US Trusts When Moving Abroad
A US trust can be useful while your life is based in America.
But the position can change when you, your spouse, your children, your trustees, your beneficiaries or your assets move abroad.
You may have:
a revocable living trust
an irrevocable trust
a family trust
a grantor trust
a trust created by a parent
a trust where you are trustee
a trust where you are beneficiary
a trust holding US investments
a trust holding foreign assets
non-US beneficiaries
a non-US spouse
children living abroad
property in more than one country
The question is not only:
Do I have a trust?
The better question is:
Will the trust still work properly when the family, assets or tax position become international?
A trust review should consider tax, reporting, local law, trustees, beneficiaries, distributions, estate planning, investment structure, bank accounts and practical administration.
What should happen to a US trust when you move abroad?
A US trust should be reviewed before moving abroad to check whether it still works for tax, reporting, estate planning and practical administration.
The review should usually consider:
- who created the trust
- whether the trust is revocable or irrevocable
- whether the trust is treated as grantor or non-grantor
- where the trustee lives
- where the beneficiaries live
- where the assets are held
- whether the trust holds US or foreign assets
- whether any beneficiary is a US person
- whether any beneficiary is a non-US person
- whether the trust may be treated differently overseas
- whether Form 3520 or 3520-A reporting could apply
- whether Form 8938 reporting could apply
- whether FBAR reporting could apply
- whether local tax advice is needed
- whether distributions may be taxed differently abroad
- whether the trust still coordinates with wills and beneficiary forms
The IRS says US citizens and resident aliens abroad are generally subject to the same filing rules as people living in the United States and are taxed on worldwide income.
IRS guidance on foreign trusts also explains that reporting rules may apply where a US person enters into a transaction with a foreign trust, is treated as the owner of a foreign trust, or receives distributions from a foreign trust.
The planning point is simple: once a trust becomes international, do not assume the original structure still gives the intended result.
What trust issue do you need to review?
You created the trust
If you created a US trust, review whether moving abroad affects tax treatment, reporting, trustee powers, beneficiaries and estate planning.
You are a trustee
Trustees living abroad may need to review administration, local law, bank access, reporting, investment decisions and tax residence issues.
You are a beneficiary
Beneficiaries abroad should review distributions, tax, reporting, foreign account rules, currency and how trust assets fit their financial plan.
The trust is foreign or may become foreign
Foreign trust status can create complex US reporting and tax consequences for US-connected settlors, trustees or beneficiaries.
A trust that works domestically should be checked before people or assets become international.
Who this page is for
US citizens, green card holders, Americans abroad, former US residents, US trustees, trust beneficiaries abroad and US-connected families with trusts, wills or inherited assets.
Main trust types to review
Revocable living trusts, irrevocable trusts, family trusts, grantor trusts, non-grantor trusts, testamentary trusts and trusts created by parents or relatives.
Main planning risks
Unexpected foreign trust treatment, Form 3520 or 3520-A reporting, local tax mismatch, trustee residence issues, foreign beneficiaries, investment restrictions and weak estate coordination.
Common trigger points
Moving abroad, becoming trustee, receiving trust distributions, inheriting through a trust, changing beneficiaries, buying foreign property or moving children overseas.
Planning outcome
A clear plan for whether the trust still works, what advice is needed, what reporting may apply and how the trust fits the wider estate plan.
A trust can become international without anyone noticing
A trust does not need to be created overseas to become a cross-border planning issue.
A US trust can become more complicated if:
- the settlor moves abroad
- the trustee moves abroad
- a beneficiary moves abroad
- a non-US spouse becomes involved
- children live in another country
- trust assets are moved overseas
- the trust receives foreign assets
- the trust distributes money to someone abroad
- the trust opens a foreign bank account
- the trust owns foreign property
- the family expects to retire outside the United States
These changes can affect how the trust is administered and how distributions are reported.
They can also affect whether the trust still fits the family’s estate planning objectives.
For example, a revocable living trust may have been created to avoid probate or simplify US estate administration.
That does not automatically mean it is recognised, tax-efficient or practical in another country.
A trust can also interact awkwardly with local inheritance rules, forced heirship, matrimonial property rules, tax reporting, investment platforms and foreign bank compliance.
The trust document, trusteeship, asset location and beneficiary position should therefore be reviewed together.
Documents to gather before a US trust review
Trust deed or trust agreement
Gather the full trust document, amendments, schedules, letters of wishes and any restatements or changes made since creation.
Settlor details
Confirm who created the trust, their citizenship, residence, domicile, tax status and whether they are still alive.
Trustee details
List all trustees, successor trustees, protector roles, powers, residence, citizenship and whether any trustee lives outside the United States.
Beneficiary details
List current beneficiaries, contingent beneficiaries, spouse, children, grandchildren and whether any beneficiary lives outside the United States.
Trust assets
Gather statements for bank accounts, investment accounts, property, business interests, life insurance, retirement account links and any foreign assets.
Tax records
Gather trust tax returns, personal tax returns, CPA advice, foreign trust reporting, Form 3520, Form 3520-A, Form 8938 and FBAR records where relevant.
Distribution history
List all trust distributions, dates, amounts, currencies, recipients, withholding, tax advice and whether any recipient lived abroad.
Estate planning documents
Review wills, powers of attorney, healthcare directives, beneficiary forms, letters of wishes and whether documents coordinate with the trust.
Foreign legal advice
Gather any local legal advice on whether the trust is recognised, taxed or administered differently in your current or future country of residence.
Future residence plans
Confirm whether the settlor, trustee or beneficiaries expect to move, retire, study, buy property or inherit assets in another country.
These related pages cover the wider planning issues that often sit around US trusts and international families.
Foreign trusts and US reporting
Foreign trusts, gifts and inheritances can create US tax and reporting obligations for US-connected families.
US estate tax abroad
US estate tax planning may still matter for Americans abroad and for families with US-situs assets.
Non-US spouse planning
A US trust may need to be reviewed carefully where a spouse, beneficiary or heir is not a US citizen.
Cross-border wills and beneficiaries
Wills, trusts, powers of attorney and beneficiary forms should be coordinated when people and assets are international.
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View Financial PlanningRelated Links
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US trusts when moving abroad FAQs
Important information
This page is for general information only and does not constitute personalised financial, tax, legal, investment, pension transfer, retirement, estate planning, trust, probate, accounting, immigration or currency advice.
Trust planning, US trusts, foreign trusts, revocable trusts, irrevocable trusts, grantor trust status, trustee residence, beneficiary residence, trust distributions, Form 3520, Form 3520-A, Form 8938, FBAR, local tax, estate tax, inheritance tax, forced heirship, trust recognition and cross-border administration depend on personal circumstances and may change.
US tax advice should be taken from a suitably qualified US tax adviser or CPA. Trust and legal advice should be taken from suitably qualified attorneys in each relevant country.
Financial planning should be coordinated with legal, tax, pension and estate planning advice where appropriate.
Investing involves risk. Trust, pension, retirement account and investment values can fall as well as rise, and you may get back less than you invest.
Currency movements can affect the value of trust assets, distributions, investments, transfers and income.
