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Withers plays an important role in historic US Supreme Court groundbreaking decision on taxation of trusts

24 June 2019 | 3 minute watch

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Withers plays an important role in historic US Supreme Court groundbreaking decision on taxation of trusts
Play Video

Withers plays an important role in historic US Supreme Court groundbreaking decision on taxation of trusts

Note: We have provided a transcript of the discussion in this video if you are unable to watch the video version. This transcript is generated using a combination of speech recognition software and human transcribers and may contain errors.

William Kambas (00:11): It was a very exciting brief to be a part of. The kimberley Kaestner trust case against the state of North Carolina is one that is at the very foundations of multi-state taxation of trusts, and multi-state taxation generally. Nexus is a fundamental aspect of tax, and this case seeks to revisit standards of nexus in light of a trust.

We've been doing this for years. We've represented families all over the country as well as trust companies and banks who serve those families through multi-state structures. We were able to implement, and now we were able to consolidate that expereience into a supreme court brief.

James Dougherty (01:00): So withers bergman was was in the perfect position to take the lead on this case, because what was required to address this is at the heart this was a trusts and estates case, but dealing with income tax as well and we have a deep bench with skill sets that do trusts and estates, that do income tax and also having a litigation team that helps bring the advocacy to it. So you're getting the best in class in terms of the technical skill and then being able to advocate that in a way that people who aren't specialists to advocate that in a way that people who aren't specialists, in this field can understand, and find persuasive.

David Lehn (01:30): So there were a dozen Amicus briefs filed, and from the comments that we recieved from across the country, ours in many ways was the most insightful, and the most thorough and it was great to be a part of it. It was great to see so many different people within the firm who had input into this matter and it was great to see the outcome of it and the product that we, as Withers, as a firm produced. It was magnificent.

James Dougherty (02:00): So one of the great things about the experience working on this project is that playing under the bright lights that the Supreme Court brings with it, is that people got to see the type of environment that Withers brings to all of its cases where you hacwe the best talent for a specific problem being brought together across offices to help a client achieve what their goals are. 

David Lehn (02:30): So i was at the Supreme Court for the oral argument and this was a case about state income tax and how one state or another state decides to tax the same amount of income that may show up under a trust. The justices were very engaged. They had questions and they were much more insightful about what the issue was and they really went after each of the attorneys wanting to know how to justify their own arguments.

Lisa Page (03:00): It was thrilling to be involved in putting together this brief. Day in and day out we analysed tax law through the narrow lens of whatever a particular client needs and to have a client in this case that was asking us to consider the policy implications of law on a broader scale and working with a team with disperate background and tax law, to pull it together was really, really an experience that I'll remember. 

Withers partners David Lehn, William Kambas, James Dougherty, and associate Lisa Page provide their insight on our involvement and contribution to the biggest tax case for trusts in decades (North Carolina Department of Revenue v. The Kimberley Rice Kaestner 1992 Family Trust). The Court’s unanimous decision, announced on Friday, June 21, ensures that core principles of trust law and taxing jurisdiction remain intact by ruling that a trust beneficiary’s residence in a state does not establish enough of a connection to permit the state to tax it.

Note: We have provided a transcript of the discussion in this video if you are unable to watch the video version. This transcript is generated using a combination of speech recognition software and human transcribers and may contain errors.

William Kambas (00:11): It was a very exciting brief to be a part of. The kimberley Kaestner trust case against the state of North Carolina is one that is at the very foundations of multi-state taxation of trusts, and multi-state taxation generally. Nexus is a fundamental aspect of tax, and this case seeks to revisit standards of nexus in light of a trust.

We've been doing this for years. We've represented families all over the country as well as trust companies and banks who serve those families through multi-state structures. We were able to implement, and now we were able to consolidate that expereience into a supreme court brief.

James Dougherty (01:00): So withers bergman was was in the perfect position to take the lead on this case, because what was required to address this is at the heart this was a trusts and estates case, but dealing with income tax as well and we have a deep bench with skill sets that do trusts and estates, that do income tax and also having a litigation team that helps bring the advocacy to it. So you're getting the best in class in terms of the technical skill and then being able to advocate that in a way that people who aren't specialists to advocate that in a way that people who aren't specialists, in this field can understand, and find persuasive.

David Lehn (01:30): So there were a dozen Amicus briefs filed, and from the comments that we recieved from across the country, ours in many ways was the most insightful, and the most thorough and it was great to be a part of it. It was great to see so many different people within the firm who had input into this matter and it was great to see the outcome of it and the product that we, as Withers, as a firm produced. It was magnificent.

James Dougherty (02:00): So one of the great things about the experience working on this project is that playing under the bright lights that the Supreme Court brings with it, is that people got to see the type of environment that Withers brings to all of its cases where you hacwe the best talent for a specific problem being brought together across offices to help a client achieve what their goals are. 

David Lehn (02:30): So i was at the Supreme Court for the oral argument and this was a case about state income tax and how one state or another state decides to tax the same amount of income that may show up under a trust. The justices were very engaged. They had questions and they were much more insightful about what the issue was and they really went after each of the attorneys wanting to know how to justify their own arguments.

Lisa Page (03:00): It was thrilling to be involved in putting together this brief. Day in and day out we analysed tax law through the narrow lens of whatever a particular client needs and to have a client in this case that was asking us to consider the policy implications of law on a broader scale and working with a team with disperate background and tax law, to pull it together was really, really an experience that I'll remember. 

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.

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