Text or WhatsApp (808) 600-9260

Trust basics for U.S. citizens

14 foundation articles that define what a trust is, how U.S. and international rules classify trusts and how reporting standards work.

All articles

FATCA and the structure of U.S. reporting rulesFATCA terms, institutional reporting, withholding rules and links to U.S. tax forms, including Form 8938, for U.S. citizens learning about the regime.Government trust registers: the UK regime explainedThe UK's Trust Registration Service records beneficial ownership of trusts, including trust roles, registration information and ongoing record updates.Grantor trust rules in sections 671 to 679A reference for U.S. citizen readers on grantor trust definitions, ownership tests, foreign trust beneficiaries, and statutory links to U.S. reporting rules.How income tax treaties are structuredIncome tax treaty terms and structure, related U.S. reporting for U.S. citizens, the OECD Model Tax Convention description and IRS guidance on treaty positions.How the IRS classifies trusts for U.S. tax purposesU.S. trust classification for tax purposes: ordinary and investment trusts, U.S. person status, and the environmental remediation trust rule in the regulations.Section 6048 reporting for certain foreign trustsSection 6048 foreign trust reporting for U.S. citizens, including definitions and reportable events, as well as ownership and distributions and the IRS forms.Section 679 and foreign trusts with U.S. beneficiariesSection 679 covers ownership treatment, U.S. beneficiaries, transfer exceptions and related reporting rules for foreign trusts connected to U.S. citizens.Settlor, trustee and beneficiary rolesTrust structure and the roles of settlors and of trustees, and of beneficiaries, tied to the IRS instructions for Form 3520 that apply to U.S. citizens.The court and control tests for foreign trustsThe court test and the control test classify a trust as domestic or foreign, and foreign trust status connects to U.S. reporting rules for U.S. citizens.The FBAR: reporting foreign financial accountsFBAR reporting for U.S. citizens covers foreign financial accounts, the reporting threshold and filing exceptions, as well as submission and recordkeeping.The Hague Trusts Convention explainedThe Hague Trusts Convention addresses which law governs a trust and how a trust is recognized, while preserving each state's fiscal powers over trusts and tax.The OECD Common Reporting StandardThe Common Reporting Standard sets rules for financial account reporting and the annual exchange of that information between jurisdictions, for U.S. citizens.Uniform trust laws in the United StatesFour Uniform Law Commission trust law resources for U.S. citizens, with a listing of each resource's documents and the instructions for accessing them.What a trust means under U.S. and international lawTrust terms and structure, the Hague Convention's rules, and U.S. tax classification and limited reporting rules, all explained plainly for U.S. citizens.

Talk to Richard

Domestic or foreign: the two tests

For U.S. federal tax purposes, a trust is domestic only when it satisfies both the court test and the control test. The court test concerns U.S. court supervision, while the control test concerns U.S. persons controlling all substantial trust decisions. If either test is not met, the trust is foreign for these purposes.[1][2]

Worked illustrations

Applying both classification tests

Illustration: A U.S. court can exercise primary supervision over the trust's administration, but U.S. persons lack authority to control all substantial decisions of the trust. Because the trust must satisfy both tests to be domestic, it is classified as foreign for U.S. federal tax purposes.[1][2]

Relevance for U.S. citizens

The classification tests connect a trust's legal and decision making arrangements to its U.S. tax status. Section 6048 distinguishes reporting by U.S. owners of foreign trusts from reporting by U.S. persons receiving foreign trust distributions.[1][3]

Related reading

A trust that fails either the court test or the control test is a foreign trust for U.S. tax purposes: The court and control tests for foreign trusts. Related trust and reporting terms are defined in the Glossary of trust and U.S. reporting terms. Information reporting for foreign trusts falls under Section 6048. The IRS publishes its own guidance on these filings: IRS Foreign Trust Reporting Requirements.

Related glossary terms

  • Substantial decisions: Substantial decisions under a trust include nonministerial choices about distributions, beneficiaries, income, principal, trustee changes, and investments.
  • Trust: The Hague Convention describes a trust as a relationship in which a settlor places assets under a trustee's control for beneficiaries or a specified purpose.
  • U.S. owner of a foreign trust: The Form 3520 instructions define a U.S. owner as a person treated as owning trust assets under grantor trust rules. Ownership can apply to part of a trust.

Related articles and guides

Tools and official documents

  • Foreign trust reporting role finder: Tick the roles that describe a connection to a foreign trust or foreign account to see the forms the IRS and FinCEN instructions discuss. Roles can overlap.
Sources and data notes
  1. nortonrosefulbright.com, Foreign nongrantor trusts for US beneficiaries, Trusts & Trustees (2022). https://www.nortonrosefulbright.com/en-us/-/media/files/nrf/nrfweb/publications/foreign-nongrantor-trusts-for-us-beneficiaries.pdf?revision=65fbd165-bf5e-441b-9654-240142f95abb&revision=65fbd165-bf5e-441b-9654-240142f95abb. Retrieved .
  2. irs.gov, Instructions for Form 3520-A (12/2025) | Internal Revenue Service. https://www.irs.gov/instructions/i3520a. Retrieved .
  3. law.cornell.edu, 26 U.S. Code § 6048, Information with respect to certain foreign trusts. https://www.law.cornell.edu/uscode/text/26/6048. Retrieved .

Dates in this block record when each source was read for this page.