An association established underneath the legal guidelines of a jurisdiction exterior the US the place belongings are held and managed for the good thing about designated people or entities. These preparations are topic to the legal guidelines of the jurisdiction the place they’re fashioned. As an illustration, if a belief is established within the Bahamas with a U.S. citizen because the grantor, the construction could be ruled by Bahamian legislation, whereas U.S. tax legal guidelines would nonetheless apply to the U.S. citizen.
Such preparations can provide advantages like asset safety, property planning, and, in some situations, tax deferral, although these benefits are sometimes topic to strict reporting necessities to the related tax authorities within the grantor’s jurisdiction of residence. Traditionally, these constructions had been utilized primarily by high-net-worth people and households; nonetheless, their use has turn out to be more and more frequent with the globalization of wealth administration and the accessibility of worldwide monetary companies.
