A trust is the owner of a life insurance policy that is the subject of a proposed life settlement. For purposes of N.Y. Ins. Law §7819, the trust's state of residence is:

Why C is correct

Under N.Y. Ins. Law §7819, when the owner of a policy is a person other than a natural person, the state of residence is determined for choice-of-law purposes: a corporation or other entity resides in the state where it maintains its principal place of business, and a trust resides in a state in which the grantor resides. A trust created by a New York grantor is therefore a New York resident under the life settlement article.

Why the other options are wrong

• A) §7819 ties a trust's residence to the grantor, not to the trustee's domicile; the trustee's home state is not the test.
• B) The parties cannot simply designate a state in the settlement contract; the statute fixes residence by reference to the grantor or the entity's principal place of business.
• D) Where the policy's cash value happens to be invested has no bearing on the residence of a trust under §7819.

Memory hook

Trust residence follows the grantor; other entities follow their principal place of business.