Home › Forums › General › EHTrust/EHT Topics and Creative Real Estate Financing › Foreign benficiaries or properties.
February 17, 2008 at 3:06 am #4479
I believe that I’ve read in an earlier thread that an EHT could not have a foreign beneficiary – have I understood that correctly? Foreign meaning they are not individuals who are USA citizens or legal immigrants. Would that also exclude foreign persons who are here on visas, and maybe for extended periods, such as foreign nationals working for foreign businesses doing business in the USA. Is the fact that they reside in the USA sufficient for them to be a trust beneficiary?
Also, can a foreign piece of real property, Canadian or Mexican, or anywhere else for that matter, be held in an EHT, provided that all of the beneficiaries are USA based?
ThanksFebruary 20, 2008 at 9:53 pm #24643
Yeah – Anybody outhere know the deal?
I thought somebody’d jump in by now.
Just curious to kow myself.
DFebruary 21, 2008 at 12:56 pm #24644
It is my opinion that the property MUST be in the U.S.February 21, 2008 at 4:09 pm #24645
From my understanding the property must be in the US due to the NARS trusts advantages in relation to favorable US tax laws that is the the idea that Bill G conveyed to me when I had asked this awhile ago so i concur with Gary’s post on this.
Now if you recall Tom Standen spoke about this in a post regarding foreign entities holding beneficial interest in the trust.
I would play it safe and call Tom to verfiy EHC’s criteria on foreign beneficiaries and or corporations holding beneficial interest.
I tried finding the post in the search but could not find it and it was a relativley recent post.
Good luck..February 21, 2008 at 6:49 pm #24646
If foreigners persons or entities can buy US property….then they should be able to hold beneficial interest.
Also, foreign entities and their activities are defined by the state. Persons or entities outside the state are considered foreigners.February 23, 2008 at 7:40 pm #24647
Anyone can be a co-beneficiary of a land trust (as long as one of the beneficiaries is a US citizen…our rules, not the gubment’s). And a title holding trust would probably work in any western country; however, the NEHTrust(tm)(pat. pend) is not going to do anything for anyone outside the country if the property is not in the U.S., as its function relates specifically to the due-on-sale (alienation) regulations and certain tax benefits that are nullified in other countries (i.e., personalty vs. realty and specific land use designations).
Also, remember that it is the US doctrine of equitable conversion, doctrine of merger, doctrine of trusts and specific American land use characterization that make the system work here. Other countries don’t have the same governmental doctrines, mortgage laws and income tax statutes.
One could perhaps structure a NEHTrust in Canada or Mexico; but doing so most likely would never allow for a co-beneficiary’s tax deductions for mortgage interest and property tax; it would not protect against any lenders’ alienation provisions (DOSC); it would not separate realty from personalty; it would not allow for simple eviction versus full foreclosure; it would not provide for relief from ‘ancillary administration’; it would not avoid probate; it would not protect against heavy income taxation upon termination of the trust if the property’s value had increased over the term (i.e., reversionary penalties).
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