Ruled Unconstitutional: MN Trust Tax Law

Minnesota attorneys and friends, have you heard about the Fielding v Commissioner of Revenue finding?  

The ruling that was handed down on May 31, 2017 says, if you have an irrevocable trust created after 1995 that paid income taxes to Minnesota you may be entitled to a refund from the state. 

Previously Minnesota claimed irrevocable trusts as "resident trust" if the grantor was a resident of Minnesota at the time the trust became irrevocable, regardless of the trustees location or the location of the assets held and managed in the trust.  

This new ruling says that Minnesota cannot justify a tax based solely on one historical moment, the time the trust became irrevocable.  Constitutional Due Process holds that there must be a relationship between a tax imposed and the benefits or protections provided by the State.   Thus; a trust in which the Trustee is not a Minnesota resident, and the asset are held/managed outside of Minnesota there are no protections or benefits provided by the State of Minnesota and there for no relationship to justify state income tax.   

The decision of this case may have serious tax benefits for you and your clients but based on tax law there is only a limited amount of time to act and receive potentials refunds.  

Cornerstone Private Asset Trust is uniquely positioned, as a South Dakota Trust Company with a Minnesota office, to aid clients in working through this court decision.

If you would like more information please feel free to contact us as we would be happy to discuss your situation further.  


Additional resources on this case can be found at: 

Tax Refunds for Trust with Minnesota Grantors?