Domestic Trust. The Trust shall at all times be maintained as a domestic trust in the United States.
Domestic Trust. The Trust shall be maintained at all times as a domestic trust in the United States and shall be at all times qualified under section 401(a) of the Code, or any successor provision thereto, and exempt from federal income taxation under section 501(a) of the Code, or any successor provision thereto, as long as any assets of a Plan are held by a Trustee hereunder.
Domestic Trust. THE TRUST SHALL AT ALL TIMES BE MAINTAINED AS A DOMESTIC TRUST IN THE UNITED STATES. 1.7. TRUSTEE NOT RESPONSIBLE FOR ENFORCING CONTRIBUTIONS OR FOR SUFFICIENCY. THE TRUSTEE SHALL HAVE NO RESPONSIBILITY FOR ENFORCING PAYMENT OF ANY CONTRIBUTION TO THE PLAN, FOR THE TIMING OR AMOUNT THEREOF, OR FOR THE ADEQUACY OF THE TRUST FUND OR TO MEET OR DISCHARGE ANY OR OTHER LIABILITIES OF SUCH PLAN.
Domestic Trust. The Court Test A trust satisfies the court test under a safe harbor (Reg. §301.7701-7(c)(1)) if • the trust instrument does not direct that the trust be administered outside of the U.S.; • the trust in fact is administered exclusively in the U.S.; and • the trust is not subject to an automatic migration provision. Domestic Trust - The Court Test • Administered in the U.S. means all steps necessary to carry out the duties imposed by the terms of the trust and applicable law including maintaining the records of the trust, filing tax returns, managing and investing trust assets, defending the trust from suits by creditors, and determining the amount and timing of distribution must be performed in the U.S. Treas. Reg. §301.7701-7(c)(3)(v). • If both a U.S. court and a foreign court are able to exercise primary supervision over the administration of the trust, the trust meets the court test. Treas. Reg. §301.7701- 7(c)(4)(i)(D). • The trust is subject to automatic migration provision if the trust document provides that a U.S. court’s attempt to assert jurisdiction or otherwise supervise the trust directly or indirectly would cause the trust to migrate from the U.S. Treas. Reg. §301.7701- 7(c)(4)(ii). Domestic Trust – The Court Test Example: A U.S. citizen, creates a trust for A's own benefit and the benefit of A's spouse, B, a United States citizen. The trust instrument provides that the trust is to be administered in State Y, a state within the U.S., by DC, a State Y corporation. The trust instrument also provides that in the event that a creditor sues the trustee in a U.S. court, the trust will automatically migrate from State Y to Country Z, a foreign country, so that no U.S. court will have jurisdiction over the trust. A court within the U.S. is not able to exercise primary supervision over the administration of the trust because the United States court's jurisdiction over the administration of the trust is automatically terminated in the event the court attempts to assert jurisdiction. Therefore, the trust fails to satisfy the court test from the time of its creation and is a foreign trust. Domestic Trust - The Control Test A trust satisfies the Control Test if one or more U.S. persons have the authority to control all substantial decisions of the trust. Treas. Reg. §301.7701-7(d) • U.S. Person: The term U.S. person means a U.S. person within the meaning of Code §7701(a)(30). For example, a domestic corporation is a U.S. person, regardless of whether its s...
