Trust established as part of pre-immigration tax planning

Trust Formation in Pre-Immigration Tax Planning: Legal Support

In 2024, a wealthy client from London, a Russian-speaking investor who obtained an EB-5 green card (investment visa for $800k), approached our law firm. The main issue was avoiding the 40% estate tax in the US, which applies to all assets after obtaining tax resident status.

Before the client’s immigration, a strategic plan was developed that included asset restructuring and the creation of necessary trusts. Specifically, an irrevocable trust was established in Alaska, which effectively protects assets from estate and gift taxes after gaining US resident status.

Key Steps of Pre-Immigration Tax Planning

1. Asset and tax risk analysis. Assessment of the client’s ownership structure, identification of assets subject to US taxation, and determination of optimal restructuring methods.
2. Trust creation in a jurisdiction with a favorable tax regime. Choosing Alaska for setting up an irrevocable trust to minimize tax liabilities and protect assets.
3. Transfer of assets into the trust. Legal formalization of asset transfer into the trust before acquiring US tax resident status to avoid estate and gift taxation.
4. Consultations on tax residency. Providing advice on avoiding US tax resident status until the restructuring and trust formation are complete.
5. Preparation for immigration. Completion of all necessary legal and tax procedures before the client’s arrival in the US, ensuring compliance with tax legislation.

Case Study of Pre-Immigration Tax Planning

Situation: A wealthy London client who obtained an EB-5 green card held significant assets outside the US. The primary goal was to avoid a 40% estate tax after gaining US tax resident status.

Actions:

• Conducted a detailed analysis of the client’s assets and tax risks.
   
• Established an irrevocable trust in Alaska for asset transfer.
   
• Transferred assets into the trust before obtaining US tax resident status.
   
• Provided advice on avoiding tax residency until all procedures were completed.
   
• Prepared all necessary documents and ensured compliance with US tax law.

Result: Thanks to timely pre-immigration tax planning, the client avoided paying 40% estate tax in the US, saving over $40 million.

Our Pre-Immigration Tax Planning Services

• Asset and tax risk analysis prior to immigration. Evaluation of ownership structure and identification of US taxable assets.
• Development of tailored tax planning strategies. Considering each client’s specifics to minimize tax liabilities.
• Creation and administration of trusts in favorable jurisdictions. Choosing optimal jurisdictions and ensuring legal compliance.
• Consultations on tax residency and immigration status. Providing advice to avoid undesired tax consequences.
• Preparation of all necessary legal and tax documents. Ensuring full compliance with US tax legislation.

Why Choose Us for Pre-Immigration Tax Planning?

• Many years of experience in international tax planning.
• Deep knowledge of US tax law and other jurisdictions.
• Individual approach to each client and their needs.
• High level of professionalism and confidentiality.

Protect your assets and ensure financial stability. Our lawyers will help implement pre-immigration tax planning effectively and avoid unwanted tax consequences.