Non-US persons with US family members can benefit their families through the establishment of a foreign grantor trust. A properly drafted foreign grantor trust can provide highly favorable US federal tax treatment for US family members. View this video to learn more about its key advantages.
Transcript
As globalization deepens, more families are finding themselves
spread out across different countries, making cross-border wealth
planning increasingly crucial. A common question asked is:
"How can I provide financial support for my US family members
while avoiding unnecessary US tax liabilities?"
A foreign grantor trust, more commonly known as FGT, offers an
effective solution. This type of trust is established under foreign
law with a non-US grantor and with US family members named as
beneficiaries.
The key advantages of foreign grantor trust include:
- Tax efficiency: Any non-US-sourced income generated by the trust is generally not subject to US taxation. Distributions to US beneficiaries are also treated as tax-free foreign gifts.
- Estate tax avoidance and streamlined succession: Assets can bypass US estate tax across generations and upon the grantors' or the beneficiaries' death, assets that avoid probate will ensure a private and efficient transfer process.
- Flexibility and control: The grantor still retains significant
control over trust assets, enabling adaptable long-term wealth
planning.
While FGT provides significant benefits, they are also many complexities that require guidance from professionals. With proper structuring, a FGT can powerfully support your US family members to optimize tax efficiency and also to preserve family wealth across borders.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
