USA Law and Practice Contributed by: Diana Zeydel, Marc Selden, Benjamin Babcock and Brian Smith, Greenberg Traurig, LLP
Family size and dynamics vary, but there is a growing trend towards planning for blended families, multi- generational households and philanthropic goals. Long-term trusts, like dynasty trusts, are commonly used to preserve wealth across generations while minimising tax exposure. Cultural attitudes towards disclosure, control and legacy shape how and when wealth is transferred. 2.2 International Planning As families and businesses become increasingly glob - al, succession planning in the US must account for a wide range of cross-border complexities. US citizens and residents are subject to federal income and wealth transfer taxes on their worldwide assets, regardless of where the assets or beneficiaries are located. International planning 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 unlim - ited marital deduction unless structured through a qualified domestic trust. Beneficiaries residing abroad may face local tax consequences upon receiving dis - tributions 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 may be used to hold assets for international families, offering long-term control, tax deferral, and asset protection. Planning accounts for reporting obligations under FATCA, the CTA and other transparency regimes that may affect foreign account holders and entity structures. Flexibility and careful co-ordination are essential to helping ensure that suc - cession plans remain effective across borders. 2.3 Forced Heirship Laws The US does not have forced heirship laws. Individu - als are generally free to transfer their assets as they wish through a valid will or trust. In most states, a sur - viving spouse has the right to claim an elective share of the deceased spouse’s estate, ranging from one third to one half of the elective estate, which frequently includes assets held in a revocable trust.
These rights are automatic and apply regardless of the terms of the will, although they may be modified or waived by prenuptial or postnuptial agreements. 2.4 Marital Property Separate Property Regime Marital property laws in the US vary by state, but most states follow a “separate property” regime rather than a community property system. In separate property states, assets acquired during the marriage are not automatically considered jointly owned unless titled in joint names. In the event of divorce, the courts typi - cally apply equitable distribution principles, dividing marital property fairly, though not necessarily equally, and providing spousal support in the form of alimony. Property acquired before marriage, by gift or by inher - itance is generally treated as separate unless com - mingled, but the appreciation on separate property during the marriage as the result of the efforts of one of the parties is generally considered a marital asset. Controlling the marital rights in the event of divorce and in the event of death through a marital agreement may be advisable for a high net worth individual or member of a high net worth family. Family trusts are increasingly considered by a family court in the event of a divorce when dividing marital property and grant - ing support rights. Community Property Regime In community property states, assets acquired dur - ing the marriage are considered owned equally by the spouses and are typically divided equally upon divorce or death. One spouse generally cannot transfer community property without the other spouse’s consent. In some states, this includes restrictions on transferring or encumbering a primary residence. Some common law states have enacted the Uniform Disposition of Community Property Rights on Death Act, which would preserve the rights of a surviving spouse in community property held under the laws of another jurisdiction, which may include the laws of a foreign jurisdiction.
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