Background: Final Grantor of a Family Trust, created under California law, and resident in California, dies in January 2015. This death causes the creation of four subordinate trusts. Three are for the children of the decedent, and one is for a grandchild with special needs. The trusts for two of the children are created with the beneficiary as the trustee; thus no issue. The trust for the third child, resident in Virginia, is created with one trustee in Colorado and the second trustee in Virginia. The trust for the grandchild with special needs, who is resident in Virginia, has one trustee in California, and the second trustee in Virginia. Both trusts have a single trustee signature provision, and it is expected that all transactions for both will be signed by the Virginia resident trustee, or successor.
With the exception of some California source real estate rental income that is credited intermittently to the child trust, all assets of these two trusts are invested in/and all income is derived from U.S. Treasury obligations.
Both Colorado and Virginia state that Trust returns must be filed in those states if the trusts are administered in their states. California states that returns are due if a fiduciary is a California resident.
Questions:
- Does a return for the trust with the Virginia resident child beneficiary, with one Virginia resident trustee and one Colorado Trustee, need to be filed in Colorado?
- Does a return for the trust with the Virginia resident grandchild beneficiary, with one Virginia resident trustee and one California Trustee, need to be filed in California?
I guess I am getting hung up on the meaning of "administered" in and "fiduciary".
Regards, Dan
P.S. Alan, I am trying to be more precise in how I phrase my questions.