Foreign Grantor Trust: The Basics

Care for Your Off-Shore Beneficiaries

Foreign families with loved ones in the U.S. may wish to set up a foreign grantor trust.

The foreign grantor trust allows international families to take advantage of tax benefits, increased flexibility, political stability, and secure asset protection laws.

What is a Foreign Grantor Trust?

A foreign grantor trust is both a foreign trust and a grantor trust. The trust is not subject to U.S. income tax on income produced by non-U.S. situs assets. 

A revocable foreign grantor trust established in the U.S. remains revocable until the death of the grantor at which time it becomes irrevocable. The irrevocable trust benefits the U.S. beneficiary, but any U.S. situs assets are then subject to U.S. tax. 

If the settlor has the power to revoke the trust, it is considered a revocable trust for U.S. tax purposes.

If the grantor is both the settlor and owns the assets in trust, it is also considered a grantor trust and is not subject to U.S. tax on non-U.S. sourced income.

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Three Significant U.S. Trust Tax Cases, One Issue: Nexus Between a State and a Trust

When are states permitted to tax undistributed trust income?

As I am researching another precedent-setting trust case for an upcoming virtual continuing education panelist discussion for IICLE (Illinois Institute for Continuing Education), it’s hard to ignore the trend we see regarding trust taxation.

In 2018, we closely followed the Fielding case’s trajectory with our business development director and company president. We watched as Fielding won in Minnesota’s Supreme Court and as the case landed on the steps of the Supreme Court of the United States.

Also, on the SCOTUS steps at the time was the Kaestner case out of North Carolina. As many of us are very aware, SCOTUS denied hearing Fielding but argued Kaestner, and the rest is history.

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Nevada Dynasty Trusts: Asset Protection for Generations

4 Reasons to Consider Establishing Your Dynasty Trust in Nevada

Choosing the right trust strategy to protect your assets is an important and often complex decision. Dynasty trusts are a great option when you need to secure assets for generations, and they minimize or even eliminate many taxes associated with trusts including distribution, estate, inheritance, transfer taxes, and more.

Once you’ve decided that a dynasty trust is right for you, the next most important decision is where you should establish your trust.

Both Nevada and Delaware are considered some of the best places to establish a trust to take full advantage of friendly trust laws, because of precedents set in both Nevada and Delaware, Nevada is often considered the better choice.

If you’re feeling unsure about establishing a Nevada Dynasty Trust, here are four reasons why it’s the best choice to pass your legacy to your family for several generations.

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COVID-19 Creates a Stark Reminder That Even a Basic Estate Plan is Far Better Than No Plan

COVID-19: An Example of Just How Unpredictable Life Can Be. Why a Revocable Trust May Be a Great Starting Point For You

If COVID-19 has made you take a closer look at your financial plans, you’re not alone. You may have only recently started establishing a basic estate plan, or you may be rethinking the plans you had previously put in place. Now is a great time to review your financial strategies and consider establishing a revocable trust as part of your estate plan.

Chances are, you know the fundamental differences between a will and a trust, but have you considered why a trust might be the better decision for you? First, we review the differences and benefits of each.

Continue reading COVID-19 Creates a Stark Reminder That Even a Basic Estate Plan is Far Better Than No Plan

COVID-19: Why Estate Planning is More Important Than Ever

A brief overview of the two most common estate planning strategies

The current global health crisis has left many people uncertain about the future. Now more than ever, having a financial plan in place is crucial. Not only should you consider your immediate and short-term financial goals, but you should also look at long-term planning.

Specifically, what plans do you have in place to make sure your wishes are carried out and your family is taken care of after you are gone?

We review the basics of Estate Planning and what to consider in light of COVID-19.

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Summarizing the 54th Annual Heckerling Institute on Estate Planning

Popular Estate Planning Topics and Innovations Presented By Industry Leaders

13-17 January 2020 @ The Marriot World Center, Orlando, FL

The weeklong 54th Annual Heckerling Institute on Estate Planning included 4,000+ attendees, including several representatives from Alliance Trust Company of Nevada. We have collaborated to compile the below summary covering the highlights from the conference.

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Deciding Between a Will and a Trust? The Distinctions You Need to Know

The Basics of Wills and Trusts and What You Need to Know About Probate

We get a lot of questions about the differences between a will and a trust – but there are a few more distinctions we think you should know.

Understanding how to protect your assets and your family requires knowledge of what protections your will, trust, or testamentary trust actually grants you and your beneficiaries.

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Selecting a Successor Trustee: Is a Family Member Really the Best Option For You?

Should You Choose a Corporate Trustee or Appoint Someone You Know?

When a family establishes a revocable trust, the grantor is, in many cases, the trustee as well. However, a revocable trust requires that the grantor appoints a successor trustee.

The successor trustee is on standby until the acting trustee dies or becomes mentally incapacitated and is unable to manage the trust.

You may think you know whom you would choose as a successor trustee, but it’s not as simple as appointing a family member and calling it a day. The successor trustee has many essential functions that take up time and resources.

If your family appoints this person, you must consider how other family members will view it and ensure there are no conflicts of interest.

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Is a Foreign Grantor Trust Right For You?

Considerations Before Establishing an Offshore Trust

Often international families have U.S. family members whom they want to include in their estate planning. A foreign grantor trust allows families to establish a long-term trust in the United States to benefit offshore family members.

In this blog, we’ll talk about the creation of U.S. trusts for U.S. beneficiaries by non-U.S. persons. We’ll provide an overview of revocable foreign grantor trusts and irrevocable U.S. domestic non-grantor trusts.

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Five Reasons a Special Needs Trust Could Be Right for Your Family

The top five reasons you should consider a Special Needs Trust to protect family members with disabilities

Special Needs Trusts are designed specifically to benefit those with physical or mental disabilities and those without the ability to manage their own finances. Special Needs Trusts serve to protect the beneficiary financially and if structured appropriately, allow the beneficiary to continue to receive essential government assistance.

The trustee appointed to a Special Needs Trust can be a trustworthy family member or a third-party trustee. Choosing the right trustee is vital to the success of the trust, especially when establishing a trust for a younger beneficiary.

Many families are unsure of whether or not they would benefit from a Special Needs Trust. It’s important to talk to a reputable trust company or attorney to get a better understanding of your specific situation.

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