Legal Seminar, Chicago, IL

D. Things are better, but… Example of Some State Charter Issues: • ITC chartered in Colorado wanted to open a trust office in Michigan, but Michigan law did not allow an out of state trust company to open an office. Same issue has existed in Florida, Arizona and California. However, Florida recently allowed an out of state ITC to act as trustee for a Florida client, so long as it has no office in Florida. • ITC chartered in Oklahoma wanted to open an office in Georgia, but no reciprocity existed because Georgia law does not really recognize an ITC, only a “bank”. • Similar situation as above, but this time in South Carolina, with a similar result.

• Delaware is a frequent charter state for trust entities, particularly large ones, due to favorable trust laws (e.g. asset protection trusts, bifurcation of trustees) but an out of state trust entity may not avail itself of the favorable laws – the entity must be a Delaware chartered trust company or a nationally chartered entity headquartered in Delaware. • Many of the largest trust entities, including banks, have chartered separate entities in Delaware to use Delaware law.