Fortune Shield
South Dakota repealed that rule in 1983, and unlike Idaho and Wisconsin — the other two states without the provision — it had no income tax. So, McDowell wrote, a trust set up here could shield a big fortune from taxes for centuries, escaping tax bills as it hands out cash to great-great-great-grandchildren and beyond.
Over dinner at a Sioux Falls restaurant this month, McDowell elaborates on the idea. He has curly gray hair and a quick laugh, and he’s wearing an open collar under a quilted winter vest. He’s known around town for making the one-mile trek to his office on a fat-tire bicycle, even in December.
“I like to equate it to the wine in this glass,” McDowell says, covering his Cabernet with his right hand. “Here you’ve filled it to the rim and push it downstream to the next generation. You can sip from it, you can have the equivalent of outright ownership, but you don’t own it under the law. Your children — they too will have the opportunity to sip from it.” He cups his hands as if to cradle the precious liquid.
“In most states, the glass has to pour out completely in a generation or two. We did away with that in 1983.” He chops the air with his hand.