Foreign Trust

By: Elliott Stapleton

Why Would You Need This Type of Trust?

If you create a trust outside of the United States, in a location such as Belize or Cayman Islands, several issues are created for estate, gift, and income tax laws. This type of trust is most appropriate for someone not living in the United States and treated as a nonresident alien but with children in the US.

Many clients believe that a foreign trust provides more asset protection. However, under section 679 of the code, this type of trust will be treated as a grantor trust, and the income will be taxable to the individual.

Is It Irrevocable or Revocable?

This type of trust could be either revocable or irrevocable. Whether to create a revocable or irrevocable trust will be a decision evaluated by your Trust Attorney.

Is There Creditor Protection?

Maybe. Creditor protection will be based on the laws of the country where the trust has been established. Setting up a Foreign Trust may no longer be necessary for asset protection.

Substantial, positive developments have allowed U.S.-based trusts to have asset protection, such as a Domestic Asset Protection Trust, specifically the Ohio Legacy Trust.

What Assets Can Be Placed in This Type of Trust?

The assets that can be placed in this type of trust will depend on the laws of the country where the trust is established. Working with an experienced attorney is important to ensure that the assets placed in the trust comply with all applicable laws and regulations.

Contact us today to schedule a consultation and learn more about how we can help you with your estate planning needs.

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