About the Course
Introduction
This CLE course will provide guidance to estate planners on overcoming the challenges of foreign trust transition planning. The panel will discuss complex tax rules and reporting obligations, the pros and cons of foreign grantor vs. nongrantor trusts, distributions to U.S. and foreign beneficiaries, trust restructuring, and other key considerations for estate planners.
Description
The use of foreign trusts requires estate planners to implement planning to optimize tax strategies. Estate planners and advisers must consider the present and future impact of U.S. tax rules on the transition of a foreign grantor trust to a nongrantor trust.
Generally, U.S. tax law disallows foreign individuals from being grantors of trusts with U.S. beneficiaries unless an exception applies under Section 672(f). A foreign trust with U.S. beneficiaries will be considered a foreign grantor trust if (1) the grantor has the power to revoke the trust, (2) the grantor or the spouse of the grantor are the sole beneficiaries during the grantor's life, and (3) the trust was created on or before September 1995. Being considered a foreign grantor trust for U.S. tax purposes reduces potential income taxes and diminishes reporting requirements.
On the other hand, accumulated income from a foreign nongrantor trust is considered distributable net income (DNI), which is taxable upon distribution to U.S. beneficiaries as ordinary income or capital gains. Advanced knowledge of these tax rules is critical because foreign grantor trusts default to foreign nongrantor trusts upon the death of the grantor resulting in adverse U.S. tax implications that can only be avoided with effective planning.
Listen as our panel discusses the complex tax rules and reporting obligations of foreign trusts, tax pitfalls to avoid, trust restructuring options, and other key considerations for estate planners.
Presented By
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Mr. Brister has over 30 years of experience in forensic accounting, international tax and tax law consulting. Jack founded International Wealth Tax Advisors (IWTA) in 2015 to specialize in servicing international private clients, foreign businesses desiring to do business in the U.S., and individuals working and living abroad. He started his career embedded in the U.S. Internal Revenue Service’s Criminal Investigation Unit. He worked on a variety of multi-jurisdictional cases in cooperation with federal, state and local law enforcement agencies that investigate and prosecute tax evasion, as well as white collar crimes and violent crimes with a financial and tax component. Mr. Brister specializes in integrated income and estate tax planning. He consults extensively for global clients on the state and local tax implications arising when foreign businesses establish operations in the U.S or plan on selling their products to U.S. consumers. His extensive experience working with the IRS along with his almost encyclopedic knowledge of complex tax codes and tax laws enables him to help clients turn potential problems into opportunities and mitigate financial risk.
Mr. Millhouse is a Senior Manager in FGMK’s Specialty Tax Practice. He is an attorney with over 10 years of experience in compliance, planning, reporting, and structuring services to corporations and partnerships in the domestic, foreign, taxable and tax-exempt sectors. Mr. Mr. Millhouse's industry experience includes manufacturing, pharmaceutical, private equity, and technology. He evaluates and recommends tax-efficient planning and investing options, facilitates partnership and corporate purchases, and provides guidance on restructuring and sales transactions.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Tuesday, October 13, 2020
- schedule
1:00 p.m. ET./10:00 a.m. PT
- Overview of U.S. tax treatment of foreign trusts
- Trust transition planning options and challenges
- Distributions to U.S. beneficiaries
- Distributions to foreign beneficiaries
- Trust restructuring
- Best practices and common issues for estate planners and advisers
The panel will review these and other key issues:
- What are the pros and cons of foreign grantor vs. nongrantor trusts?
- What are the U.S. tax implications for foreign trusts with U.S. beneficiaries?
- What are the key considerations and options for trust restructuring to minimize the tax liability of foreign trusts?
- What are some planning techniques available to avoid adverse U.S. tax implications for transition of the foreign grantor to nongrantor trusts?
