Board Certified, Estate Planning and Probate Law - Texas Board of Legal Specialization
Av Preeminent rated, Martindale Hubbell
Because of the lack of confidence in recovery of Japanese economy, many are contemplating or already undertaking:
However, this move has created the unique situations and needs for those who wish to immigrate to the U.S.
Q1: Have you thought about situations concerning:
Q2: Have you thought about consequences of owning assets in the U.S. such as:
The United States is a totally different society. You are in the U.S. legal environment, which is a distinct environment from the Japanese legal environment. You cannot rely on the Japanese way of doing things here.
Moreover, your immediate family members are not around you to help you.Even if you do have members around you or able to come from Japan, it is a difficult task for anybody to handle all the legal problems after the event.
Life time planning (See. Iroha 10/99) and having a Will (See. Iroha 9/99) are certainly helpful to you, but in some instances they might not work well for you.
Here, Trusts (See. Iroha 5/00) can be very useful tool.
When person dies, you have to go though probate proceeding, which is a court procedure. Such a proceeding may be time consuming, inconvenient especially for non-locals, and sometimes expensive (particularly if the Will is not a Texas Will, or if there is no Will).
Probate performs 3 functions:
When a person dies, and probate is necessary, the first step is the appointment of a personal representative to oversee the winding up of the decedents affairs.
The principal duties of the personal representative are:
The will should first be probated, or letters of administration should first be sought, in the jurisdiction where the decedent was domiciled at the time of death. This is known as the primary or domiciliary jurisdiction.
If real property is located in another jurisdiction, ancillary administration in the jurisdiction is required.
Warning: Probate is a local proceeding. Thus, if you have properties in multiple jurisdictions, things can get complicated.
To avoid probate is one reason you should consider setting a trust instead of just having a simple will and life time planning documents, especially if property is owned in more than on jurisdiction in the United States.
Extremely technical rules apply to aliens who own property in the U.S. subject to the estate tax. These rules are different for resident and non-resident aliens, with non-residents being at a substantial disadvantage if appropriate tax planning has not been implemented. Trusts can greatly facilitate transfer tax planning, especially if implemented before property is brought into the U.S.
With a spendthrift clause, the beneficiarys interest is not transferable, therefore, is not reachable by creditors. Except:
If a trust is revocable, Settlors creditors can reach the entire trust property even if the settlor does not reserve any beneficial interest.
The personal creditor of the a trustee cannot reach the trust property. Thus, if outright gift, creditor has the right to claim, and donees are not protected.
That is why it is important to set up a trust by first generation (grandparents), so that creditor of second (parents) and third (grandchildren) generation as beneficiary or trustee cannot get to it.
A Trust can provide a simple mechanism (versus business entities) for consolidating property management.
A Trust can protect survivors from others or themselves.
A Trust can avoid problems in managing property by minors, those who are disabled, or others without legal capacity to act, avoiding court supervised guardianship of property.
In Japan, "Your assets will diminish after the three generations. (Properties are not for you to keep.)"
In U.S., "You may keep - and control - your assets within three generations."
Since World War II, there has been an enormous increase of private wealth in the United States. In addition to the recent explosion of wealth creation among high tech generations in the U.S., the wealth created overseas have been brought into the U.S through the foreigners moving to the U.S. as well. They are the foreign executives running U.S. companies or subsidiaries of foreign companies, the wealthy individuals retiring, and the younger generations with substantial inheritance working for the employer. With this increase in wealth, a great many more people have needs for property management that are best met through creation of trust.