Foreign Grantor Trust
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.
Why a Foreign Trust?
- Repatriation to the U.S.
- Reporting protocols
- Foreign born person living in U.S.
- Foreign person with U.S. assets
- Privacy/political corruption concerns
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 and 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.