Monday’s Fundamentals Program, “It’s 10 P.M., Do You Know Where Your Trust is Sited?” covers state law issues regarding situs. The speakers were two professors – Rob Sitkoff and Ron Scalise, one trust officer – Jane Ditelberg, and one practicing attorney – Michaelle Rafferty. This all-star cast is involved in shaping the leading written authority in the area.
The summary is a great overview.
My commentary: Normally we draft that the trust agreement governs the choice of substantive law jurisdiction and the situs determines law governing trust administration. Generally, the latter governs decanting, which can make very substantive changes. (Michaelle has a lot of experience using Nevada decanting law to modify California trusts.)
State fiduciary income taxation has rules all over the place that are not necessarily consistent with the above. Dick Nenno, author of the Bloomberg BNA Tax Management Portfolio on the topic, publishes a brief summary of all of the states. My home state of Missouri, which has the oldest tradition of statutory self-settled spendthrift trusts in the country, authorizes perpetual trusts and recently changed its law to tax resident trusts the way Missouri (and other states generally) taxes nonresident trusts. RSMo § 143.341.3.
Steve
