Estate Planning With Foreign Trusts and U.S. Beneficiaries: Tax Issues, Residency, Foreign Anti-Deferral Rules

Note: CPE credit is not offered on this program

Recording of a 90-minute CLE webinar with Q&A

Conducted on Tuesday, April 16, 2019

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will guide estate planners on overcoming the challenges of foreign trusts with U.S. beneficiaries in estate planning. The panel will discuss complex tax rules and reporting obligations, entity and residency classification rules, qualifying non-resident aliens (NRA) grantors as tax owners under Sections 671 AND 679, achieving a step-up in basis, and techniques to avoid foreign anti-deferral rules.


U.S. owners and beneficiaries of foreign trusts are subject to complex tax rules and reporting obligations that are different from those applicable to domestic trusts. It is imperative that tax and estate planners recognize the variety of issues associated with foreign trusts with U.S. owners or beneficiaries, such as the applicable residency rules, complex tax laws and foreign anti-deferral rules.

Tax and estate planners must determine under U.S. tax rules whether an arrangement is a trust, the residency of the trust as foreign or domestic, and characterization of the trust. In addition to the code and regulations, the IRS and courts have provided guidance. Determination of a trust's residency and characterization will determine the potential income and estate tax impact to the beneficiaries, including potential attribution of ownership entities owned by the trust and complex information reporting obligations.

Tax and estate planning advisors must establish strategies to ensure that U.S. owners and beneficiaries of foreign trusts avoid any unintended tax liability on interests of foreign trusts, including such trusts interest in foreign partnerships or corporations while avoiding foreign anti-deferral rules.

Listen as our panel discusses the challenges of foreign trusts with U.S. beneficiaries, residency rules, effective methods to ensure tax savings, achieving tax-free step-up in basis, and understanding the obligations of both trustees and beneficiaries of foreign trusts.



  1. Issues of foreign trusts with U.S. beneficiaries in estate planning
  2. Determining tax residency and applicable rules
  3. Understanding tax rules and reporting obligations of foreign trusts for U.S. estates and taxpayers
  4. Obtaining a tax free step-up in basis
  5. Applicability of foreign anti-deferral rules and methods to avoid them


The panel will discuss these and other key issues:

  • Determining if an arrangement is classified as a trust
  • Avoiding pitfalls of complex tax rules and reporting obligations
  • Understanding residency rules and the use of domestication to benefit the estate
  • Section 671 and qualifying NRA grantors as tax owners
  • Section 679 rules on pre-immigration trusts
  • Methods to achieve step-up in basis
  • Effective techniques to avoid foreign anti-deferral rules
  • Best practices for counsel in overcoming challenges of foreign trusts with U.S. beneficiaries


Brister, Jack
Jack R. Brister, TEP

Managing Member
International Wealth Tax Advisors

Mr. Brister specializes in U.S. tax planning and compliance for non-U.S. families with international wealth and asset...  |  Read More

Lee, Lucy
Lucy S. Lee

Greenberg Traurig

Ms. Lee focuses her practice on international tax and estate planning for individuals and families. She represents high...  |  Read More

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