America’s Most Advisor-Friendly Trust Companies Showcase - Flipbook - Page 15
2026 ADVISOR-FRIENDLY TRUST COMPANIES
In 2025, South Dakota revised its
trust legislation through Senate Bill
69 to create a more comprehensive
governance model for international and
complex planning situations, adding
clarity for trustees in directed structures,
streamlining trust modifications without
court involvement, and introducing
new roles designed to protect
trustees from liability when following
external advisor directions. The state’s
Governor’s Task Force on Trust
Administration meets regularly to review
developments and ensure the legislative
framework stays ahead of emerging
needs. This ongoing institutional
commitment to modernization is itself a
differentiating feature.
One particularly powerful tool that
South Dakota offers and few other
states match is the community property
trust. Assets held in a South Dakota
community property trust can achieve a
100% step up in cost basis at the death
of the first spouse, compared to the
50% step-up available in common law
states, representing a significant longterm tax advantage for families with
appreciated assets. This is a planning
opportunity that receives far less
attention than it deserves.
South Dakota’s privacy protections
are among the most comprehensive
available. Trust records are sealed
indefinitely, and the state imposes
no statutory requirement to register
a trust or report on trust income for
state tax purposes. The distinction
between privacy and secrecy matters
here: South Dakota provides legitimate
confidentiality within a fully compliant
domestic legal framework, not the
opacity of an offshore structure.
DELAWARE: DEPTH OF
LAW AND INSTITUTIONAL
INFRASTRUCTURE
Delaware’s strength lies not in the
extremity of any single provision but
in the depth and sophistication of its
legal infrastructure. Delaware’s Trust Act
Committee, composed of leading trusts
and estates attorneys, meets annually
to review case law, identify practical
problems that have arisen for clients,
and draft statutory updates. The result
is a trust code that evolves continuously
in response to real-world experience
rather than theoretical planning
preferences.
Delaware’s Trust Act 2025, signed into
law by Governor Meyer on August 21,
2025, updated provisions around noncharitable purpose trusts, beneficiary
rights, trustee resignation procedures,
and marital property rules. Among
the most significant changes was
the formalization of the “enforcer”
role in purpose trusts, giving families
using these structures for business
stewardship, art collections, or other
specific purposes a clearer governance
framework with defined fiduciary
responsibilities.
Purpose trusts in particular have grown
in prominence as a planning tool.
Delaware has been a leader in this area,
and the 2025 updates reflect growing
client demand. A purpose trust holds
assets in service of a defined goal
rather than for the benefit of individual
beneficiaries, and it can be structured
to last indefinitely. The use of purpose
trusts to maintain stewardship of
private businesses, family compounds,
or collections of significant personal
property is expanding, and Delaware’s
updated statute makes these structures
more accessible and more clearly
governed than ever before.
15
How important are
trust services and estate
planning to your practice?
5%
26%
46%
23%
Essential for long-term account retention
Essential for retention and prospecting
Handy but not essential
Don’t use / don’t plan to use
Delaware’s Court of Chancery remains
a significant asset. When trust disputes
reach litigation, the quality and
sophistication of the judicial system
matters enormously, and Delaware’s
court has a centuries-deep body of
equitable jurisprudence to draw on. For
families with complex structures who
want the confidence of knowing that
any dispute will be resolved by a court
that genuinely understands what they
built, Delaware’s legal infrastructure is
difficult to match.
NEVADA: THE ASSET
PROTECTION STANDARD
Nevada’s primary distinction is the
strength of its creditor protection
framework. Nevada requires creditors
to prove fraudulent transfer by clear
and convincing evidence rather than
the lower preponderance standard
used in most states, and proof of fraud
against one creditor does not invalidate
transfers to other creditors, making
successful challenges significantly more
difficult and expensive to pursue.
