​​​​​​Pre-Immigration Tax Plan





Pre-immigration DOTs have long been used by practitioners as an effective technique to reduce estate tax. However, by combining the DOT with a PPLI policy practitioners can turn the DOT into a tool that reduces both estate as well as income taxes.

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Given the worldwide reach of U.S. taxation, individuals contemplating moving to the U.S. should seek advice on pre-immigration planning that can minimize their tax exposure once in the U.S. If your present country taxes a gift or a sale, do it after you have left, but before you become a U.S. taxpayer. Perhaps establish a presence in a tax haven and while there, sell your assets and later repurchase them there with a higher basis for U.S. tax purposes. This eliminates U.S. tax on appreciation when you later sell in the U.S.  DOTs should not be funded with all the your assets to avoid an inference that you expected to have access to such funds after moving to the U.S. Doing so could cause the assets to be included in  your U.S. estate. 

A DOT protects assets from U.S. transfer taxes but does not shield those asset’s from U.S. income tax once you immigrate to the U.S. This is where PPLI can come into play. PPLI relieves you of the burden of paying the DOTs income tax after you move to the U.S. A DOT that you fund before immigrating combined with PPLI can be quite attractive. PPLI within a DOT enables the dropped-off assets to grow income tax free, receive a stepped-up tax basis and upon the death of the insured, avoids U.S. estate tax. 

A  PPLI Policy Within A Drop-Off Trust ("DOT") Set Up Prior To Immigration, Enables The Dropped-Off Assets To Grow Income Tax Free, Receive A Stepped-Up Basis Upon The Death Of The Insured, And Avoid U.S. Estate Tax.

​​​​​​​​​Asset Protection, Tax Protection And Privacy​​

  • Litigation. The PPLI’s investments are protected from liabilities from other policy holder’s accounts and the claims of your creditors or lawsuits.
  • Reinsured. The insurance risk is re-insured with major U.S. companies. 
  • Privacy. Trusts provide privacy by moving your ownership of assets to the Trust. For clients that want total privacy, we place a Limited Power of Appointment in the trust.
  • Loans. Loans from your PPLI are tax-free even after you become a U.S. taxpayer.
  • Keep Your Assets Intact.You need not pay the premium of the PPLI policy in cash. You can pay "in Kind". Your business interests, real estate, collectibles, etc. can be kept intact and distributed "in kind" to your heirs.
  • Investment Manager.Your chosen investment advisor can manage the PPLI’s assets. 

​​Pre-Immigration Tax Planning