Foreign Trusts
Foreign Trusts:
A foreign trust is an entity organized outside the United States that is set up to hold and administer funds or property on behalf of beneficiaries. Some domestic taxpayers use this arrangement for the purpose of reducing income from property for United States tax purposes. Another use is for asset protection, or what is commonly known as a Foreign Asset Protection Trusts (FAPT). A FAPT works by naming a trustee in a jurisdiction that does not recognize United States judgments. There are also other uses and variations of this trust that are designed on a case-by-case basis.
This is said by many commentators to be the most difficult area of tax law. You would be well advised to consult a competent tax attorney if considering a foreign trust for legitimate purposes.
