I’ve exported a tree in fbx format from 3dsmax. The tree aligns correctly if I simply drag it into the level. However if I assign it as a tree for painting on the terrain, it paints as if it’s been chopped down. 
wtf?
From the pic there I can see that the Y axis of the tree is pointing along Z. You need to take this tree into an external 3D app and orient the tree properly.
In 3dsmax it’s oriented the way everything else i export is. And weirdly enough, the tree you see selected in the previous screen capture is the same tree used as a terrain tree.
So, it’s oriented correctly in my 3d app, oriented correctly when i drag it from my project window into the scene window. However it’s not oriented correctly when it’s used as a terrain tree… odd.
The green arrow is Y… Y should be pointing up. In 3DS Z is up by default. In 3DS you need to rotate the tree by 90 degrees in X.
Read this thread for a little more info.
Ethan