Foreign
Grantor Trusts
You are not a U.S. person. Your children are. There is an established structure for families in this position, and it has to be built and maintained correctly.
Request a consultationA recognised structure, with rules that must be followed.
A non-U.S. parent holds assets in trust for the benefit of children in the United States. The tax treatment follows from how the trust is formed, funded, and administered.
It is a well-established arrangement. It is also one with reporting obligations, and with consequences when those obligations are not met.
The trust changes when you are gone.
Once the grantor is gone, the rules turn harsher for the children.
Trapped income can be taxed above 70 percent — so plan from the start.
The work has to be done at the outset.
The outcome above is not a flaw in the structure. It follows from nobody addressing what happens after the grantor is gone.
Addressed at the outset, the arrangement functions as intended and the reporting stays clean.
Addressed afterwards, the options are narrower and the cost is higher.
Does any of this describe you?
Any one of these is a reason to have the conversation.
You are not a U.S. person, and your children or grandchildren are.
You intend to pass a business, a portfolio, or property to family in America.
You already have a trust, and nobody has explained what happens to it later.
You have been putting shares in your children’s names and calling it planning.
Structure the trust so it survives you.
Establish what you are working with
Your status, your children’s status, the assets, and the jurisdictions in play.
Structure the trust properly
Formed and funded so it qualifies, and so it holds up to scrutiny.
Plan for the transition
What happens when you are no longer the grantor, decided now rather than then.
Keep the reporting clean
The filings that keep the structure intact, handled so they are never the weak point.
Frequently asked.
You can, and for some families that is the right answer.
A direct gift places the asset in your child’s hands permanently, with the U.S. tax and reporting treatment that follows from that. A trust is a different arrangement, with different treatment and different obligations. Which one fits depends on your circumstances.
It may be working now and still be storing up a serious problem for your children.
Many trusts are set up correctly and then simply left alone. What determines the outcome is not how it was drafted, but how it has been run since.
That depends on how the trust is drafted, and it is one of the first things worth discussing.
Arrangements vary considerably in how much authority the grantor keeps. What is appropriate depends on your objectives and on the treatment you need the structure to have.
Not in the way people hope. A second passport does not remove someone from the U.S. tax system.
If they are U.S. citizens or green card holders, the U.S. rules apply, whatever else they hold.
Usually not, and it is worth finding out rather than assuming.
What is possible depends on how the trust was drafted, how long it has been running, and what has happened inside it. That is an assessment, not a guess.
Begin before it matters.
A confidential consultation on what you hold, who it is for, and how it should be structured.
Request a consultation