Non-Resident Aliens (NRAs) may have existing offshore trusts that they may wish to transfer to the United States . Generally, the situs of a foreign (offshore/non-U.S. law) trust can be transferred to the United States. This is often accomplished by utilizing South Dakota Trust Company LLC as trustee.
South Dakota Trust Company LLC (SDTC) typically reviews the existing trust as well as a newly drafted domestic trust. Thereafter, the domestic trustee declares the new South Dakota trust (or offshore trustee declares) with the purpose of the new trust as part of the declaration. The foreign trustee then pays over trust assets with a deed of distribution to the new domestic trust. This may also be accomplished via a decant. It is important to note that there may be potential tax issues (e.g., UNI, accumulations distributions and throwback rules) with either method of changing the situs of an offshore foreign trust to United States situs. However, if there are U.S. beneficiaries of a foreign trust that does not change situs before the death of the foreign Grantor, the U.S. tax and tax reporting obligations are both extremely burdensome and very complex administratively.