Bridget J. Crawford: The Supreme Court, Due Process and State Income Taxation of Trusts, 67 UCLA Law R. Discourse 2 (2019)

Bridget J. Crawford & Michelle S. Simon, both of Pace University Law School, have made available for download their article, “The Supreme Court, Due Process and State Income Taxation of Trusts,” published at 67 UCLA Law R. Discourse 2 (2019). The Abstract is as follows:

What are the constitutional limits on a state’s power to tax a trust with no connection to the state, other than the accident that a beneficiary lives there? The Supreme Court of the United States will take up this question this term in the context of North Carolina v. Kimberley Rice Kaestner 1992 Family Trust. The case involves North Carolina’s income taxation of a trust with a contingent beneficiary, meaning someone who is eligible, but not certain, to receive a distribution or benefit from the trust, who resides in that State. Part I of this Essay explains the background of Kaestner Trust and frames the constitutional questions that will be before the Court at oral arguments on April 16, 2019. Part II examines how and why due process applies in the state income taxation context, with a particular emphasis on how familiar concepts of general and specific jurisdiction apply uneasily to donative trusts. Part III articulates the reasons that the Court should hold that a State has no constitutional authority to impose a tax on trust income where the trust’s only connection with the forum State is the residence of a contingent beneficiary. Kaestner Trust is the most important due process case involving trusts that the Court has decided in over sixty years; it bears directly on the fundamental meaning of due process.

Download article at Crawford, Bridget J. and Simon, Michelle S., The Supreme Court, Due Process and State Income Taxation of Trusts (March 22, 2019). 67 UCLA Law Review Discourse 2 (2019). Available at SSRN: https://ssrn.com/abstract=3358502

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal..

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