Title 55, FIDUCIARIES AND TRUSTS
25 chapters · 550 sections in this title.
SDCL § 55-1-1 Purposes for which trust may be created
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Except as otherwise prescribed by chapters 43-4 and 43-25 relating to transfers, a trust may be created for any purpose for which a contract may lawfully be made. Source: CivC 1877, § 1293; CL 1887, § 3916; RCivC 1903, § 1612; RC 1919, § 1190; SDC 1939 § 59.0104; SL 2017, ch 204 …
SDCL § 55-1-10 Transfer of real property to one for money paid by another--Trust presumed
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When a transfer of real property is made to one person and the consideration therefor is paid by or for another, a trust is presumed to result in favor of the person by or for whom such payment is made. Source: SDC 1939, § 59.0102 (4).
SDCL § 55-1-11 Implied trust--Declaration by court of equity
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The enumeration in §§ 55-1-7 to 55-1-10 , inclusive, of cases wherein an implied trust arises does not exclude or prevent the arising of an implied trust in other cases nor prevent a court of equity from establishing and declaring an implied, resulting, or constructive trust in o…
SDCL § 55-1-12 Trustor, trustee, beneficiary, power of appointment, and person defined
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The person whose confidence creates a trust is called the trustor; the person in whom the confidence is reposed is called the trustee; and the person for whose benefit the trust is created is called the beneficiary. As used in this title, except as specifically provided in chapte…
SDCL § 55-1-13 Voluntary trustee--Assumption of relationship
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Everyone who voluntarily assumes a relation of personal confidence with another is deemed a trustee within the meaning of this chapter and chapter 55-2 not only as to the person who reposes such confidence, but also as to all persons of whose affairs he thus acquires information …
SDCL § 55-1-14 Interest in existing trust--Transfer by operation of law or written instrument
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An interest in an existing trust can be transferred only by operation of law or by a written instrument subscribed by the person making the transfer or by his agent. Source: SDC 1939, § 59.0118.
SDCL § 55-1-15 Certain trusts not terminated upon trustor's death
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A trust which provides for one or more successor beneficiaries upon the death of the trustor is not invalid, merged or terminated if: (1) There is a trustor who is the sole trustee and the sole beneficiary during the trustor's lifetime; or (2) There are two or more trustors, one …
SDCL § 55-1-2 Trusts classified
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A trust is either express or implied. Source: SDC 1939, § 59.0101.
SDCL § 55-1-20 Trusts for noncharitable purposes
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Subdivisions 55-1-4(2) and 55-1-5(2) notwithstanding, a purpose trust may be performed pursuant to this section and §§ 55-1-21 to 55-1-22.6 , inclusive, if the trust is for a lawful noncharitable purpose or purposes. Any property may form a part or all of the trust estate, includ…
SDCL § 55-1-21 Trust for care of animal, care of other property, or other lawful noncharitable purpose
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The following purpose trusts are valid: (1) A trust for the care of a designated animal or animals; (2) A trust for the care, maintenance, promotion, continuation, conservation, upkeep, protection, furtherance, or preservation of any other property; and (3) A trust for any other …
SDCL § 55-1-21.1 Termination of trust for care of animal
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Except as otherwise provided in the governing instrument, a trust described in subdivision 55-1-21(1) terminates when no living animal is covered by the trust. Source: SL 2018, ch 275 , § 4.
SDCL § 55-1-21.10 Trustee may not use principal and income other than for trust's purposes
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Except as expressly provided otherwise in the trust instrument, no portion of the principal or income may be converted to the use of the trustee or to any use other than for the trust's purposes or the benefit of a covered animal. Source: SL 2018, ch 275 , § 13.
SDCL § 55-1-21.11 Co-enforcer appointment--Powers
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Unless specifically restricted by the governing instrument, an enforcer may appoint an individual or a corporate fiduciary as a co-enforcer. The appointed co-enforcer may serve only as long as the appointing enforcer serves, or as long as the last to serve if more than one enforc…
SDCL § 55-1-21.2 Judicial reduction of property transferred to trustee if trust corpus exceeds amount required for intended purposes
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A court may reasonably reduce the amount of the property transferred to the trustee of a purpose trust if the court determines that the trust corpus substantially exceeds the amount required for the intended purposes. The court should consider allowing the trust to be administere…
SDCL § 55-1-21.3 Court order where fulfillment of purposes are impossible, inexpedient, or unlawful
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If the court finds that the fulfillment of the purposes are or have become impossible, inexpedient, or unlawful, the court shall make an order directing that the trust be administered in such manner as, in the judgment of the court, will, as nearly as can be, accomplish the gener…
SDCL § 55-1-21.4 Enforcement of purpose of trust by enforcer
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The purposes of a purpose trust shall be enforced by an enforcer designated in the governing instrument. An enforcer may demand reasonable information related to the administration of the trust from the trustee, including a periodic accounting. If no enforcer or successor enforce…
SDCL § 55-1-21.5 Removal of enforcer
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A trustee may petition the court for the removal of an enforcer. An enforcer may be removed if the court finds: (1) The enforcer committed a serious breach of the enforcer's duty, or is unfit or unwilling to serve; (2) A significant and unjustified lack of cooperation or hostilit…
SDCL § 55-1-21.6 Discretion of trustee of purpose trust
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Except as otherwise provided in the governing instrument, a trustee of a purpose trust is vested with full discretion in: (1) Interpreting the purposes of the trust consistent with the terms of the governing instrument; and (2) Applying, distributing, or expending principal and i…
SDCL § 55-1-21.7 Judicial designation of trustee--Order to carry out intent of trustor and purpose of trust
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If no trustee is designated or no designated trustee is willing or able to serve, a court shall name a trustee. A court may order the transfer of the property to another trustee if required to ensure that the intended purposes are carried out or if no successor trustee is designa…
SDCL § 55-1-21.8 Distribution of property upon termination of purpose of trust
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Upon termination of a purpose trust, the trustee shall distribute any remaining trust property as directed in the governing instrument. Only in the event that the governing instrument is silent shall the trustee, upon termination of a purpose trust, distribute any remaining trust…
SDCL § 55-1-21.9 Filings, reports, accounting, separation of funds, appointment, and registration of purpose trust not required--Exceptions
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Except as may be demanded by an enforcer under § 55-1-21.4 , ordered by the court or required by the governing instrument, no filings, reports, periodic accounting, separate maintenance of funds, appointment, or registration of a purpose trust are required. Source: SL 2018, ch 27…
SDCL § 55-1-22 Hybrid purpose trusts valid
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A hybrid purpose trust which meets the description of a purpose trust in §§ 55-1-20 to 55-1-21.10 , inclusive, also includes one or more beneficiaries is valid and may be performed. Source: SL 2006, ch 247 , § 3; SL 2018, ch 275 , § 14.
SDCL § 55-1-22.1 Separate shares for beneficiaries and purposes to be maintained in hybrid purpose trust
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In a hybrid purpose trust when the interests of the beneficiaries and purposes are concurrent, the trustee shall maintain not less than two separate shares, one for the beneficiaries; and a second for the purposes, and the trustee may be liable to the beneficiaries for the actual…
SDCL § 55-1-22.2 Beneficiaries' share of a hybrid purpose trust
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The beneficiaries' share of a hybrid purpose trust is governed by §§ 43-5-8 and 43-6-7 . Source: SL 2018, ch 275 , § 16.
SDCL § 55-1-22.3 Spendthrift provision in hybrid purpose trust--Qualified dispositions in trust
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A hybrid purpose trust may: (1) Contain a spendthrift provision; and (2) Also qualify as a trust described in § 55-16-2 . Source: SL 2018, ch 275 , § 17.
SDCL § 55-1-22.4 Application of §§ 55-1-21 to 55-1-21.9 to hybrid purpose trust--Exceptions
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The provisions of §§ 55-1-21 to 55-1-21.9 , inclusive, apply to a hybrid purpose trust except that: (1) Under § 55-1-21.1 , except as otherwise provided in the governing instrument, a trust as described in subdivision 55-1-21(1) terminates when no living animal is covered by the …
SDCL § 55-1-22.5 Discretion of trustee of hybrid purpose trust
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Except as otherwise provided in the governing instrument, a trustee of a hybrid purpose trust is vested with full discretion in administering the trust and considering the best interests of the beneficiaries and the purposes of the trust. Source: SL 2018, ch 275 , § 19.
SDCL § 55-1-22.6 Enforcer of hybrid purpose trust
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In addition to § 55-1-21.4 , an enforcer may also not be a beneficiary of a hybrid purpose trust. Source: SL 2018, ch 275 , § 20.
SDCL § 55-1-24 Definitions applicable to §§ 55-1-24 to 55-1-45
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Terms used in §§ 55-1-24 to 55-1-45 , inclusive, mean: (1) "Beneficial interest," is limited to mean a distribution interest or a remainder interest. A beneficial interest specifically excludes a power of appointment or a power reserved by the settlor; (2) "Distribution beneficia…
SDCL § 55-1-24.1 Improper motive
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For purposes of §§ 55-1-24 to 55-1-45 , inclusive, improper motive is demonstrated by action such as the following: (1) A trustee refusing to make or limiting distributions to beneficiaries other than the trustee due to the trustee's self interest when the trustee also holds a be…
SDCL § 55-1-24.2 Withdrawal power
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A withdrawal power allows a person a right to withdraw all or some part of the trust property, whether from income or principal. The holder of a withdrawal power is not deemed to be the settlor of the trust by failing to exercise a withdrawal power or letting a withdrawal power l…
SDCL § 55-1-25 Distinction between discretionary trust and support trust--Creditor rights--Judicial review
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The common law distinction between a discretionary trust and a support trust and the dual judicial review standards related to this distinction shall be maintained. In the area of creditor rights, the Restatement of Trusts (Third) and the Uniform Trust Code create many new positi…
SDCL § 55-1-26 Judicial foreclosure of beneficial interests, powers of appointment, and reserved powers prohibited--Creditors may not reach powers of appointment or remainder interests
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Regardless of whether or not a trust contains a spendthrift provision: (1) No beneficial interest, power of appointment, or reserved power in a trust may be judicially foreclosed; (2) No creditor may reach a power of appointment or a remainder interest at the trust level. The cre…
SDCL § 55-1-27 Certain remainder interests not property interests
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Although a remainder interest may be an enforceable right, where it is not absolutely certain based on the language of the trust that the remainder interest will be distributed within one year, it may not be classified as a property interest. This section does not affect eligibil…
SDCL § 55-1-28 Interest of beneficiary or others not reachable by creditors
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No creditor may reach an interest of a beneficiary or of any other person on the grounds that the beneficiary or other person holds, either alone or in conjunction with another person, either or both of the following: (1) An unconditional or conditional power to remove a trustee;…
SDCL § 55-1-29 Trust property not subject to personal obligations of trustee
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Trust property is not subject to the personal obligations of the trustee, even if the trustee becomes insolvent or bankrupt. Source: SL 2007, ch 280 , § 6.
SDCL § 55-1-3 Express trust defined
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An express trust is an obligation arising out of a personal confidence reposed in and voluntarily accepted by one for the benefit of another. Source: SDC 1939, § 59.0101.
SDCL § 55-1-30 Distribution and remainder interests not relevant to division of marital property
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Neither a distribution interest nor a remainder interest are relevant in the equitable division of marital property. Source: SL 2007, ch 280 , § 7; SL 2008, ch 257 , § 4.
SDCL § 55-1-31 Resources of settlor's spouse to be considered in making distribution from support trust--Other beneficiary's resources need not be considered
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Unless otherwise provided in the trust, if the settlor's spouse is named as beneficiary, the settlor's spouse is still living, and the trust is classified as a support trust, then the trustee shall consider the resources of the settlor's spouse, including the settlor's obligation…
SDCL § 55-1-32 Alter ego--Pierce the veil, dominion and control claims
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Pierce the veil and dominion and control claims by a party are, in essence, a variation of the alter ego common law doctrine. This section covers all of these types of claims. In the event that a party brings an action against a trustee, beneficiary, trust advisor, or trust prote…
SDCL § 55-1-34 Provision that beneficial interest in trust income or principal may not be transferred before payment to beneficiary permissible
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A settlor may provide in the terms of the trust that a beneficiary's beneficial interest in a trust's income, principal, or in both, may not be voluntarily or involuntarily transferred before payment or delivery of the beneficial interest to the beneficiary by the trustee. Source…
SDCL § 55-1-35 Trust declaration that beneficiary's interest subject to spendthrift trust--Payment of beneficiary expenses
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A declaration in a trust that the interest of a beneficiary shall be held subject to a spendthrift trust is sufficient to restrain voluntary or involuntary alienation of a beneficial interest by a beneficiary to the maximum extent provided by law. Regardless of whether a benefici…
SDCL § 55-1-36 Satisfaction of claims of settlor's creditors from trust estate if settlor is beneficiary
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If a settlor is also a beneficiary of the trust, and the transfer is a qualified transfer pursuant to chapter 55-16 , the provisions of §§ 55-1-24 to 55-1-43 , inclusive, also apply. Conversely, if the settlor is a beneficiary of the trust and the transfer is not a qualified tran…
SDCL § 55-1-36.1 Effect on creditor claims of trustee discretionary powers to pay taxes or make reimbursements for taxes
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Regardless of whether a disposition is a qualified disposition pursuant to chapter 55-16 , where a trustee is granted a discretionary power by the terms of the trust instrument, or any provision of law, to pay directly to any taxing authority, or to reimburse the person liable fo…
SDCL § 55-1-36.2 Income tax reimbursement or payment--Excluded source--Effect--Liability--Fiduciary duty--Applicability
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Unless the terms of the governing instrument expressly provide that a trustor may not be reimbursed by a trust for the trustor's personal income tax liability, if the trustor is treated under 26 U.S.C. §§ 671 to 678, inclusive (January 1, 2026), as the owner of all or part of the…
SDCL § 55-1-37 Application of spendthrift provision
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A spendthrift provision applies to both distribution interests and remainder interests. A spendthrift provision is a material provision of a trust. Source: SL 2007, ch 280 , § 14; SL 2008, ch 257 , § 5.
SDCL § 55-1-38 Classification of distribution interest
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A distribution interest can be classified in three ways: (1) As a mandatory interest, which is a distribution interest, in which the timing of any distribution must occur within one year from the date the right to the distribution arises, and the trustee has no discretion in dete…
SDCL § 55-1-38.1 Classification of interest as support interest
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If a trust instrument containing the distribution language specifically provides that the trustee exercise discretion in a reasonable manner with regard to a discretionary interest, then notwithstanding any other provision of §§ 55-1-38 to 55-1-43 , inclusive, the distribution in…
SDCL § 55-1-39 Bifurcation of trust
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To the extent a trust contains any combination of a mandatory provision, a support provision, the trust shall be bifurcated as follows: (1) The trust shall be a mandatory interest only to the extent of the mandatory language; (2) The trust shall be a support interest only to the …
SDCL § 55-1-4 Creation of express trust--Words or acts of trustor
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An express trust is created as to the trustor and beneficiary by any words or acts of the trustor indicating with reasonable certainty: (1) An intention on the part of the trustor to create a trust; and (2) The subject, purpose, and beneficiary of the trust. Any express trust tha…