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Foreign grantor trust: The key advantages
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.
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.
Foreign grantor trust
Sarah Lai explains the key advantages of a foreign grantor trust.
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.
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.
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.
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