From the May 2005 issue of Investment Advisor • Subscribe!

May 1, 2005

Taxing Locations

In light of IRS Revenue Procedure 2005-24, a word to attorneys preparing trust documentation could forestall trouble down the road. That's because any trusts created on or after June 29, 2005 will require a spousal waiver to remain valid if: a) the grantor's state has or adds rulings on augmented estates; or b) if the grantor in the future moves to a state allowing augmented estates.

Community property states (there are nine) do not have this problem, since property is automatically considered as belonging to both spouses. All other states may have some form of "augmented estate" rulings that could potentially invalidate a CRT.

These are the nine community property states:

o Arizona

o California

o Idaho

o Louisiana

o Nevada

o New Mexico

o Texas

o Washington

o Wisconsin

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