South Dakota Codified Laws 29A-2-707. Survivorship with respect to future interests under terms of trust
(a) A future interest created under the terms of a trust is contingent on the beneficiary surviving the distribution date.
(b) If an individual named as a beneficiary of a future interest created under the terms of a trust does not survive the distribution date, the future interest fails unless (i) the beneficiary is a grandparent, descendant of a grandparent, a stepchild, or a descendant of a stepchild of the testator or settlor and (ii) the beneficiary left descendants who survive the distribution date. Those descendants take by representation the property to which the beneficiary would have been entitled had the beneficiary survived the distribution date.
Terms Used In South Dakota Codified Laws 29A-2-707
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Devise: To gift property by will.
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- Property: includes property, real and personal. See South Dakota Codified Laws 2-14-2
- Testator: A male person who leaves a will at death.
(c) If a future interest created under the terms of a trust is made in the form of a class gift and a beneficiary (member of the class) dies before the distribution date, the share of the beneficiary fails, passes to the surviving members of the class, or passes to the surviving descendants of any deceased members of the class, as the case may be, unless (i) the beneficiary is a grandparent, a descendant of a grandparent, a stepchild, or a descendant of a stepchild of the testator or settlor, and (ii) the beneficiary left descendants who survive the distribution date. Those descendants take by representation the property to which the beneficiary would have been entitled had the beneficiary survived the distribution date.
(d) If a future interest created under the terms of a trust fails for any reason:
(1) If the property passes under the residuary clause in the transferor’s will, then the residuary clause is treated as creating a future interest under the terms of a trust.
(2) If the property passes to the transferor’s heirs, then the property shall be distributed under § 29A-2-711.
(e) For purposes of this section:
(1) “Class gift” excludes a future interest to “issue,” “descendants,” or “heirs of the body,” the disposition of which is controlled by § 29A-2-708, and excludes a devise to “heirs,” “next of kin,” “relatives,” or “family,” or a class described by language of similar import, the disposition of which is controlled by § 29A-2-711.
(2) “Distribution date,” with respect to a future interest, means the time when the future interest is to take effect in possession or enjoyment.
Source: SL 1995, ch 167, § 2-707.