U.S. vs. offshore trusts for foreign buyers of NYC real estate

Full transcript

0:10 Hi, I’m Max Dilendorf. In the last video, I explained how foreign buyers use trusts to optimize U.S. estate taxes on New York real estate.

0:23 Today, let’s talk about how these trusts are actually structured and managed, and whether you should consider a U.S. trust or an offshore trust, based on your goals and family situation.

0:36 First, how is a trust managed? It’s not just one person running the show — a trust functions as a team. You typically have: • An Administrative Trustee, who handles logistics — paying property taxes, maintaining the property, handling legal compliance • An Investment Trustee, who manages the trust’s assets, like rental income or reinvestment decisions • And a Protector, who acts as an overseer — they can replace trustees, step in when needed, and ensure your intentions are respected over time This team approach creates checks and balances and helps preserve the trust’s independence — something the IRS looks at very closely.

1:24 Now, let’s talk about where to set up the trust.

1:26 If you’re a foreign buyer creating a trust for U.S.-based beneficiaries, such as your children or grandchildren living in the U.S., then a U.S. domestic trust — in a trust-friendly state like Nevada, Wyoming, or Delaware — is usually the best choice.

1:46 These states offer favorable trust laws, no state income tax, and long-term control flexibility.

1:55 But if neither you nor your beneficiaries reside in the U.S., then an Offshore Trust — in places like the Cayman Islands, BVI, or Cook Islands — may offer better privacy, asset protection, and planning flexibility. Either way, setting up a trust takes time.

2:13 You don’t want to rush it after you’ve already signed a contract. The setup process involves: • Drafting the trust documents • Appointing and onboarding the trustee • Opening a bank account in the name of the trust • Funding the trust — typically with offshore capital • And often, Forming a holding company under the trust that will own the U.S. real estate Altogether, this takes anywhere from four to eight weeks. That’s why we emphasize: plan ahead. Once you’ve signed a contract or bought the property in your personal name, restructuring becomes more complicated and often not viable. To recap — a properly structured trust, set up early and managed independently, can: • Eliminate U.S. estate tax exposure • Protect your investment • Provide asset security and privacy • And allow you to pass real estate to future generations tax-efficiently But success comes down to structure, timing, and the right professionals guiding the process.

3:25 If you're a foreign investor planning to buy real estate in New York, don’t wait. Reach out early, plan smart, and protect your legacy. Thanks for watching. Subscribe for more legal strategies, tax planning tips, and smart ownership solutions for international buyers in the Manhattan market. I’ll see you in the next video.

A transcript of the recording, so it reads as speech rather than as prose. It explains the law in general terms and is not advice on your own situation, which turns on facts this video cannot know.