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State Law Allows Settlors to Modify Trustee Duty to Inform and Report

  • picture of Jennie Cherry
    Jennie Cherry
  • picture of Don Kozusko
    Don Kozusko

The laws of several US states enable a trust settlor to restrict disclosure to beneficiaries, adapting the trust form to offer a choice reflecting contemporary concerns about the confidentiality and management of wealth transfers. A settlor who wants a so-called ‘quiet trust’ (ie, a trust that speaks to the beneficiary only if and when needed) has an alternative to English law trusts requiring disclosure. A quiet trust can be classified as foreign for US federal tax purposes under the government’s two-part test, even when it is established under the laws of a state within the United States (for further details please see “Taxation of Offshore Trusts and Impact of New Lower Tax Rates”). October 13, 2005. Download