Task Force on Trust Administration Review and Reform. That task force first formed under the second Janklow administration.
Bret Afdahl is the director of the South Dakota Division of Banking. He says one of the bills fixes an oversight that requires certain trust companies have sufficient protection to back up their assets.
“The bill on the trust companies is pretty clean up in nature. There was a little clean up in how dividends are treated, whether the entity was an LLC or a corporation," Afdahl says. "We have a restriction in place that they can’t dividend out from their regulatory capital bucket. Right now that only applies to a trust company that’s organized as a corporation, and it really needs to apply to LLC’s as well. That’s really all that clarification was.”
Supporters say the other bill clarifies inconsistencies in trust law in the state. One section of the bill includes language for trusts set up for lawful, non-charitable purposes… like for the care of a designated animal.
There are 94 trust companies in South Dakota. Those companies manage $234 billion dollars. The state’s friendly attitude toward trusts and trust companies often ranks South Dakota as a top place for estate planning.