MCLE SELF-STUDY ARTICLE SOME ADDITIONAL ISSUES [AND SOLUTIONS?] RELATING TO THE CALIFORNIA INCOME TAXATION OF ESTATES AND TRUSTS

Written by Paul N. Frimmer, Esq.^*

I. INTRODUCTION

The author’s prior articles on the subject of California income taxation of estates and trusts tried to make sense of California’s antiquated trust taxation rules in the context of current estate planning techniques.⁰¹ Since the publication of those prior articles, there has been one judicial development and one legislative development;⁰² additionally, the author has become aware of several other issues that should be explored. As in the past, the answers to these issues usually are not found in existing authority, so the author’s purposes in this article are to highlight these issues and to apply reasoning and common sense in an attempt to resolve some of them with what little authority exists. As with the author’s past articles, endnotes will be kept to a minimum based on the assumption that the reader is already familiar with the basics of federal and California income taxation of trusts and estates.

II. PAULA TRUST-JUDICIAL SANITY PREVAILS