South Dakota Trust Company PFTC Services:

SDTC provides several PFTC services to wealthy families. Some of the more popular services are as follows:

Service One: Assist in the formation and application/licensing process as an “Organizer”, et al
Service Two: Provide a leasehold, et al derived to meet SD’s statutory requirements
Service Three: Provide a resident “SD Director” to meet SD’s statutory requirement
Service Four: Provide ongoing liaison assistance for the PFTC vis-à-vis SD’s regulatory environment, et al
Service Five: When needed or appropriate, provide SDTC’s officers and/or administrative assistants in an effort to enhance situs for possible tax savings or other SD trust benefits

SDTC can provide all of the above services or any combination of the above listed services.

We have a minimum fee of $2500 per month for our PTC services. Please note that the fees listed below are average fees and may vary and are subject to change.

SDTC’s Service One offering:

SDTC offers services as an Organizer (as defined under SDCL Chapter 51A-6A) during the process of obtaining a SD trust company charter. This offering also extends to other services to assist with completion of the licensing process. This service is offered for a charge of $500 per month involved with a minimum charge of $2500. Payment of the minimum is made at the outset of the agreed upon relationship and monthly in advance after the first three months if the process extends beyond five months.

Policy and Procedure Manual - SDTC can assist with the preparation of the South Dakota policy and procedures manual. The cost for this service is generally $5,000-$25,000.

SDTC’s Service Two offering:

SDTC offers SD’s statutorily defined office space requirement together with a shared common area including, but not limited to, a conference room, an area for the examiner’s work station and an area for a fire-proof file cabinet for either $500 or $1000 per month (the former price is representative of a shared office space the latter a separate office). The space is equipped with necessary wiring conduits to accommodate today’s electrical and computer needs. SDTC is happy to assist with the logistics of phone hookup, computer wiring, office furnishing, file cabinet, etc. but any direct costs associated therewith are borne by the respective applicant.

This offering also includes answering the phone line dedicated to the PFTC and limited mail forwarding. Signage is also provided in that the name of the PFTC is stenciled on the glass doorway below our company name on the front door of the building.

SDTC’s Service Three offering:

Some of the management of SDTC can be utilized as one of the PFTC board of directors for as little as $500 per month (this may vary upward/downward depending upon the time involved but not without the agreement of all interested parties). An additional director or committee member involvement would entail an additional $200 per month charge. Minute taking can also be provided at $100 per month.

The PFTC is responsible for securing and paying for acceptable D&O and E&O coverage for the SDTC PFTC board member. This offering has been expressed either in a letter agreement to the interested parties or as part of an overall service agreement setting forth all services that may be implicated.

SDTC’s Service Four offering:

This offering includes ongoing work by the compliance staff officer giving input and assistance on regulatory interaction. The officer acts as a liaison between the SD examiners and you on an ongoing basis and in particular in advance of an audit. The SDTC compliance staff also assists in the maintenance of trust company books and records in a manner which complies with SD law and preparation of periodic reports required by SD and (if relevant) federal government.

SDTC offers this service for $500 per month (this too may vary depending upon time involved).

SDTC’s Service Five offering:

Finally, SDTC offers our trust officers to serve in the capacity of an agent for the administration of trust’s (i.e. trust agent for the PFTC) that may be enhanced by actual duties taking place in SD (i.e. possible state tax savings, dynasty trust opportunities, low premium taxes, self settled and directed trust statutes etc. and other administrative efficiencies). Pricing this component is more difficult than those services defined above. Typically, we charge taking into account an estimate of time involved and/or pricing that might be more reflective of custody versus trustee rates because we are an agent to the trustee versus a full fiduciary. The fee here is dependent upon many factors – number and complexity of the accounts being a couple.

Duties in no particular order may include the following:

learning and working with either your trust accounting system or utilizing ours
filing
telephone duties
attend Trust Committee meetings and preparation and dissemination of minutes for Trust Committee meetings
check writing (including the preparation of discretionary request forms, bill paying, etc.)
overnight packaging and other forward mail responsibilities (which can include service of process agent)
preparation of administrative annual reviews
dissemination of statements quarterly
liaison with SD’s Division of Banking with regard to issues that may arise
provide expertise and assistance with regard to the preparation and during the state regulatory examination
other administrative duties associated with being a Trust Officer

As you know, SDTC does not provide investment management. Our intent is flexibility allowing families the opportunity to continue their usage of their existing investment managers while we strive to be the best administrators we can be. With this in mind and in an effort to make all relationships efficient, as is the case when we are acting in a trusteeship capacity, we advocate custody of the trust assets be held at the spot most convenient for the account in question. This means that our default custodian (Bank of New York) is seldom utilized. We would prefer to use a family's existing custodian or custodians.

Garnering a charter in SD is something that historically has not been a difficult hurdle. However, we need to be certain to relay to the officials that the applicant is a multi family office and consequently, is distinguished from a pure investment firm. If this is done, people are amazed at the ease in which a South Dakota PFTC can be established.

Estimated early costs that a family might expect to incur in the establishment of a South Dakota PFTC include:

application costs $5000
minimum capital outlay $200,000 (this capital is typically invested in treasuries and set aside to warrant against breach of trust – it is therefore not really an expense)
insurance/bonding - $10,000 - $25,000 (this is annual and recurring)
audit fees - $1500 to $7500 (this too is annual and recurring)
legal - ???