According to Edward McCaffery, a professor at the University of Southern California’s Gould School of Law, states like South Dakota are “creating laws that are conducive to a massive exploitation of a federal tax loophole.” He also stated, according to Bloomberg News that “We have a tax haven in our midst.”
Moguls are coveting a South Dakota address for their trust funds. The wealthy families don’t need to actually move to South Dakota, or deposit their money at a local bank, to take advantage of South Dakota’s tax-friendly trust laws.
Warning: Constant DOMAIN_JOBSEARCH_URL_HTTP already defined in /home/blogsites/jdjournal/www/wp-content/plugins/jobsearch/jobserach_constants.php on line 7
Americans are trying to find creative ways to reduce taxes legally. A dynasty trust is a trust designed to avoid or minimize estate taxes being applied to great family wealth with each transfer to subsequent generations. South Dakota Trust Co., is one of the biggest in the state. It is estimated that one-quarter of their business comes from special vehicles known as “dynasty trusts,” which are trusts designed to avoid the federal estate tax. Pierce H. McDowell III, is the president of South Dakota Trust Co., and according to his family history McDowell’s grandfather worked as a trust officer at the bank and was present in 1934 when Baby Face Nelson and his notorious gang robbed the local Security National Bank.It doesn’t take more than acquiring an address in Sioux Falls to take advantage of South Dakota’s tax haven.
Image Credit: www.bloomberg.com
