South Dakota State Senators are advancing a proposal that protects trust officials from bad tax advice outside a company’s firm.
The change is part of an annual bill to update the state’s trust law, which is almost as routine during legislative session as lawmakers crafting the state budget.
The bill is drafted by the Governor’s Trust Task Force — a group comprised of trust industry officials, lawyers and administrators that meets multiple times a year. The meetings are closed to the public.
A trust is a legal agreement that allows someone determine how their money is handled after they die.
The bill says if a client has a tax person who is outside of a particular trust company, the trust administrator is protected from any liability if the tax advisor messes up.
“It’s allowing our trustees to be protected if they’re relying on folks outside of their organization to give them advice," said Jennifer Bunkers, chair of the Governor's Trust Task Force during a committee hearing. "So, it’s just clarifying the roles and where the risk and liability lies if that tax advice was erroneous.”
Since 1997, the task force has crafted the state’s trust law. That’s led South Dakota to become one of the premier trust jurisdictions in the world — it’s been called the “Bermuda of the Prairie.”
There’s currently $680 billion in assets held in trusts in South Dakota. State officials expect that number to grow significantly with the value of cryptocurrency rising.
The bill passed unanimously and is set for the consent calendar in the Senate, which is a bundle of bills considered noncontroversial that state lawmakers can vote on all at once.
It then heads to the House.
