Episode 34 – California Income Tax Treatment of ING Trusts

Guest: William Lipkind, Attorney, Partner, and Chair of Wilson Elser’s Tax Planning & Controversies Practice

In this episode, David Warren – Co-Founder and Chairman of Bridgeford Trust Company – sits down with returning guest, William Lipkind – Attorney, Partner, and Chair of Wilson Elser’s Tax Planning & Controversies Practice. Bill concentrates his practice in the areas of wealth preservation, asset protection, and state and federal income taxation and joins David for an intriguing discussion on incomplete non-grantor (ING) trusts and California’s move to abolish them.

Recently, legislation enacted in California aimed at taxing ING trusts, requiring the income of an ING trust to be reported in a qualified taxpayer’s gross income. Therefore, if you have a non-grantor trust as defined by the Internal Revenue Code, California will treat it as a grantor trust. David and Bill discuss in further detail the legislation and how to interpret it, as well as how clients with existing INGs in California could move forward and retool their trust. As you listen, you’ll understand that “all is not lost” for California residents, as there are still powerful tax planning tools and strategies available in top-tier jurisdictions, such as South Dakota, with or without the use of ING.