Foreign Grantor Trusts for U.S. Beneficiaries

A bridge for global families

International families often face complex cross-border rules when supporting loved ones who live in the United States. A Foreign Grantor Trust (FGT) can help simplify those challenges. It allows a non-U.S. person to provide for U.S. beneficiaries while preserving control, privacy, and favorable tax treatment during their lifetime.

A trust governed by Florida law, for example, may still be considered foreign for U.S. income tax purposes if a non-U.S. person serves as trustee, co-trustee, or trust protector, or if substantial decisions rest outside U.S. control. This flexibility makes Florida an attractive jurisdiction for international families managing assets across borders.

Who benefits from a Foreign Grantor Trust

An FGT may be a strong fit for:

• International families with U.S. heirs. It allows wealth to be shared with U.S. beneficiaries while maintaining the family’s foreign tax status.
• High and ultra-high-net-worth individuals. Those seeking privacy, asset protection, and long-term succession planning across jurisdictions.
• Advisors supporting global families. Attorneys, accountants, and trustees coordinating multi-jurisdictional plans often use FGTs to simplify administration.

Why families use Foreign Grantor Trusts

• Tax efficiency: During the grantor’s lifetime, income earned inside an FGT is typically taxed to the foreign grantor, not the U.S. beneficiaries. This avoids double taxation and simplifies annual reporting.
• Flexibility and control: The grantor can amend or revoke the trust, update distributions, or appoint new trustees, depending on the governing law. This allows the structure to adapt as circumstances change.
• Privacy and protection: An FGT can provide greater confidentiality and asset protection than some domestic trusts, depending on the laws of the governing jurisdiction.
• Multi-generational planning: When structured properly, the trust can benefit U.S. heirs across generations while minimizing exposure to U.S. estate, gift, and generation-skipping transfer taxes.

Planning considerations for international families

• Coordination among advisors: Cross-border planning works best when legal, tax, and fiduciary professionals collaborate from the outset to ensure the trust complies with both U.S. and foreign laws.
• Holding U.S. assets: U.S. real estate held directly in a revocable FGT may be subject to U.S. estate tax, with only a $60,000 exemption. Families often use certain foreign holding companies to help manage this exposure.
• Investment strategy: The trust’s portfolio can include both U.S. and foreign assets, such as bonds and equities. Investment choices should be coordinated with legal and tax advisors to align with the trust’s objectives.
• Transition planning: After the grantor’s death, the trust will typically become a U.S. non-grantor trust, as long as no foreign person retains substantial decision-making power and the trust does not automatically migrate to another jurisdiction. Early planning can make this transition smooth and tax-efficient.

Partnering with HighMark Trust

HighMark Trust provides administrative support and guidance for international families managing complex, cross-border structures.

• Local presence, global perspective. Based in Florida, we serve as a trusted partner to families with international ties.
• Cross-border experience. Our team understands both U.S. and foreign trust requirements and coordinates seamlessly with outside advisors.
• Trusted by UHNW families. We are known for professionalism, discretion, and responsiveness in managing complex fiduciary relationships.

About HighMark Trust

HighMark Trust is a fully independent, Florida-chartered trust company focused exclusively on administrative trustee services. Our fiduciary professionals bring deep expertise, disciplined judgment, and an unwavering commitment to complete alignment with clients and their advisors. With a boutique structure and a service model built on responsiveness, transparency, and long-term partnership, we deliver a higher standard of trust administration for families across generations.