There is no such thing as an "SD trust" the way there is a GRAT or a QTIP. What people mean is any trust whose situs and administration sit in South Dakota, and the family is choosing a body of law, not a product. That law offers no state income tax on retained income, no rule against perpetuities, directed trust statutes, the strongest privacy in the country, self-settled asset protection, and decanting to fix a trust without a courthouse. All of it requires actual South Dakota administration by a qualified South Dakota trustee. Situs is administration, not an address.
For a California family the candid part matters most. California still taxes a trust with a California fiduciary or noncontingent beneficiary, taxes accumulated income when it is distributed, has closed the incomplete gift nongrantor trust since 2023, and always taxes California source income. And a grantor trust saves no state income tax at all. South Dakota is a vault that sits alongside the California living trust, not a replacement for it.
The full piece is at turnipseed.law.
