Foreign trusts may seem like an attractive option for protecting your assets outside of the borders of the United States. Likewise, you may have a family member that has named you as the beneficiary of a trust created in another country.
If you are either a grantor (owner) or a beneficiary of a foreign trust, then you must be aware of the significant and often-overlooked tax reporting obligations for the trust in the U.S. A trust with a foreign owner must file Form 3520-A annually. Additionally, an owner or a beneficiary that has transactions with that trust during the year (assets transferred to or from the trusts, loans made or received, etc.) must also file Form 3520. These forms are extremely complex and time consuming, and there are few tax firms that are even willing to prepare them.
At Lanphier LLP, we help US owners and beneficiaries of foreign trust meet their reporting obligations and assess any past issues related to non-filing. Contact our firm today to discuss your foreign trust issues and how we can assist you.