The Supreme Court recently struck down North Carolina’s attempt to tax undistributed income of a resident trust properly sitused and administered in a no income tax state like South Dakota in North Carolina Department of Revenue v. Kimberley Rice Kaestner 1992 Family Trust. Indicating that to do so is a violation of due process, the Court’s decision is a very important affirmation and validation of powerful state tax planning tools available in non-income tax jurisdictions, and again, underscores the vital importance of selecting the proper trust jurisdiction in the planning process.
South Dakota attorney Terry N. Prendergast of Davenport, Evans, Hurwitz & Smith, LLP, took part in a webinar on July 9, entitled,”Supreme Court Strikes Down Taxation on Undistributed Trust Income – What Does It Mean?” with William Lipkind, attorney, Partner, and Chair of Wilson Elser’s Tax Planning & Controversies practice and Bridgeford Trust Company. The timely webinar discussed one of the most important tax cases in decades. Terry Prendergast is available for questions on the topic.
Below is a link to a recap of the webinar, including the full video presentation:
The slides from the webinar are attached, and you can also take a look at the court cases that we discussed at the following links:
Kaestner – https://www.supremecourt.gov/opinions/18pdf/18-457_2034.pdf
Fielding – https://law.justia.com/cases/minnesota/supreme-court/2018/a17-1177.html