The South Dakota Family Advisor is another modern trust law tool that delivers far more control to settlors of trusts, beneficiaries, and their advisors than ever before when used in conjunction with a directed trust. South Dakota is the only state in the nation to have enacted progressive new legislation, statutorily creating the South Dakota Family Advisor.
The Family Advisor role is similar to the Trust Protector and is referred to as “Trust Protector Light” because of its non-fiduciary status and limited powers. It is an excellent option for settlors of trusts and beneficiaries who may want family advisors – such as attorneys, CPAs, or investment advisors – to have the power to modify, control, and participate in many important aspects of trust administration without elevating the position to that of a fiduciary, which carries with it heightened liability that may deter advisors from serving.
The powers that may be granted to the Family Advisor are:
(1) Remove and appoint a trustee, a fiduciary provided for in the governing trust instrument, trust advisor, investment committee member, or distribution committee member;
(2) Appoint a successor trust protector or a successor family advisor;
(3) Advise the trustee on matters concerning any beneficiary; receive trust accountings, investment reports, and other information from the trustee or to which a beneficiary is entitled; attend meetings whether in person or by any other means with the trustee, investment trust advisors, distribution trust advisors, or other advisors whether in person or by any means, electronic or otherwise; and to consult with a fiduciary regarding both fiduciary and non-fiduciary matters or actions, all without any power or discretion to take any action as a fiduciary; or
(4) Provide direction regarding notification of qualified beneficiaries pursuant to § 55-2-13.
We invite you to watch the video below for a discussion around the Family Advisor role and how it can be incorporated into the trust planning process.
The Family Advisor, only available under South Dakota law, is yet another affirmation of South Dakota’s status as the most progressive trust jurisdiction in the nation.
For more information about how Family Advisors can be incorporated into the trust planning process, please contact us via our contact page or by calling (605) 224-9189.
