The Wealthy have used trusts to avoid taxes for almost one thousand years. Trusts started in the United Kingdom during the Great Crusades. Over the last ten centuries, trust law has evolved. In the U.S., each state has its own set of trust laws. Every trust is uniquely drafted to fit the needs of you and your family.
The most popular types in America are:
Spendthrift Trust Irrevocable Trusts
Spendthrift Trust Asset Protection Irrevocable Trust
Constructive Trust- usually not planned
Special Needs Trust for disabled family members
Tax By-Pass Trust (used by Americans only)
The Best Pre-Immigration International Tax Strategy is a Trust
Each individual moving to the U.S. is different from every other immigrant. Only a trust can be individualized to fit everyone’s unique needs. The typical trust is about 50 pages to 100 pages. A trust can absorb taxable income with little or no tax depending upon the terms of the trust and the location of the trustee.
Unlike a company, a trust can change its nationality. For example, a trust in the U.K. can move to the State of Nevada by simply changing trustees. Of course, the trust can move back to the U.K. or to any other nation with “common law”.
Below is a diagram of the most popular trust and company structure for the European, Canadian or U.K. citizen living in the U.S.
Nevada has a new type of a trust called a “self-directed” trust. The trustee is a licensed trust company or a bank. You and/or your family direct the trustee. You tell the trustee what assets to own, buy and sell. You tell the trustee when it should make a payment to a beneficiary (this is called a distribution).
Upon your death, either your family can direct the trustee or you can give the trustee the authority to manage the investments. The trust agreement explains who gets a distribution and under what conditions.