In recent years, many American Citizens have shown willingness to move to Italy, but many of them don't know how to do it and want to understand the pros and cons before making the move.
In many cases, these US citizens need to reshape their estate strategy by setting up a US Trust or by reinstating the ones they have.
Our Tax & Legal firm has put together a team of professionals who are able to give American citizens assistance from A to Z during their process of moving to Italy.
In this post, we will introduce the team and explain how we work.
1. MOVING TO ITALY: A STRATEGIC APPROACH
When we talk about moving to Italy from the US, there are many questions that spontaneously arise:
- What will be the taxation in Italy if I move there and become tax resident?
- Can I get an Italian tax break?
- Should I ask for an Elective Residence Visa?
- Can I keep my financial investments in the US?
- Do I need a will?
- Should I make a new trust?
- Should I restate the trust I have?
- What will happen to my IRA, Roth IRA and 401K?
We have previously replied to these questions, but considering them is always important in order to understand the specificities of the client and guide them in identifying the right time to move to Italy.
You can find these answers in the sections below:
Our strategic approach is simple and can be summed up in four points:
a) WE GIVE TOTAL SUPPORT
We give American citizens or families who want to move to Italy assistance from A to Z to by explaining how things work in the country, answering all questions that arise in the process, and resolving any doubts without imposing time constraints.
b) WE HELP THE US CITIZEN IN THE DECISION-MAKING PROCESS
For us, the decision-making process is extremely important, as we are perfectly aware that the timing of the decision can vary a lot from individual to individual: our goal is to patiently guide the US citizen in the whole decision-making process.
c) WE HAVE TECHNICAL KNOWLEDGE OF BOTH COUNTRIES
In this approach, it's fundamental to understand both American and Italian juridical and tax profiles. It's particularly important to understand that it's not enough to connect the American CPA or lawyer with the Italian professionals: language barriers, cultural differences and lack of specific knowledge of the other country by the professionals involved can lead to mistakes and poor strategic planning.
d) WE OUTLINE A STRATEGY
Our time horizon is 10 years: we make a strategy and create a plan such that our clients feel comfortable with the choices they make in the long run.
2. OUR "MOVING TO ITALY" TEAM
Meet our "Moving to Italy" team:
A) The US Lawyer: IRINA HOVERSTEN
Irina Hoversten is an American attorney who works for the Legal Firm Jeffer Mangel and Mitchell LLP based in Los Angeles.
Irina Hoversten's practice is concentrated in estate planning and taxation matters. She has experience assisting clients with all aspects of estate and tax planning, including advising clients on business succession.
Irina takes a strategic planning approach to ensure her clients’ goals are efficiently satisfied. Irina further guides clients through the probate and trust and administration process.
Irina is not only highly responsive and efficient in her approach, but also flexible in adapting to the new challenges that an international strategy requires.
You can find more information about Irina Hoversten here:
B) The US CPA: WILLIAM WU
William Wu is an American CPA who works for the Tax Firm Gursey Schneider LLP based in Los Angeles.
William Wu is a Partner in the Tax Department at Gursey Schneider LLP, where he specializes in High-Net-Worth Individuals, trusts, and estates. William is recognized for his proactive client management and passion for helping families achieve their wealth transfer goals with effective and tax efficient strategies. Additionally, his unique expertise in navigating the intricacies of middle market dynamics has made him an invaluable leader in our tax practice.
William is extremely knowledgeable and skillfully solves difficult tax problems that often arise in international taxation. He also finds solutions that are compatible with Italian tax and legal aspects.
You can find more information on William Wu here:
C) The Italian CPA: ENRICO POVOLO
Our Tax&Legal Firm creates a "bridge" in the consultation process between Italy and the US: our expertise and knowledge of the tax and juridical aspects of both countries and the professional collaboration with Irina and William have enabled us to create a cross-border consultation between Italy and the US.
You can find more information on our Tax & Legal Firm here:
3. SETTING UP A US TRUST
When we outline an Estate strategy for a US Client who moves to Italy, one of the most important tools is setting up a US Trust.
US Trusts must be adapted to the client and to the fact that the grantor, the trustee or the beneficiaries of the US Trust have moved or could move their tax residence to Italy.
Italy has a different way of handling trusts from a tax standpoint than the US, nevertheless, there are many interesting and safe opportunities to consider when making an estate planning with US Trusts.
In this field we can provide a comprehensive consultation to evaluate all aspects from the Italian and the American points of view.
These are some of the most common cases of US-Italian estate planning with trusts:
US LIVING TRUST
The grantor has passed away and the beneficiaries live in Italy.
What is the Italian taxation for the beneficiaries?
US LIVING TRUST
The grantor has decided to move to Italy.
What are the tax consequences for the grantor?
Does he/she need to restate the Living Trust?
What happens if the grantor passes away while they are an Italian tax resident?
What if the beneficiaries live in Italy or in the US?
US IRREVOCABLE TRUST
The grantor has decided to move to Italy.
What are the tax consequences for the grantor?
What happens if the grantor passes away while they are an Italian tax resident?
What if the beneficiaries live in Italy or in the US?
Do the beneficiaries have to pay Italian Estate Tax on the distributions from the Trust?
US NON-GRANTOR TRUST
The trustee is a US Person who has discretionary power over the distributions for the beneficiaries: do the beneficiaries have to pay taxes in Italy?
Is there something like the Income Distribution Deduction in Italy?
What happens at the end of the life of the Trust?
4. THE PROCESS, STEP-BY STEP
Our team can provide assistance with the answer to these questions and give support through the entire process.
This is the process step-by-step:
- first contact and assessment of the situation and the wishes of the grantor;
- our team suggests the structure of US trust that is most suitable for the family;
- we have several appointments/videocalls with all the family members to understand what the grantors wishes for all the different scenarios;
- we focus on the tax side of the Trust: what are the US and Italian tax implications?
- we then focus on the financial and investment side of the Trust.
- we let the client/family think and absorb all the information connected with this new possibility;
- we make a new round of appointments/videocalls in order to clarify all doubts and questions, also to single member of the family if necessary.
- we start the drafting of the US Trust and send it to the family members;
- if it's possible, we ask for the opinion of the Trustee, if it's Trust Company or a Professional Trustee;
- we finish the process with the signature.
5. DO YOU NEED A PROFESSIONAL TRUSTEE OR AN INDEPENDENT TRUST COMPANY?
In case it's required by the client, we can also provide a list of independent Professional Trustees or Trust Companies in California, Nevada, New York and several other States in America.
These Trustees are all:
- independent Trustees: this is a very important point, as we suggest no connection between the Trustee and the Financial Advisors or Wealth Managers of the Trust.
- extremely competent: they have a perfect understanding of their duties and they know that the Trust accounting is extremely important, not only for US tax purposes, but also for Italian tax purposes.
- able to do teamwork: international Trusts are something different, that need all professionals involved to be able to be on the same page and be focused on the big picture.
CONTACT US FOR MORE INFORMATION
For more information or to schedule a free videocall, write to
enrico.povolo@dottcomm.net
or call the following number:
+39 0444 322987
Enrico Povolo