Kaestner and the Future of North Carolina Fiduciary Income Taxation

On April 23, 2015, North Carolina’s state fiduciary income tax was held to be unconstitutional as imposed upon the income earned and accumulated by an out-of-state trust in the case of The Kimberly Rice Kaestner 1992 Family Trust v. North Carolina Dep’t of Rev., No. 12 CVS 8740, 2015 WL 1880607 (N.C. Sup. Ct, 2015), by Judge Gregory P. McGuire, Special Superior Court Judge for Complex Business Cases. This article explores the questions trustees and their tax advisors should ask and the action steps they should take in response to this important decision.

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