There is no doubt that Texas is among the most popular states to live, work, and start a business. Population shifts continue to show more Americans voluntarily moving to the Lone Star State to take advantage of the many opportunities it offers. Texans have much to be proud of as the state continues building thoughtful regulatory frameworks that support a diversified and growing economy. While Texas is a leader in many areas of business and law, its residents should think carefully before committing multigenerational estate planning structures to governance under Texas law.
Texas has strong creditor protections for its residents, and this strength is most clearly illustrated by its homestead protection. The inability of most creditors to access the family homestead provides a level of statutory protection that few other states offer. This protection reflects a longstanding Texas policy choice to safeguard the family home from financial disruption.
The issue is not that Texas law is inadequate. The issue is that modern wealth and multigenerational wealth planning require a deeper legal toolset. This is an area of law that Texas has not chosen to prioritize as a matter of policy. Families with complex balance sheets, operating businesses, concentrated investment portfolios, or long-term governance goals often need trust structures designed for privacy, administrative flexibility, and long-term durability.
For those families, the question becomes not where they live, but where their trust should live. In the American federal system, those two places do not have to be the same.
Trusts operate under state statutes. The rules governing administration, fiduciary powers, creditor remedies, beneficiary rights, and the ability to modify a trust are determined by the state whose law governs the trust. Choosing a trust jurisdiction is therefore not merely a legal formality. It is a strategic decision about the legal operating system that will govern family wealth for generations.
While Texas has focused on building one of the most dynamic economic environments in the country, South Dakota has spent the last several decades building one of the most comprehensive modern trust frameworks among domestic jurisdictions. Through consistent legislative attention, the state has developed statutes that support long-term planning, specialized fiduciary structures, and administrative flexibility. As a result, South Dakota has become one of the leading jurisdictions in the United States for sophisticated trust planning.
For Texas residents, the opportunity is not to replace Texas law entirely, but to combine the strengths of both jurisdictions.
Texas law offers meaningful protections for certain assets, particularly the family homestead. South Dakota law, by contrast, offers a broader framework for administering and governing trust assets across generations. When used together thoughtfully, families can take advantage of Texas’s statutory protections while also benefiting from South Dakota’s advanced trust infrastructure.
Effective estate planning looks at the entire legal framework surrounding family wealth. At Stuart Green Law, we refer to this framework as the five pillars of modern estate planning: privacy, asset protection, control, family governance, and wealth management. The strongest planning structures integrate each of these pillars into a coherent system designed to function across decades of family and financial change.
Consider asset protection as an example. Texas provides substantial protection for the family homestead, but Texas law does not generally permit self-settled spendthrift trusts, commonly referred to as Domestic Asset Protection Trusts. South Dakota law does. This means a Texas resident may continue enjoying the protections afforded by Texas homestead law while also establishing a South Dakota trust to protect other categories of assets such as investment portfolios, partnership interests, or concentrated stock holdings.
Jurisdiction also matters for privacy and administrative structure. South Dakota trust law allows families to manage beneficiary information rights and fiduciary responsibilities in a more deliberate way. The state’s directed trust statutes permit responsibilities within a trust to be divided among specialized advisors, allowing investment oversight, administration, and distribution decisions to be handled by the most appropriate parties.
This structure reflects the realities of modern wealth. Large or complex family wealth enterprises often involve operating businesses, private investments, and assets spread across multiple jurisdictions. A trust framework that allows specialization and long-term flexibility can significantly improve governance, efficiency, and administration.
For Texas residents, the practical takeaway is straightforward. Texas remains an exceptional place to live and build a business. At the same time, the legal infrastructure governing multigenerational trusts has developed most aggressively in jurisdictions that have made trust law a legislative priority.
South Dakota is one of those jurisdictions.
By separating the question of residence from the question of trust governance, Texas families can take advantage of the strongest aspects of both systems. Texas can remain the center of a family’s life and business activity, while a South Dakota trust provides the statutory framework needed to steward wealth privately, efficiently, and across generations.
Modern estate planning is not about choosing one state over another. It is about building a system that uses the best available legal tools to protect family assets, support responsible governance, and provide clarity for the generations that follow.