In the case of California ex rel. Brown, Attorney General, et al. v. St. Louis Union Trust Co., 1954, the Supreme Court was asked to determine whether a state could tax an out-of-state trust that had beneficiaries residing within its borders. The State of California attempted to impose an inheritance tax on Missouri-based trusts because some of their beneficiaries lived in California at the time of death for one trust creator and when another transferred assets into his trust while living there himself. The court ruled against California's claim stating that it violated due process rights under the Fourteenth Amendment by trying to levy taxes on property outside its jurisdictional boundaries without providing any benefits or protections in return for those taxed entities. This decision established a precedent limiting states' abilities to extend their taxing powers beyond their geographical limits based solely on beneficiary residence or decedent domicile status.

In the dissenting opinion for California ex rel. Brown, Attorney General, et al. v. St. Louis Union Trust Co., Justice Robert H. Jackson disagreed with the majority's decision to deny California jurisdiction over a trust fund held in Missouri by a nonresident trustee for beneficiaries living in California and elsewhere outside of Missouri. He argued that this ruling was inconsistent with previous decisions where states were allowed to tax income from trusts based on beneficiary residence rather than trustee location or trust administration site - as such, he believed it should also be possible for states to exercise jurisdiction over trusts under similar circumstances. Justice Jackson further contended that denying California jurisdiction would create an unfair situation where trustees could potentially avoid legal obligations simply by moving assets out-of-state while still benefiting from those same assets within their home state through distribution to resident beneficiaries. He concluded his dissent by expressing concern about potential negative implications of the court's decision on future cases involving interstate taxation and regulation of trusts, suggesting it might encourage evasion tactics among trustees seeking to escape local law enforcement or regulatory oversight.