International Trust and Estate Planning
Why Attend?
This annual advanced course of study, now in its twelfth year and comprising 13 hours of instruction, deals with estate planning for both the U.S. client with foreign connections and the foreign client with U.S. connections (which may include family members or active or passive investments). In our increasingly multinational world, the sophisticated estate planner cannot practice effectively without knowledge of the special tax and non-tax rules that come into play for these types of clients.
The tax and reporting rules relating to foreign trusts and trusts established by foreign grantors are discussed in depth, as are the regulations and procedures implementing them. The complementary tax regimes affecting foreign corporations with U.S.shareholders also are examined. What constitutes a controlled foreign corporation (CFC) or passive foreign investment company (PFIC)? How do the rules governing these entities interact with the rules governing trusts? How can the check-the-box rules be used in planning?
As in prior years, time is devoted to a discussion of the practical and ethical issues that arise in dealing with international clients in an increasingly regulated world.
We are particularly fortunate to be joined again by a representative of the Internal Revenue Service, who will address current offshore compliance and enforcement initiatives.
What You Will Learn
Topics include:
What can and cannot be accomplished through an asset protection trust;
Civil law analogues to the common law trust;
Income, gift, and estate taxation of nonresident aliens;
Impact of tax treaties;
Marital planning for the non-citizen spouse;
Current developments in international philanthropy;
Important multinational tax and non-tax initiatives affecting cross-border investment;
Recent developments with voluntary disclosure of offshore financial accounts;
The opportunities and pitfalls of expatriation, including a thorough discussion of the 2008 HEART Act changes.
Time is reserved throughout the program to address questions submitted by the registrants.
Who Should Attend
In addition to estate planners, this course is of interest to accountants and financial planners with cross-border practices, as well as to trust officers of both U.S. and foreign banks who need to be aware of the complex trust tax rules in order to ensure the proper exercise of their fiduciary responsibilities.
Planning Chairs
Virginia F. Coleman, Ropes & Gray LLP, Boston
Michael G. Pfeifer, Caplin & Drysdale, Chartered, Washington, D.C.
Faculty
Henry Christensen, III, McDermott Will & Emery, New York
Ellen K. Harrison, Pillsbury Winthrop Shaw Pittman LLP, Washington, D.C.
Joseph S. Henderson, Office of Associate Chief Counsel (International), U.S. Department of the Treasury, Internal Revenue Service, Washington, D.C.
Robert C. Lawrence, III, Cadwalader, Wickersham & Taft LLP, New York
Carlyn S. McCaffrey, Weil, Gotshal & Manges LLP, New York
John C. McDougal, Office of Chief Counsel, Small Business/Self Employed, U.S. Department of the Treasury, Internal Revenue Service, Richmond, Virginia
Michael J. Miller, Roberts & Holland LLP, New York
M. Read Moore, McDermott Will & Emery LLP, Chicago
Douglas L. Siegler, Sutherland Asbill & Brennan LLP, Washington, D.C.
Frederick J. Tansill, Frederick J. Tansill & Associates, McLean, Virginia
Douglas N. Varley, Caplin & Drysdale, Chartered, Washington, D.C.
Andrew H. Weinstein, Holland & Knight LLP, Miami
Bruce Zagaris, Berliner, Corcoran & Rowe LLP, Washington, D.C.
ALI-ABA Staff Attorney: Kevin J. O’Connor,Senior Assistant Director, Office of Courses of Study
Program Schedule
THURSDAY, OCTOBER 1, 2009
7:45 a.m. Registration and Networking Session
WEBCAST SEGMENT A: TAXATION OF NON-RESIDENT ALIENS; CHOICE OF ENTITY
8:45 a.m. Opening Remarks and Course Overview - Ms. Coleman and Mr. Pfeifer
9:00 a.m. Income Taxation of Nonresident Aliens (NRAs) - Mr. Miller
General "residence" rules; Problems with short-term nonresidence; Taxation of investment income, business income, and real estate income; Compliance issues; Dual status returns
9:45 a.m. Transfer Taxation of NRAs - Ms. Coleman
"Domicile" as the basis of taxation; Substantive gift, estate, and GST tax rules; Planning for NRAs with U.S. situs property
10:30 a.m. Networking Break
10:45 a.m. Effect of Tax Treaties on U.S. Activities of NRAs - Mr. Henderson
Key provisions of income and estate and gift tax treaties; 2006 U.S. Model Treaty and new directions; Current issues
11:30 a.m. Trusts and Alternative Foreign Vehicles - Mr. Christensen
U.S. tax definition of "trust"; U.S. tax treatment of civil law constructs (anstalts, foundations, and usufructs); Civil law treatment of common law trusts, including recent case law; Effect of the Hague Convention
12:15 p.m. Lunch Break
WEBCAST SEGMENT B: TAXATION OF FOREIGN TRUSTS AND TRUSTS WITH FOREIGN SETTLORS; MARITAL PLANNING FOR FOREIGN SPOUSES
1:45 p.m. "Outbound" Grantor Trusts of U.S. Persons - Mr. Lawrence
Taxation of U.S. grantors of foreign trusts with U.S. beneficiaries; Sections 679 and 684; Direct and indirect transfers; "Qualified obligations"
2:30 p.m. "Inbound" Grantor Trusts - Ms. Harrison
Definition of "grantor"; Limits on foreign grantor trusts; Treatment of indirect distributions; Anti-avoidance rules; Pre-immigration trusts
3:15 p.m. Networking Break
3:30 p.m. Foreign Non-Grantor Trusts - Ms. McCaffrey
Taxation of, and planning with, foreign non-grantor trusts; Alternatives for reporting distributions to U.S. beneficiaries
4:15 p.m. Marital Deduction Planning for Non-Citizen Spouses - Mr. Siegler
Limitations on availability of marital deduction where spouse is not a U.S. citizen; Lifetime planning and use of "qualified domestic trusts" (QDOTs) at death; Qualifying retirement benefits for marital deduction; Pre- and post-mortem planning to minimize limitations
5:00 p.m. Questions and Answers
5:15 p.m. Adjournment for the Day
FRIDAY, OCTOBER 2, 2009
8:00 a.m. Networking Session
WEBCAST SEGMENT C: TREATMENT OF FOREIGN CORPORATIONS AND INTERNATIONAL PHILANTHROPY; ETHICAL ISSUES IN INTERNATIONAL PLANNING
8:30 a.m. Planning Chairs' Recap of Day One - Ms. Coleman and Mr. Pfeifer
8:45 a.m. Considerations for Underlying Foreign Corporations - Mr. Moore
Overview of U.S. anti-deferral tax regimes: CFCs and PFICs; Attribution of ownership through trusts; Planning considerations for U.S. owners and beneficiaries, including use of "check-the-box" rules
9:30 a.m. International Philanthropy - Mr. Varley
Taxation of direct gifts to overseas recipients; Using private foundations, donor advised funds, and supporting organizations; Prospects for IRS enforcement and Congressional oversight
10:15 a.m. Networking Break
10:30 a.m. Ethical Issues in Offshore Planning - Mr. Zagaris
Application of due diligence and "know-your-client" principles to lawyers involved in wealth planning and management; Update on anti-tax haven initiatives: Organization for Economic Cooperation and Development (OECD), Financial Action Task Force (FATF), Financial Stability Forum (FSF), etc.; Limits on "bank secrecy" and practical lessons of dealing with increasingly complex tax and regulatory regimes
11:15 a.m. Ethics Roundtable - Faculty Panel
12:00 p.m. Lunch Break
WEBCAST SEGMENT D: SPECIAL ISSUES (EXPATRIATION AND ASSET PROTECTION TRUSTS); ISSUES IN OFFSHORE TAX COMPLIANCE
1:30 p.m. Expatriation - Mr. Pfeifer
Expatriation provisions after 2008 HEART Act changes; Problems with scope and administration of "mark-to-market," deferred compensation and non- grantor trust provisions; New Section 2801 "inheritance" tax; and practical issues with reporting
2:15 p.m. Asset Protection Trusts (APTs): Non-Tax Issues - Mr. Tansill
Proper objectives of APTs; Factors in choosing the "best jurisdiction"; U.S. and foreign APTs: are they equal?
3:00 p.m. Networking Break
3:15 p.m. Developments in Offshore Tax Compliance (Practitioner View) - Mr. Weinstein
Recent problems with foreign financial account reporting on Form TDF 90- 22.1 ("FBAR"); Targeted and pattern document requests and examinations; Changes to taxpayer "voluntary disclosure policy and procedure; Statutes of limitation in the international tax area; IRS enforcement policies and their application, including penalty exposure
4:00 p.m. Developments in Offshore Tax Compliance (IRS View) - Mr. McDougal
Updates on recent IRS initiatives: foreign embassy employees, offshore credit cards, offshore employee leasing companies, the U.S. Virgin Islands and more; Expanding limits of offshore information gathering and enforcement; Hearings of Senate Permanent Subcommittee on Investigations; IRS view of taxpayer voluntary disclosure procedure
4:45 p.m. Questions and Answers
5:00 p.m. Adjournment
Total 60-minute hours of instruction: 13, including 1.5 hours of ethics
Suggested Prerequisite: Experience in legal practice as an estate planner, including knowledge of estate, gift, generation-skipping transfer, and fiduciary income tax laws affecting domestic transfers
Educational Objective: Acquisition of knowledge and skills to develop proficiency as an estate planner in the international area; knowledge of tax and reporting requirements affecting inbound and outbound transfers
Level of Instruction: Advanced
Here's what registrants have said about this course:
Speakers were all exceptionally well prepared and knew the subject matter well. The materials are all well done.
The course was very well organized with high caliber individuals who frighteningly inspired me in tax!!
I was particularly impressed with how people shared their experiences so openly without plugging their own agenda – a true example of an effective knowledge society.
I work for a small accounting company in the U.K. and I am heavily involved in foreign trusts, PFICs, and estate returns and expatriations. I have attended several courses in the U.K. but have never gone into such detail as this course. This course has helped me understand the law. I would recommend everyone who deals with foreign trusts to attend this course.
The program was an excellent overview at a high level. Presenters were so good that even though I have not worked in this area I felt I could follow the presentations in a meaningful way.
The course material is excellent and forms a vital part of the course.
I regularly attend and also speak at seminars. This seminar was of the highest quality. It was educational, practical, informative, up to date, and useful to my practice. The speakers were excellent and their written work product of top quality. The time spent (2 full days) was more than worthwhile. I would urge my colleagues to attend future ALI-ABA seminars and to view this one on the web.
