Stand-By South Dakota Dynasty Trusts
The Stand-by South Dakota Dynasty Trust is a strategy for foreign citizens with U.S. beneficiaries who have established foreign trusts in off-shore jurisdictions. Upon the grantor’s death, the foreign trust pours the trust assets over to an existing (nominally funded) Stand-by South Dakota Dynasty Trust. This strategy could help to avoid the burdensome income tax filing requirements of the U.S. beneficiaries and the negative U.S. income tax rules on distributions of accumulated income.
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