- Consumer
Choosing Situs for a Trust
Speakers: Martin M. Shenkman, Esq. and Jonathan G. Blattmachr, Esq.
Situs refers to the state or jurisdiction whose law will control matters relating to a trust. There is no clear definition as to which state law will apply, which makes planning for situs important. You set up a trust in State A and say in the trust instrument that State B law controls legal matters as to the administration of the trust. Depending on State A law (i.e., state where the trust was created) certain aspects of trust administration may remain governed by that State A’s laws, and the remaining aspects of administration will be controlled by the State B law designated. It appears, however, that you may, however, need some nexus to the State B whose law you want applied for that law to apply. Which state law applies will determine tax status, creditor protection, who can be a trustee, how income is defined, and much more.
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