What do you do if you are a wealthy multinational planning for part of your estate to go to the United States? One idea is to create a foreign grantor trust that receives tax benefits for the grantee. The trust will grow tax-free and any distributions made to beneficiaries will be tax-free as well. With the obsession of minimizing income tax, the United States is becoming the place to stash foreign wealth. This makes income tax management the key to most estate planning today. Additionally, estate planners are playing around with basis as a tax reduction technique through inheritance. Ultimately, there should be a three-part harmony: first, structure the trust properly; second, a thoughtful use of entities to compose the trust structure; and third, proper asset allocation.
See Carol J. Clouse, Death and Taxes for Wealthy Foreigners, Private Wealth, June 17, 2016.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
