Foreign Grantor Trusts
U.S. trust planning for international families.
For a myriad of reasons, including privacy and asset protection, wealthy families from around the world are seeking U.S. trust solutions. Because of the power and sophistication of its trust laws, international families are increasingly selecting South Dakota for trust situs of Foreign Grantor Trusts.
For families whose citizenship, residency, assets, or beneficiaries span multiple jurisdictions, a Foreign Grantor Trust can provide a compelling framework for addressing complex international planning objectives while accessing the stability and sophistication of U.S. trust laws.
Foreign Grantor Trusts
Planning Objectives
Why a Foreign Trust?
✓ Repatriation to the U.S.
✓ Reporting protocols
✓ Taxation
✓ Foreign individual with U.S. assets
✓ Foreign-born individual living in U.S.
✓ Privacy and political corruption concerns
Trust Structure
How a Foreign Grantor Trust Works
Through appropriate planning and drafting, a South Dakota Foreign Grantor Trust may be established as a “foreign” trust for U.S. tax purposes and, therefore, treated the same as an offshore trust, while availing itself of powerful U.S. trust laws. Failure of the “Court Test” or “Control Test,” as outlined by the IRS, will result in the trust being treated as a non-U.S. entity and, therefore, not subjecting it to U.S. taxation.
Since the trust is considered a South Dakota trust for legal purposes, the state’s industry-leading Dynasty Trust, asset protection, and privacy laws may also be incorporated into the trust. In addition to these compelling aspects about South Dakota trust law that render it the U.S. trust jurisdiction of choice for international families, South Dakota’s progressive modern trust laws render it a leading U.S. trust jurisdiction. Learn more about all of these factors and how they combine to create the South Dakota Advantage.
Questions About Foreign Grantor Trusts?
If you would like to learn more about Foreign Grantor Trusts or explore other U.S. trust planning opportunities available to international families, reach out to us through our contact form or call us at (605) 224-9189.
