Beware of pre-October 22, 1942 general powers of appointment.Are assets subject to a general power of appointment (GPOA) includible in the powerholder’s estate? Generally, yes.However, for trusts established before October 22, 1942, there’s an exception in which the assets subject to the GPOA aren’t necessarily includible in the estate of the powerholder.Practitioners should be aware of this as these trusts wind down.Co-authored with Emily B.
U.S. Supreme Court holds presence of resident discretionary beneficiaries does not justify North Carolina income taxation of nonresident trustee in Kaestner Trust. When determining whether a trustee of a nongrantor trust must pay a particular state’s income tax on retained ordinary income and capital gains, practitioners should resist the impulse to consult the governing-law clause in the Will or trust instrument.
An important four-part series that discusses a host of issues involving state income taxes on trusts. Part One provides an overview of the various approaches to taxation of trust income, then reviews the various constitutional restrictions, as reflected in numerous federal and state cases.Part Two further examines these aspects, beginning with a discussion of the seminal U.S. Supreme Court case of Quill Corp. v.