專業叢書
U.S. Trust and Estate Planning 美國信託規劃實務（英文部分）
Chapter 3 U.S. Revocable Dynasty Trusts
What do I do if I want to transfer assets held by my offshore trust to a U.S. trust?
Historically, many Asian Wealth Creators did not view the U.S. as a viable jurisdiction in which to establish trusts. As such, many families opted for offshore trusts (trusts established outside of the U.S.), perceiving the tax and disclosure requirements for those jurisdictions as less risky or stringent.
While establishing offshore trusts may satisfy certain Wealth Creators that have no U.S. ties (assets or descendants), the vast majority of Asian Wealth Creators have certain ties to the U.S. Specifically, if their descendants become U.S. persons or live in the U.S., offshore trusts are generally not as suitable as certain U.S.-based trusts.
Aside from tax consequences, many offshore trust agreements also contain language that unnecessarily restrict the family’s control over the trust’s assets. Trustees of offshore trusts often have immense control over the trusts they administer. Furthermore, the trust agreement’s language is often static, and Wealth Creators are frequently convinced to “just sign” instead of reviewing all the trust agreement’s terms and suggesting changes. By doing so, Wealth Creators and their families may face considerable and unexpected obstacles when managing their offshore trusts.
Luckily, many Wealth Creators are able to transfer assets held in their offshore trust into a U.S.-based trust in a process typically called decanting. Decanting is especially important for families with investments in the U.S. or family members based in the U.S.
When initiating a decanting, Wealth Creators may face considerable resistance from their offshore trust’s trustee (typically an offshore trust company) and the Wealth Creator’s non-U.S. financial advisors (typically employed by a non-U.S. financial institution), both of whom could impose obstacles to such a transfer. The reluctance to transferring assets can typically be attributed to the loss of future revenues from the account, including both investment management fees and trust administration service fees. To facilitate a seamless transition and an efficient timeline, experienced advisors should be retained to negotiate on the family’s behalf.
When decanting assets from an offshore trust to a U.S. trust, the Wealth Creator should prepare the following documents for original and new trustees, respectively:
Original Trustee(s)
New Trustee(s)
While establishing offshore trusts may satisfy certain Wealth Creators that have no U.S. ties (assets or descendants), the vast majority of Asian Wealth Creators have certain ties to the U.S. Specifically, if their descendants become U.S. persons or live in the U.S., offshore trusts are generally not as suitable as certain U.S.-based trusts.
Aside from tax consequences, many offshore trust agreements also contain language that unnecessarily restrict the family’s control over the trust’s assets. Trustees of offshore trusts often have immense control over the trusts they administer. Furthermore, the trust agreement’s language is often static, and Wealth Creators are frequently convinced to “just sign” instead of reviewing all the trust agreement’s terms and suggesting changes. By doing so, Wealth Creators and their families may face considerable and unexpected obstacles when managing their offshore trusts.
Luckily, many Wealth Creators are able to transfer assets held in their offshore trust into a U.S.-based trust in a process typically called decanting. Decanting is especially important for families with investments in the U.S. or family members based in the U.S.
When initiating a decanting, Wealth Creators may face considerable resistance from their offshore trust’s trustee (typically an offshore trust company) and the Wealth Creator’s non-U.S. financial advisors (typically employed by a non-U.S. financial institution), both of whom could impose obstacles to such a transfer. The reluctance to transferring assets can typically be attributed to the loss of future revenues from the account, including both investment management fees and trust administration service fees. To facilitate a seamless transition and an efficient timeline, experienced advisors should be retained to negotiate on the family’s behalf.
When decanting assets from an offshore trust to a U.S. trust, the Wealth Creator should prepare the following documents for original and new trustees, respectively:
Original Trustee(s)
1. Background information regarding the new trust (the trust assets will be decanted into):
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- the name of the new trust
- the name and address of the new trustee
- the date the new trust was established
- the U.S. tax identification number (EIN) of the new trust
2. Background information regarding the new Trustee:
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- the name of the new Trustee
- the contact information of the new Trustee
- other background information required of the original Trustee
3. The structure of the new trust agreement:
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- a list of the new trust’s fiduciaries
- background information of the new trust’s fiduciaries (including identification documents and background checks)
- a list of authorized signers in the new trust
- any consent to accept trust assets by the new trustee
4. Other required information:
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- the contact information of drafting attorneys in the new trust’s jurisdiction
- documents indemnifying the original trustee for legal responsibility over the decanting
- a memo detailing the rationale for the creation of the new trust (this would generally state that decanting the trust assets is in the best interest of the trust’s beneficiaries)
- a memo discussing the tax ramifications of decanting the assets to the trust’s new jurisdiction (often provided by a tax attorney)
- an asset transfer agreement whereby assets to be transferred are listed
New Trustee(s)
1. The notarized version of the original trust agreement (electronic copies are often acceptable)
2. Information regarding the new trust agreement:
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- the new trust agreement, as drafted by a competent attorney in the new trust jurisdiction
- background information regarding the new trusts’ Grantor(s), fiduciaries and beneficiaries (including identification information)
- information regarding the Grantor’s sources of wealth
- information regarding the assets being transferred to the new trust
3. A release and indemnity agreement signed by the beneficiaries (if required)
4. A Beneficiary Statement for the previous year prepared by the original Trustee detailing:
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- background information on the original trust
- known information regarding the original trusts’ beneficiaries
- any trust income previously distributed to the original trusts’ beneficiarie
- the types of assets held by the original trust agreement
- information regarding any funds held directly by the original trust
