Natural Law Trusts are non-statutory. They have no owners; the NLT owns itself. Therefore when an NLT trustee or beneficiary dies, no asset transfer takes place; and no taxable event occurs. The asset simply stays in the same legal entity, the trust. If the trustee died, the other current trustee or the successor trustee takes over instantly and seamlessly. If a beneficiary dies before his units of beneficial interest are all distributed to him, then they are simply reassigned to a different beneficiary or to the trust corpus. In all cases, no taxable event occurs, and in any case, the trust is not a taxable entity.
