Minnesota Resident Trusts
Under Minnesota law, if someone was a resident of Minnesota when they created an irrevocable trust, they created a “resident trust” in Minnesota. Under Minnesota Statute, Minnesota taxed 100 percent of its income-even income from interest, dividends and capital gains-regardless of where the Trustee presides or where the grantor or beneficiaries reside. It was always considered a Minnesota resident trust with a Minnesota taint.
The Minnesota Tax Court recently held that this statute is unconstitutional as applied to four irrevocable trusts. One of the trusts had a beneficiary who was a Minnesota resident, and the others had beneficiaries from states other than Minnesota. The assets were managed outside Minnesota and the Trustee was also located outside of the state.
Please contact us if you have a trust that may fall under this case law. We would be happy to help you with an analysis of your specific situation. Also, we would like to consult with you regarding any estate planning you may be looking at for your future, especially in light of this case.
Please call Roben Hunter at (952) 844-2507 or Scott Nordeen at (651) 287-6312 if you have further questions.
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