Trust Tax Questions Remain After High Court Ruling

Talking Tax

The Supreme Court in June threw out North Carolina’s taxation of a family trust’s income because the trust didn’t have enough of a connection to the state.

The decision, in the case of the Kimberley Rice Kaestner 1992 Family Trust, didn’t give trust and estate attorneys as much instruction as many wanted with respect to state taxation of trusts. Justice Sonia Sotomayor’s opinion was narrowly drawn.

But lawyers still can draw some guidance from it as they advise wealthy clients how, and where, to structure trusts that will minimize tax burdens.

Bloomberg Tax’s Aysha Bagchi spoke with attorney Bob Kleinknecht of Oakstone Law in Florida about how trusts work and what the Kaestner ruling may mean for estate planning. Kleinknecht has experience not only with Florida estate and trust practice but with New York and Massachusetts as well.

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