Our system does not restrict you from naming a trustee who is a non-U.S. Citizen or a U.S. Citizen who resides in another country however the system requires a U.S. mailing address and (U.S. phone number or Email address) when naming trustees. If entering a foreign person, use your own home address or a U.S. address that is aligned with that individual. It's expected that people move so the address in the system is just a reference and not a legal requirement. The address will not be listed in the Will or the Trust - it's made available to your executor to aid them in locating that person. You can give additional contact details in our Instructions to Advocates section.
If a trust names a non-U.S. Citizen or a U.S. Citizen who resides in another country as a Successor Trustee, the trust could be considered a “foreign trust” by the IRS.
- One of the big negatives with the foreign trust rules is that any income from non-U.S. sources, as well as capital gain income, is deemed under the tax laws to be part of any taxable income distributed to a U.S. beneficiary.
- Additional reporting obligations are triggered with “foreign” trusts. Hefty penalties are imposed for failure to comply.
- Adverse tax consequences of a foreign trust can include recognition of capital gains and mandatory withholding by the IRS.
See IRS information on foreign trusts: https://www.irs.gov/businesses/international-businesses/foreign-trust-reporting-requirements-and-tax-consequences