USA Law and Practice Contributed by: Christopher Boyett, David Scott Sloan, Max Angel and Eric Bracy, Holland & Knight LLP
1.6 Transparency and Increased Global Reporting Foreign Account Tax Compliance Act (FATCA) The United States has not adopted the OECD’s Com - mon Reporting Standard (CRS) or the EU’s DAC6. Instead, it enforces the Foreign Account Tax Com - pliance Act (FATCA), which requires foreign financial institutions to report information about accounts held by US taxpayers. US residents with offshore accounts must comply with these federal reporting require - ments. Corporate Transparency Act (CTA) Under the federal Corporate Transparency Act (CTA), corporations, LLCs, and similar entities formed under the laws of a foreign country and registered to do business in any US state must report their ben - eficial ownership information to the Financial Crimes Enforcement Network (“FinCEN”) unless an exemp - tion applies. These transparency measures are designed to combat money laundering and tax evasion. For clients in the US, especially high net worth individuals using trusts or private entities, this means increased scrutiny and the need for careful structuring to ensure compliance. 2. Succession 2.1 Cultural Considerations in Succession Planning The United States is culturally diverse, and succession planning often reflects a wide range of family struc - tures and values. While some families prioritise early wealth transfers and collaborative planning across generations, others prefer to retain control and delay transitions. Many high net worth individuals use revo - cable trusts, family limited partnerships, or private trust companies to maintain oversight while gradually involving younger generations. Family size and dynamics vary, but there is a growing trend towards planning for blended families, multigen - erational households, and philanthropic goals. Long- term trusts, such as dynasty trusts, are commonly used to preserve wealth across generations while minimising tax exposure. These structures offer flex -
ibility and control, which appeals to families navigating complex personal and financial relationships. Cultural attitudes towards disclosure, control and legacy often shape how and when wealth is transferred. 2.2 International Planning As families and businesses become increasingly global, succession planning in the United States must account for a wide range of cross-border com - plexities. US citizens and domiciliaries are subject to federal income and transfer taxes on their worldwide assets, regardless of where those assets or benefi - ciaries are located. This can create tension when for - eign jurisdictions impose conflicting tax rules, forced heirship regimes, or reporting obligations that do not align with US law. International planning often requires co-ordination across multiple legal systems. For example, a US trust may not be recognised in a civil law country, or a bequest to a non-citizen spouse may not qualify for the unlimited marital deduction unless structured through a qualified domestic trust. Similarly, ben - eficiaries residing abroad may face local tax conse - quences upon receiving distributions from US estates or trusts. To address these challenges, US advisers frequently collaborate with foreign counsel to align estate plans with applicable treaties and local laws. Trusts gov - erned by US law are commonly used to hold assets for international families, offering long-term control, tax deferral, and asset protection. Planning also takes into account reporting obligations under FATCA, the CTA, and other transparency regimes that may affect foreign account holders and entity structures. Flex - ibility and careful co-ordination are essential to ensure that succession plans remain effective across borders. 2.3 Forced Heirship Laws The United States does not have forced heirship laws. Individuals are generally free to distribute their assets as they wish through a valid will or trust. However, nearly every state provides certain protections for surviving spouses. In most jurisdictions, a surviving spouse has the right to claim an elective share of the deceased spouse’s estate, typically ranging from one
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