What does a Texas billionaire’s divorce have to do with the systems of trusts in South Dakota?
Everything. According to a lawsuit from the billionaire’s aggrieved spouse of more than three decades, South Dakota is a kind of “mini-Switzerland” when it comes to offering wealthy people ways to hide their assets.
As soon as her spouse started an affair with another woman, it seems like he began shifting many of the couple’s marital assets into trusts inside South Dakota. Since the trusts — not the billionaire and his wife — now own everything from their vacation homes to the household china, the property isn’t subject to division during the divorce. This threatens to leave the wife destitute after her legal fees are paid.
While this might be shocking information to some, the Texan isn’t the first person to put assets in a South Dakota trust. It’s estimated that as much as $900 billion has been fed into trusts by everyone from Chinese billionaires to wealthy Europeans — not just rich Americans.
Initially, the wife had been listed as a beneficiary on the trusts, but her husband gradually shifted things around in a way that limited her access and interests. Under South Dakota’s laws, he wasn’t required to inform his wife of what he was doing. Since the state allows perpetual trusts that can span generations, they’re hard to break — and the state offers a lot of privacy protection that makes it an attractive holding ground for money that you don’t want other people to find (or get).
Hidden assets can become a major problem in any divorce involving a couple with a high net-worth. While you may think to check overseas accounts, you might not think to look so close to home for your spouse’s treasure trove. If you need assistance fighting for what’s rightfully yours in a divorce, find out how an attorney can help.