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Without billionaires, even cattle outnumber people, why does this place hold half a trillion dollars worth of assets?

State data shows that South Dakota holds $500 billion worth of assets in trusts (Agency Funds)

South Dakota doesn’t have any billionaires or yachts. But according to the Pandora Papers, in a way, this state is a popular storage location for the super rich and powerful in the world.

State data shows that South Dakota holds half a trillion dollars worth of assets in trusts. What makes this location a legitimate asset is the more than 50 trusts that are based here.

South Dakota is just a state with less than 1 million people living and rarely noticed, but is a financial paradise for the super rich?

Tom Simmons, a real estate and trusts attorney who teaches at the University of South Dakota, says there are only a few hundred people here who directly work for the trust industry.

Four decades ago, the state passed several laws that caught the attention of the financial world. They removed the interest rate limit on loans and allowed one type of trust to last forever: a dynasty trust.

A billboard advertising a trust in the city of Sioux Falls.

The zero income tax top fund has made South Dakota a favorable location for anyone looking to pass on wealth to future generations. Since then, the legitimacy of these trusts has been spread by many people and attracted many customers to come here.

Meanwhile, South Dakota is famous for a completely opposite image: a place with farmers, large farmlands or Badlands national park. Even so, the number of cattle and pigs here is more than the people. In the Bloomberg Billionaires Index, there are no billionaires from this state.

Attention turned to South Dakota after the Pandora Papers revealed how foreign politicians and business leaders transfer money and assets to trusts in the US. The purpose is to evade taxes and not disclose their ownership information, their participation in transactions.

Washington Post – participated in the Pandora Records investigation, which identified nearly 30 trusts in the US with assets linked to people or companies accused of fraud, corruption or human rights violations. Although the trust industry is active, the city of Sioux Falls is unlikely to become a business hub. Part of the reason is that these companies operate quite quietly and there are not many companies with big logos like American Bank & Trust, First Bank & Trust…

Phillips Avenue “trust fund” neighborhood in Sioux Falls.

On a corner of Phillips Avenue is Trust Co. Gray with gray curtains covering the first floor windows. Meanwhile, their client list comes from more than 50 countries and 100 billionaires.

Years ago, co-founder Pierce McDowell, considered a leader in the trust industry, went out to dinner with a Bloomberg News reporter. He likens a trust to a multi-generational trust to a glass of wine that many people can sip on and point to a picture of himself with a wealthy heir.

Meanwhile, industry executives rarely give interviews. For example, Jayna Voss and Bobbi Thury, founders of Legacy Law Firm, said the interviews were aimed at making accusations against them, not the fact that many people come to them who are not in the super-rich or high-profile circles or have a shady motive.

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