International Tax And Estate Planning Discussion Post 5 – Coursework Example
International Tax and E Planning al Affiliation Trusts A trust is a legal entity that is used in owning assets (Davis & Nash, 2014).. There are two basic types of trusts-testamentary trusts and living trusts. A living trust is set up during the individual’s lifetime while a testamentary trust is described in a will and implemented upon his death. In this case we are dealing with a living trust as Peter does not draft it in his will but as a retirement strategy. In this case, Peter will change the ownership of the manufacturing company from his name to the name of the trust. Peter will be the grantor with the children being the trustees hence having legal rights to manage the business.
Due to tax complications, it would be important for Zachary who lives in Singapore to come back home since he is involved in the decision making process of the trust. Domestic trusts are defined as trusts where a U.S. court is able to exercise primary jurisdiction over its administration and where one or more U.S. persons have authority to control all substantial decisions (Mathew Bender & Company, Inc., 2012). In this case, if Zachary considers giving up his U.S. citizenship, then he has to give up the decision making process to Sarah and Danielle.
In this case, the trustees, Sarah, Danielle, and Zachary will have various duties. These include overseeing care of their father, understanding insurance and limitations as far as the trust is involved, transacting necessary business, keeping accurate and updated business records while the grantor is still alive. In a situation where the grantor dies, they should contact an attorney to review the trust, ensure that all beneficiaries are informed on the progress, make distributions if agreed upon, and distribute assets to the beneficiaries. In this case, at retirement after the sale of the company, the trustees should take responsibility of managing the trust. However, in this case, he can choose another individual to do the management on behalf of the siblings.
Davis, L. & Nash, S. (2014). A Guide to Trusts and Trustees’ Duties and powers. SGH Martineu.
Mathew Bender & Company, Inc. (2012). International Estate Planning.