OnTheRoadAgain
Junior Member
What is the name of your state (only U.S. law)?
North Carolina
I have a couple questions regarding which state, my irrevocable trusts are taxable in.
I am the 'grantor' of two Irrevocable trusts (Crummey type) that I created twenty+ years ago when my daughters were infants. We resided in North Carolina, and the trust has a couple references to NC statues in the text. Each daughter has a trust, and is the 'beneficiary' of her trust. My brother is the 'trustee', and is a Georgia resident. I had utilized a NC lawyer, who retired many years ago.
For years, we paid both federal and NC state income taxes. There have been no distributions from the trusts, all income and taxable gains throughout the years have been kept in the trust.
Fast forward to current. Both of my daughters have moved out of state, one now a resident in Va, the other a resident in CO. I am considering moving to Florida within the next couple years. Brother (trustee) is still a resident of Ga.
My questions:
1.) Given beneficiary daughters are not in NC state, is NC still the correct state to pay annual income taxes to, assuming all income is still retained in the trust? (I the grantor, am the only one still residing in NC).
2.) If/when I move to Florida, does the trust tax liability to NC cease? Florida does not have an income tax; Grantor, Beneficiaries, and Trustee would all be out of NC state. Or, does the fact that the trust was originally created while in NC mean that NC taxes will be paid forever to them?
If this is a simple answer for you guys, great! If I need to go to someone here in NC to answer the questions, is it a lawyer type I need, or a CPA type I need to ask, or send a letter to the state tax department?
North Carolina
I have a couple questions regarding which state, my irrevocable trusts are taxable in.
I am the 'grantor' of two Irrevocable trusts (Crummey type) that I created twenty+ years ago when my daughters were infants. We resided in North Carolina, and the trust has a couple references to NC statues in the text. Each daughter has a trust, and is the 'beneficiary' of her trust. My brother is the 'trustee', and is a Georgia resident. I had utilized a NC lawyer, who retired many years ago.
For years, we paid both federal and NC state income taxes. There have been no distributions from the trusts, all income and taxable gains throughout the years have been kept in the trust.
Fast forward to current. Both of my daughters have moved out of state, one now a resident in Va, the other a resident in CO. I am considering moving to Florida within the next couple years. Brother (trustee) is still a resident of Ga.
My questions:
1.) Given beneficiary daughters are not in NC state, is NC still the correct state to pay annual income taxes to, assuming all income is still retained in the trust? (I the grantor, am the only one still residing in NC).
2.) If/when I move to Florida, does the trust tax liability to NC cease? Florida does not have an income tax; Grantor, Beneficiaries, and Trustee would all be out of NC state. Or, does the fact that the trust was originally created while in NC mean that NC taxes will be paid forever to them?
If this is a simple answer for you guys, great! If I need to go to someone here in NC to answer the questions, is it a lawyer type I need, or a CPA type I need to ask, or send a letter to the state tax department?