Shenkman Law
Free Webinar: My trust has been paying state income tax forever. Can I reduce or avoid state income tax?
Date and Time:Â March 16, 2023 4-5:00 pm ET Register Here
Course Description:
State income taxes can be onerous. Rates can reach 14%+ and the effects of a high state income tax on trust income over years, or decades for long term trusts, can exact a significant toll on the growth of trust assets. While most of estate planning is focused on grantor trusts, where the settlor creating the trust (and sometimes another person deemed to be the grantor) is charged with paying the income taxes on trust income, many trusts start off as non-grantor or so-called complex trusts that pay their own income taxes. Further, every grantor trust will at some point become a non-grantor trust so that every trust will face the issues of paying state income tax at some point. A trust that might initially be formed as a grantor trust might change into a non-grantor trust by actions taken during the trust term. When the settlor of a grantor trust dies, that trust will be recharacterized as a non-grantor or complex trust.
As with so many areas of planning, addressing the state income tax costs incurred by a non-grantor trust should be addressed in a broad holistic manner. You cannot just focus on avoiding state income taxes in a vacuum as that may have other significant non-tax consequences. Also, it should be addressed in many cases from a wide-angle lens as asset protection, impact on beneficiaries, which family bucket pays charitable contributions, etc. may all have bearing on the plan.
Handouts
Speakers: Martin M. Shenkman and Joy Matak.
Featured Charity: American Cancer Society
*There are no professional advancement credits (CPE, CLE, etc.) offered for viewing this webinar.
*This may constitute attorney advertising.
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