U.S. Trusts for International Families: Security First

A family in Dubai, São Paulo or Singapore decides to move part of its wealth into a United States trust. The traditional first questions are about tax and which state’s law to choose. Dilendorf Law Firm, a New York-based firm that represents non-U.S. families establishing trusts in South Dakota, Wyoming and Delaware, now asks a different first question: who will hold the keys to the assets, and how well are those keys protected?

Why trustee security now comes before tax planning

The numbers explain the shift. The FBI’s Internet Crime Complaint Center logged 1,008,597 complaints and $20.877 billion in reported losses in 2025, a 26 percent increase from 2024, with complaints arriving from more than 200 countries [1].

On June 22, 2026, the leaders of the Five Eyes cyber agencies, including the NSA, warned that AI “lowers barriers for malicious actors and increases the speed and complexity of attacks,” and put it bluntly: “The timeline is not years, it is months” [2].

The FBI has already documented criminals who “obtain access to bank accounts using AI-generated audio clips of individuals and impersonating them,” and who clone “a loved one’s voice” to demand urgent transfers [3].

For a trust, every one of those threats converges on the trustee. The trustee holds custody, receives instructions and sends the wires.

A criminal who can convincingly impersonate the settlor to the trustee, or who compromises the trustee’s own email, never needs to defeat an asset protection statute.

That is why, for our international clients, selecting the trustee is now the first decision, ahead of tax structuring and corporate formalities.

What we require from a trustee

Security controls, in writing. CISA calls phishing-resistant multifactor authentication “the gold standard,” notes that SIM swap attacks “are not applicable” against it, and “strongly urges” high-value targets to adopt it [4].

The NSA’s September 2026 cyber hygiene guidance, written specifically for AI-enhanced targeting, prioritizes network inventory, multifactor authentication, patching, segmentation and continuous monitoring [5]. We ask prospective trustees to show us how they meet those benchmarks.

Insurance that matches the assets. We have reviewed trust companies carrying $5 million in cyber coverage while administering many multiples of that for clients. A policy that cannot absorb a single large loss is not protection; it is a disclosure item.

A secure instruction protocol from day one. The FBI’s advice to individuals applies to fiduciaries: “Verify the identity of the person calling you by hanging up the phone, researching the contact of the bank or organization purporting to call you, and call the phone number directly” [3].

A capable trustee gives the family a written protocol at onboarding covering verified channels, call-backs on pre-registered numbers, and what will never be accepted by email alone. The guidance should come from the trustee, before the first wire, not after the first incident.

Trust language that makes the duty explicit. State law already provides a baseline. Wyoming’s trust code states: “A trustee shall take reasonable steps to take control of and protect the trust property” [6].

We build on that baseline with express provisions requiring the trustee to maintain defined security controls and insurance, follow verification procedures for distributions and changes of contact information, and notify the family promptly of any account takeover or attempted impersonation.

Choosing among South Dakota, Wyoming and Delaware

Each state protects a properly structured self-settled trust, but each sets its own conditions.

In South Dakota, no creditor action may reach a qualified disposition “unless the settlor’s transfer of property was made with the intent to defraud that specific creditor,” the creditor bears the burden of proof by clear and convincing evidence, and South Dakota courts have exclusive jurisdiction [7].

Wyoming’s qualified spendthrift trust must state that it is one, incorporate Wyoming law and be irrevocable, and the settlor signs an affidavit confirming the transfer will not render the settlor insolvent and is not intended to defraud creditors [6].

Delaware requires a qualified trustee that is a Delaware resident or a supervised institution and that maintains custody or records in the state, with the Court of Chancery holding exclusive jurisdiction over any action [8].

For a non-U.S. family, the choice is also a choice of forum. The state whose court will hear a creditor’s challenge, and whose regulators supervise the trustee, matters as much as the statute’s headline protections.

The tax question: domestic or foreign trust

Under Treasury regulations, a trust is a United States person only if a U.S. court “is able to exercise primary supervision over the administration of the trust” and one or more U.S. persons “have the authority to control all substantial decisions”; “the term foreign trust means any trust other than a domestic trust” [9].

Who serves as trustee, protector and adviser therefore decides the trust’s U.S. tax status, and with it the filing obligations of the trust and its beneficiaries.

We design that outcome deliberately with the family’s home-country advisers, rather than letting it follow from an unexamined choice of fiduciaries.

This article is for general informational purposes only and does not constitute legal or tax advice. Reading it does not create an attorney-client relationship with Dilendorf Law Firm. Attorney Advertising.