Supreme Court Rules States Cannot Tax Trust Income Solely Based on Beneficiary’s Residence

PLDO Wins Summary Judgement in an Age Discrimination Case

Darknet Dangers and How to Reduce the Risk of Cybercrime


In N.C. Dep’t of Revenue v. Kimberley Rice Kaestner 1992 Family Trust, the U.S. Supreme Court issued a unanimous decision on June 21, 2019 holding the State of North Carolina may not tax a beneficiary on the income of a trust merely because the beneficiary resides within its borders. In Kaestner, an individual domiciled in New York formed a trust for the benefit of his children. The trustee lived in Connecticut. One of the beneficiaries moved to North Carolina and several years later the State assessed a tax of more than $1.3 Million dollars against the beneficiary under a law authorizing the State to tax any trust income that “is for the benefit of” a state resident.

In the victory for the taxpayer, the Court found the beneficiary had no right to, and did not receive, any income distributions from the trust during the years in question. Under the terms of the trust the beneficiary had no right to demand trust income nor could she count on receiving any specific amount of income in the future. The distributions from the trust were in the absolute and sole discretion of the trustee. Further, the trustee maintained no physical presence in North Carolina, made no direct investments in the State, and held no real property there.

While the ruling of Kaestner is very narrow, if you are a trustee or a beneficiary of a trust that has been taxed simply based on residing in a particular state then you should contact your CPA to discuss filing refund claims for any open tax years. This ruling also serves as a reminder to contact your estate planning attorney to review what you might do to improve a trust you have to strengthen a position that tax is not due in a particular state. If you need assistance or have questions about estate planning strategies and trusts, please contact PLDO estate and trust attorney Jason S. Palmisano at 561-362-2030 or email

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On July 8, 2019, PLDO prevailed in the U.S. District Court for the District of Rhode Island on behalf of our client the Central Falls Detention Facility Corporation/Wyatt Detention Facility (the “Wyatt”) on an age discrimination case, Caruso v. Central Falls Detention. The case stands for the proposition that a plaintiff needs to prove he was replaced by another younger employee to establish age discrimination.

The plaintiff, the Director of Training at Wyatt, was terminated following a reorganization of its executive staff. He sued Wyatt claiming that his termination was related to his age. In his decision, District Court Judge John J. McConnell, Jr. ruled that “[t]he facts are undisputed that Wyatt did not replace (the plaintiff), but rather redistributed his job responsibilities to existing employees to save the costs of his position because of Wyatt’s severe financial condition. This redistribution of responsibilities does not equate to replacement under the law of age discrimination.” It should be noted that Wyatt distributed plaintiff’s responsibilities to two employees who then performed the plaintiff’s duties in addition to their existing duties.

Judge McConnell’s ruling affirmed that a “discharged employee is not replaced when another employee is assigned to perform the plaintiff’s duties in addition to other duties, or when the work is redistributed among other existing employees already performing related work.”

For employers considering a reduction in their workforce, this case provides guidance on how to avoid liability in age discrimination claims. Employers may redistribute the eliminated position’s duties to other employees. So long as the retained employees perform the terminated employee’s responsibilities in addition to their current duties, a former employee will have difficulties claiming age discrimination.

To learn more about this case or for assistance with your organization’s employment policies or other legal matters, please contact PLDO Partner and employment lawyer and litigator Matthew C. Reeber at 401-824-5100 or email

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“Cyber Crooks and Crime” Resource Library Expands

Understanding the three components that make up the Internet – the surface web, the deep web and the darknet – are keys to safeguarding against costly and harmful cyberattacks in your organization. As part of a team effort between PLDO and Citrin Cooperman, PLDO Partner Brian J. Lamoureux, a leading voice and frequent commentator on social media and digital law and cybersecurity legal issues, and Kevin Ricci, CISA, CRISC, MCSE, QSA, a leader in the cybersecurity practice at Citrin Cooperman, have co-authored an article, Keeping Data Off Darknet, which provides clarity into the differences among the Internet’s components and offers proactive steps organizations should consider to protect against cyber criminals lurking on the darknet.

The article was recently published in Providence Business News and is the latest addition to the collaboration’s Cyber Crooks and Crime library of resource materials where you can also listen to an original series of informational cybersecurity podcasts, featuring Attorney Lamoureux and Mr. Ricci, and access other learning materials and articles that help businesses address the risk and costly consequences of a cybercrime. Each of the podcast episodes take a deep dive into the cybersecurity landscape, how best to protect against cyberattacks and includes discussion about legal issues regarding privacy rights and data protection. To access the podcasts and other resources, visit Cyber Crooks and Crime and watch for new podcast interviews and resources to stay up-to-date and informed about cybersecurity issues that may affect your business. If you have questions about your organization’s cybersecurity strategies or legal issues, call Attorney Lamoureux at 401-824-5100 or email

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Corporate & Business Overview

Pannone Lopes Devereaux & O’Gara LLC
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1301 Atwood Avenue, Suite 215 N Johnston, RI 02919

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