International Estate Planning: A Reference Guide
Barbara Hauser
Price: $175.00 725 pages. 1 Looseleaf Volume. 1 CD-ROM. Index. Appendices. Updated annually or when needed.
ISBN-13: 978-1-57823-228-4 / ISBN-10: 1-57823-228-7
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ABOUT THE AUTHOR
INTRODUCTION
PART I : TAX ISSUES
1 CHAPTER ONE - JURISDICTIONAL REACH OF UNITED STATES TAX (FEDERAL ESTATE, GIFT AND GENERATION-SKIPPING TRANSFER TAX)
1.1 OVERVIEW1.2 UNITED STATES PERSONS
1.2.1 Estate Tax
1.2.2 Gift Tax
1.2.3 Generation-skipping Transfer Tax
1.3 CITIZENS
1.3.1 At Birth
1.3.2 Naturalized
1.3.3 Dual Nationality
1.3.4 American Indian Nations
1.4 RESIDENTS
1.4.1 Domiciliary
1.4.2 "Green card" Holder
1.4.3 Illegal Aliens
1.5 PRACTICAL POINTERS
2 CHAPTER TWO-NON-U.S. PERSONS
2.1 ESTATE TAX2.1.1 Situs of Assets
2.2.2 Overview
2.2.3 Jointly-owned Property
2.2.4 Marital Property
2.1.5 Real Property
2.1.6 Tangible Personal Property
2.1.7 Currency
2.1.8 Art on Loan for Exhibition
2.1.9 Corporate Securities
2.1.10 Bank Deposits
2.1.11 Debt Obligations
2.1.12 Qualified Portfolio Debt Obligations
2.1.13 Life insurance proceeds
2.1.14 Partnership Interests
2.1.15 Revocable transfers and certain transfers within three years of death
2.1.16 Powers of Appointment
2.1.17 Interest in a lawsuit
2.1.18 Valuation of Assets
2.1.19 Rates of Tax
2.1.20 Credits
2.1.21 Unified Credit
2.1.22 State Death Tax Credit
2.1.23 Gift Tax Credit
2.1.24 Credit for Tax on Prior Transfers
2.1.25 Deductions
2.1.26 Marital Deduction
2.1.27 Expenses
2.1.28 Funeral Expenses
2.1.29 Administration Expenses
2.1.30 Claims
2.1.31 Losses
2.1.32 Indebtedness-mortgages
2.1.33 Taxes
2.1.34 Charitable Deduction
2.1.35 Disclaimers
2.1.36 Required Reporting
2.1.37 Penalties and Enforcement
2.2 GIFT TAX
2.2.1 Application
2.2.2 Unified Credit
2.3 GENERATION-SKIPPING TRANSFER TAX
3 CHAPTER THREE-FOREIGN TRUSTS AND RECEIPT OF FOREIGN GIFTS
3.1 FOREIGN GRANTOR TRUSTS3.2 ASSET PROTECTION TRUSTS ("APTs")
3.3 RECEIPT OF FOREIGN GIFTS
4 CHAPTER FOUR-EXPATRIATION
4.1 OVERVIEW4.1.1 Permanent Residents Still Affected
4.1.2 Wealthy Persons Now Subject to the Alternative Tax Regime for Expatriates-Motive is Not Relevant
4.1.2.1 1996 Law Presumed Wealthy Persons had a Tax Avoidance Motive
4.1.2.2 2004 Act-Wealthy Persons are now Subject to the Alternative Tax Regime
4.1.2.3 No Exceptions Unless File Tax-Compliance Certificate
4.1.3 New Notification and Reporting Requirements
4.1.4 Penalties
4.1.5 Publication of Names and Reporting Among Agencies
4.1.6 New Thirty Day Limit
4.2 IMMIGRATION CONSEQUENCES
4.3 TAXATION
4.3.1 Gift Tax
4.3.2 Estate Tax
4.3.3 The Estate Tax Exception: Controlled Foreign Entities with U.S. Assets
5 CHAPTER FIVE-NON-U.S. CITIZEN SPOUSE
5.1 OVERVIEW5.2 ESTATE TAX
5.2.1 Elimination of Marital Deduction
5.2.2 Jointly Owned Assets
5.2.3 Qualified Domestic Trust
5.2.3.1 Overview
5.2.3.2 U.S. Trustee
5.2.3.3 Regulations
5.2.3.4 Election by Executor
5.2.3.5 Taxation of a QDOT
5.2.3.6 Illustration of Tax Calculation and Credit
5.2.3.7 "Bank or Bond" Requirement
5.2.3.8 Reformation of Trust to Qualify
5.2.4 Nontrust Marital Transfers
5.2.5 Form of Transfer by Surviving Spouse to a QDOT
5.2.6 Deadlines for the Transfers
5.2.7 Subsequent U.S. Citizenship
5.3 GIFT TAX
5.3.1 Elimination of Marital Deduction
5.3.2 Enlargement of Annual Exclusion
5.3.3 Ability to Split Gifts
6 CHAPTER SIX-FOREIGN DEATH TAXES AND U.S. CREDIT
6.1 FOREIGN DEATH TAXES6.2 U.S. CREDIT FOR FOREIGN DEATH TAX
6.3 DEDUCTION FOR FOREIGN TAX ON CERTAIN CHARITABLE BEQUESTS.
7 CHAPTER SEVEN-ESTATE TAX TREATIES
7.1 OVERVIEW7.2 ESTATE AND GIFT TAX TREATIES
7.3 PRE-1966 TREATIES
Australia (1954) (not currently applicable)
Finland (1952)-Estate and Inheritance
Greece (1953)-Estate
Ireland (1951)-Estate
Italy (1956)-Estate and Inheritance
Japan (1955)-Estate, Inheritance and Gift
Norway (1951)-Estate and Inheritance
South Africa (1952)-Estate
Switzerland (1952)-Estate and Inheritance
7.4 OECD MODEL CONVENTION
7.5 U.S. TREASURY DEPARTMENT
7.5.1 The 1977 U.S. Model
7.5.2 1979 U.S. Model
7.5.3 1980 U.S. Model
7.6 POST 1966 ESTATE TAX TREATIES
Austria (1983)-Estate, Inheritance and Gift
Denmark (1984)-Estate, Inheritance and Gift
France (1980)-Estate, Inheritance and Gift
Germany (1986)-Estate, Inheritance and Gift
Netherlands (1971)-Estate, Inheritance and Gift
Sweden (1984)-Estate, Inheritance and Gift
United Kingdom (1979)-Estate and Gift
7.7 SELECTED ISSUES UNDER THE TREATIES
7.8 CANADA-INCOME TAX PROTOCOL
7.9 REQUIRED FORM TO CLAIM BENEFIT OF TREATY
7.10 CONCLUSION
APPENDIX TO PART I
PART II : NON-TAX ISSUES
8 CHAPTER EIGHT-OVERVIEW OF NON-TAX ISSUES AND CONFLICT OF LAWS
8.1 CONFLICT OF LAWS OVERVIEW
8.2 AMERICAN LAW INSTITUTE RESTATEMENT (SECOND) CONFLICT OF LAWS
8.3 TRADITIONAL ENGLISH RULE
8.4 FRENCH CHOICE OF LAW RULES
8.5 HAGUE CONVENTION APPROACH
8.6 THE EUROPEAN PARLIAMENT APPROACH
9 CHAPTER NINE-SELECTING A WILL OR WILLS
9.1 INTRODUCTION9.2 PREVALENT MISTAKES
9.2.1 Accidental Revocation
9.2.2 "Pour over" Wills (and their Revocable Trusts)
9.3 "SITUS" WILLS: REASONS TO CONSIDER THE USE OF MULTIPLE WILLS
9.3.1 Immovable Property
9.3.2 Elimination of some administration expenses
9.3.3 Clearer application of relevant law
9.3.4 Translations
9.3.5 Selection of Law
9.3.6 Requirements for Validity
9.3.7 Need of an Original Will by the Probate Court
9.3.8 Elimination of a Probate Fee
9.3.9 Confidentiality-if administration is confined to certain assets
9.3.10 Simpler administration in each Jurisdiction
9.4 CHOICE OF LAW ISSUES
9.4.1 Capacity
9.4.2 Bequest to Witness
9.4.3 Revocation Effected by Marriage
9.4.4 Revocation Effected by Divorce
9.4.5 Bequests to Charities or Others
9.5 PROPERTY THAT CAN BE DISPOSED OF BY WILL
9.5.1 Marital Rights and Regimes
9.5.2 Forced Heirship
9.5.3 Other Restrictions
9.6 DRAFTING CONCERNS
9.6.1 Non-revocation Provision
9.6.2 Statement of Residency
9.6.3 Coordination of Beneficiaries
9.6.4 Allocation of Tax Liability
9.6.5 Responsibility for Tax Payment
9.6.6 Authority to Administer
9.6.7 Critical Definitions
9.7 FORMALITIES OF EXECUTION
9.7.1 Recognized Classifications of Wills
9.7.2 Validity of Formalities of Execution
9.7.2.1 Local Law
9.7.2.2 Uniform Probate Code
9.7.2.3 The Washington Convention
9.8 CONCLUSION
10 CHAPTER TEN-USING A TRUST
10.1 GENERAL WARNING10.2 LACK OF PROBATE PROCEEDING
10.3 NON-RECOGNITION OF THE TRUST AS A LEGAL RELATIONSHIP
10.4 THE HAGUE CONVENTION ON THE RECOGNITION OF TRUSTS
10.5 ENGLISH TRUST LAW
10.5.1 Letter of Wishes
10.5.2 Protector
10.5.3 Termination by Beneficiaries
10.5.4 Spendthrift Trusts
10.5.5 Secret Trusts
10.5.6 "Two Year" Trusts in Wills
10.5.7 Living Trusts
10.6 CHANGES IN TRUST LAW IN THE UNITED STATES
10.6.1 Selected Provisions of the UTC
10.6.2 Rule against Perpetuities
10.6.2.1 Traditional State laws on the Tule Against Perpetuities- The Restatement (Third) of Trusts
10.6.2.2 Uniform Statutory Rule Against Perpetuities (USRAP)
10.6.2.3 Marketing by South Dakota-Beginning of State Law Changes
10.6.2.4 Repeals (or extensions) of the rule against perpetuities
10.7 CHANGES IN TRUST LAW IN OTHER COUNTRIES
11 CHAPTER ELEVEN-RESTRICTIONS ON ALIEN OWNERSHIP
11.1 OWNERSHIP OF LAND IN THE UNITED STATES11.2 FOREIGN LAND OWNED BY U.S. PERSONS
12 CHAPTER TWELVE-MARRIAGE, MARITAL PROPERTY AND WIDOWS' RIGHTS
12.1 OVERVIEW OF ISSUES12.2 MARRIAGE
12.2.1 Traditional Definitions of Marriage
12.2.1.1 English Law
12.2.1.2 French Law
12.2.1.3 Japan
12.2.1.4 The Philippines
12.2.1.5 American Indian Marriage
12.2.1.6 The United States
12.2.2 "Common-Law" Marriages
12.2.3 Polygamy
12.2.4 Same Sex "Marriages"
12.2.5 Destination Weddings
12.3 MARITAL PROPERTY
12.3.1 Community Property Regimes
12.3.2 Separate Property Regimes
12.3.3 Religious Property Regimes
12.3.4 Choice of Marital Property Regime
12.4 PRE-MARITAL CONTRACTS
12.5 DURING THE MARRIAGE
12.6 ELECTIVE RIGHTS POST-DEATH
13 CHAPTER THIRTEEN-CHILDREN AND FORCED HEIRSHIP
13.1 OVERVIEW13.2 FAMILY PROTECTION ACTS
13.3 DEFINITION OF "CHILD"
13.4 DAUGHTERS
13.5 REPRESENTATIVE RULES
13.5.1 Statutory shares
13.5.2 Muslim Succession
13.5.3 Polish approach
13.4 EFFECT OF LIFETIME TRANSFERS
13.4.1 "Claw Back" additions
13.4.2 Donee Heir additions
13.5 CHOICE OF LAW ISSUES
14 CHAPTER FOURTEEN-USE OF DOCUMENTS ABROAD
14.1 WILLS14.2 HAGUE CONVENTION OF THE CONFLICT OF LAWS RELATING TO THE FORM OF TESTAMENTARY DISPOSITIONS (OCTOBER 5, 1961)
14.3 TRUSTS
14.4 HAGUE CONVENTION ON THE LAW APPLICABLE TO TRUSTS AND ON THEIR RECOGNITION (JULY 1, 1985)
14.5 POWERS OF ATTORNEY
14.6 LIVING WILLS
15 CHAPTER FIFTEEN-PROBATE MATTERS
15.1 HAGUE CONVENTION CONCERNING THE INTERNATIONAL ADMINISTRATION OF THE ESTATES OF DECEASED PERSONS (OCTOBER 2,1973)15.2 DEATH ABROAD
Resources
A. Periodicals
B. Treatises on International Estate Planning
C. Miscellaneous References
Organizational Assistance
CHAPTER SIXTEEN - FAMILY OFFICES
16.1 Overview of Family Offices
16.2 History of Family Offices
16.3 Single Family Offices
16.3.1 Legal Studies
16.3.2 Services Provided
16.3.2.1 Portfolio Investment Management (and Credit Management)
16.3.2.2 Reporting Functions
16.3.2.3 Management of Non-Investment Assets
16.3.2.4 Risk Management
16.3.2.5 Lifestyle Matters
16.3.2.6 Philanthropy
16.3.2.7 Trust Management (and Family Partnerships)
16.3.2.8 Succession Planning
16.3.2.9 Education and Training
16.3.2.10 Family Governance
16.3.3 Employees
16.4 Multi-Family Offices
16.4.1 Expansion from a Single Family Office
16.4.2 Created by Multiple Families
16.4.3 Created by Professional Advisors
16.4.4 Institutional Family Office Divisions
16.5 Virtual Family Offices
16.6 Global Trends
16.6.1 Mergers and Alliances
16.6.2 Audits of Established Offices
16.6.3 Training Programs for Younger Generations and Family Governance
16.6.4 Prediction-Growth in Single Family Offices
APPENDIX I. INTERNATIONAL TAX TREATIES
Austria APP. I-3
Canada APP. I-17
Denmark APP. I-27
Finland APP. I-41
France APP. I-69
France Protocol APP. 1-67
Germany APP. I-69
Greece APP. I-89
Ireland APP. I-97
Italy APP. I-103
Japan APP. I-109
Netherlands APP. I-117
Norway APP. I-133
South Africa APP. I-141
Sweden APP. I-151
Switzerland APP. I-167
United Kingdom APP. I-173
II. SELECTED HAGUE CONVENTIONS
XI. Convention on the Conflicts of Laws Relating to the Form of Testamentary Dispositions (Concluded October 5, 1961) APP. II-3
XII. Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (Concluded (October 5, 1961) APP. II-11
XXI. Convention Concerning the International Administration of the Estates of Deceased Persons (Concluded October 5,1961) APP. II-19
XXV. Convention on the Law Applicable to Matrimonial Property Regimes (Concluded March 14, 1978) APP. II-39
XXVI. Convention on Celebration and Recognition of the Validity of Marriages (Concluded March 14, 1978) APP. II-51
XXX. Convention on the Law Applicable to Trusts and on Their Recognition (Concluded July 1, 1985) APP. II-61
XXXII. Convention on the Law Applicable to succession to the Estates of Deceased Persons (Concluded on August 1, 1989) APP. II-71
XXXV. Convention on the International Protection of Adults APP. II-83
Private International Law Aspects of Cohabitation Outside Marriage and Registered Partnerships APP. II-103
III. UNITED STATES INTERNAL REVENUE SERVICE FORMS AND NOTICES
IRS Form 706NA United States Estate (and Generation-Skipping Transfer) Tax Return-Estate of nonresident not a citizen of the United States) and Instructions APP. III-3
IRS Form 706-QDT (U. S. Estate Tax Return for Qualified Domestic Trusts APP. III-5
IRS Form 3520 (Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts) and Instructions APP. III-15
IRS Form 3250-A (Annual Information Return of Foreign Trust with a U.S. Owner) and InstructionsAPP. III-33
IRS Form 8854 (Expatriation Information Statement) and Instructions APP. III-41
Notice 97-19 (Internal Revenue Bulletin 1997-10, March 10, 1997) APP. III-46
Notice 98-34 (Internal Revenue Bulletin 1998-27, July 6, 1998) APP. III-55
IRS Criminal Investigation Report: "Abusive Trust Schemes" APP. III-65
IRS DATA RELEASE: Federal Estate Tax Returns Filed for Nonresident Aliens, 1997 and 1998 APP. III -75
IV. MISCELLANEOUS
"Dual Nationality"-U.S. State Department APP. IV-3"Acquisition of U.S. Citizenship by a Child Born Abroad"-U.S. State Department APP. IV-3
"Acquisition of U.S. Citizenship by a Child Born Abroad"- U.S. State Department APP. IV-5
"Advice About Possible Loss of U.S. Citizenship and Dual Nationality"-U .S. State Department APP. IV-7
U.S. Code, Title 8, Section 1481: "Loss of Nationality by Native-Born or Naturalized Citizen; Voluntary Actions; Burden of Proof, Presumptions" APP. IV-13
"Renunciation of U.S. Citizenship"-U.S. State Department APP. IV-15
"Marriage of United States Citizens Abroad"-U.S. State Department APP. IV-19
"Marriage of American Citizens in Italy"-U.S. State Department APP. IV-23
"Marriage in Spain"-U.S. State Department APP. IV-27
"Divorce Overseas"-U.S. State Department APP. IV-31
"Consular Report of Death of a U.S. Citizen Abroad"-U.S. State Department APP. IV-39
"Intercountry Transfer of the Proceeds of an Estate"-U.S. State Department APP. IV-41
"Application for Immigrant Visa and Alien Registration"-U.S. State Department APP. IV-45
Form I-485 "Application to Register Permanent Resident or Adjust Status" with Instructions-Department of Homeland Security APP. IV-49
Form I-130 "Petition for Alien Relative" with Instructions-Department of Homeland Security APP. IV-61
Form I-864 "Affidavit of Support under Section 213A of the Act" with Instructions-Department of Homeland Security APP. IV-67
Form I-864P "Poverty Guidelines"-Department of Homeland Security APP. IV-86
Form I-693 "Medical Examination of Aliens Seeking Adjustments of Status" with Instructions-Department of Homeland Security APP. IV-87
Colorado Attorney General "Information Sheet on Common-Law Marriage" APP. IV-97
"The Vermont Guide to Civil Unions"-Vermont Secretary of State APP. IV-99
Index
CD-ROM TABLE OF CONTENTS
I. INTERNATIONAL TAX TREATIES
Austria
Canada
Denmark
Finland
France
France Protocol
Germany
Greece
Ireland
Italy
Japan
Netherlands
Norway
South Africa
Sweden
Switzerland
United Kingdom
II. SELECTED HAGUE CONVENTIONS
XII. Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (Concluded October 5, 1961)
XXI. Convention Concerning the International Administration of the Estates of Deceased Persons
XXV. Convention on the Law Applicable to Matrimonial Property Regimes (Concluded March 14, 1978)
XXVI. Convention on Celebration and Recognition of the Validity of Marriages (Concluded March 14, 1978)
XXXI. Convention on the Law Applicable to Trusts and on their Recognition (Concluded July 1, 1985)
XXXII. Convention on the Law Applicable to Succession to the Estates of Deceased Persons (Concluded on August 1, 1989)
XXXV. Convention on the International Protection of Adults
Private International Law Aspects of Cohabitation Outside Marriageand Registered Partnerships
IRS Form 706NA United States Estate (and Generation-Skipping Transfer) Tax Return—Estate of Nonresident not a Citizen of theUnited States)
IRS Form 706-QDT (U. S. Estate Tax Return for Qualified Domestic Trusts
IRS Form 3520 (Annual Return to ReportTransactions With Foreign Trusts and Receipt of Certain Foreign Gifts) and Instructions
IRS Form 3520-A Annual Information Return Of Foreign Trust with a U.S. Owner (Under section 6048(b)) and Instructions
IRS Form 8854 (Initial and Annual Expatriation Information Statement) and Instructions
Notice 97–19 (Internal Revenue Bulletin1997—10, March 10, 19)
Notice 98–34 (Internal RevenueBulletin 1998–27, July 6, 1998)
IRS Criminal Investigation Report “Abusive Foreign Trust Schemes”
IRS DATA RELEASE: Federal Estate Tax Returns Filed for Nonresident Aliens, 2003, 2004, and 2005
IV. MISCELLANEOUS
“Dual Nationality”—U.S. State Departm
“Acquisition of U.S. Citizenship by a Child Born Abroad
“Advice About Possible Loss ofU.S.Citizenship and Dual Nationality”—U.S. State Department
U.S. Code, Title 8, Section 1481: “Loss of Nationality by Native-Born or Naturalized Citizen; Voluntary Action; Burden of Proof, Presumptions”
“Renunciation of U.S. Citizenship”—U.S. State Department
“Marriage of United StatesCitizens Abroad”—U.S. State Departmen
“Marriage of AmericanCitizens in Italy”—U.S. State Department
“Marriage in Spain”—U.S. State Department
“Divorce Overseas”—U.S. State Department
“Consular Report of Deathof a U.S. Citizen Abroad”—U.S. State Department
“Intercountry Transfer of theProceeds of an Estate”—U.S. State Department
“Application for Immigrant VisaAnd Alien Registration”—U.S. State Department
Form I-485 “Application to Register PermanentResident or Adjust Status” No. 51 Form I-485
Form I-130 “Petition for Alien Relative”with Instructions—Department of Homeland Security
Form I-864 “Affidavit of Support underSection 213A of the Act” with Instructions—Department of Homeland Security
“Poverty Guidelines”—Department of Homeland Security
Form I-693 “Medical Examination of AliensSeeking Adjustment of Status” with Instructions—Department of Homeland Security
Colorado Attorney General“Information Sheet on Common-Law Marriage”
“The Vermont Guide to Civil Unions”—Vermont Secretary of State