Financial Institutions and Corporate Trustees
The determinations a US institution makes when a foreign element enters an account: a holder who dies abroad, a payment or distribution to a person abroad, a beneficiary with a foreign address, an estate or a trust as account holder.
Law stated as of October 2026
In brief.
- Shares of US corporations held for a nonresident decedent are US-situs property for the estate tax, wherever the account is kept. Bank deposits not connected with a US trade or business are not.
- Before releasing US-situs property of a nonresident decedent, a custodian protects itself against liability for the estate tax by obtaining a transfer certificate, unless an exception applies.
- No certificate is required where the US-situs gross estate, adjusted for prior gifts, does not exceed USD 60,000. A convention that eliminates the tax does not eliminate the clearance.
- US-source fixed or periodical income paid to a foreign person bears 30 percent withholding unless a valid Form W-8 supports a reduced treaty rate.
- A trustee or executor who distributes to a beneficiary abroad is the withholding agent for that distribution and is liable for tax it should have withheld.
A Guide for Custodians and Other Withholding Agents. About 340 pages. To be published in mid-January 2027; USD 150.
Pre-orderThe firm advises institutions on individual files and on the procedures behind them. Its attorneys are licensed in Washington DC, Maryland, Virginia, California and Germany, and the firm has a federal tax practice; the treaty position is the starting point of each determination, and the statutory rule applies where no convention reaches the case.
Send a file for review →Situations at the counter and in the trust department
An account holder resident abroad has died
A distribution goes to a beneficiary abroad
US securities are held for a nonresident
An estate or a trust is the account holder
The bank is trustee of a QDOT
An inherited IRA is payable to a nonresident
A foreign estate sells US real estate
A client gives up citizenship or a green card
Determinations the firm makes on a file
Each determination is delivered as a short written determination that states the facts relied on, the authority and the result, so that the file shows why the institution acted as it did.
| Question | Authority | What the firm delivers |
|---|---|---|
| Was the decedent domiciled in the United States, or a nonresident? | Treas. Reg. § 20.0-1(b)(1); the domicile article of the convention | Domicile determination with the facts on which it rests |
| Which assets in the account are US-situs property? | §§ 2104 and 2105; the situs article of a domicile-type convention | Situs schedule, asset by asset |
| Is a transfer certificate required before release? | Treas. Reg. § 20.6325-1; § 6324 | Release memorandum, or the route to the certificate |
| Which treaty article and rate apply to a payment? | § 1441; the income tax convention; Treas. Reg. § 1.1441-6 | Treaty determination with a review of the Form W-8 |
| Who may sign for the estate abroad? | The law of the decedent’s last domicile | Review of the foreign grant, certificate or deed, with a translation note |
| How is an estate or trust classified under FATCA? | Chapter 4 and the regulations | Classification memorandum and the form to collect |
The other side of the counter
Executors appointed abroad, and US executors of estates with heirs abroad, deal with the same institution from the other side. The firm acts as counsel to executors and administrators in Washington DC, Maryland, Virginia and California, coordinates ancillary proceedings in other states, and prepares Form 706-NA and the request for the transfer certificate.
Material for institutions and trustees
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Guides for operations, tax and trust staff
Classification of Payments to Foreign Persons as FDAP Income or Effectively Connected Income
52 pages. Updated in September 2026.
Purchase $100 →
Withholding on Dividends, Substitute Dividend Payments and Dividend Equivalents
24 pages. Updated in September 2026.
Purchase $100 →
FATCA Classification of Trusts and Estates as FFIs or NFFEs
32 pages. Updated in September 2026.
Purchase $100 →
Backup Withholding, TINs and the ITIN Requirement for Foreign Beneficiaries
24 pages. Updated in September 2026.
Purchase $100 →Send the file before the release
A short description of the account, the holder’s last residence and citizenship, and the documents received so far is enough for the firm to say what is needed and what it will cost.
