How France Taxes US Living Trusts
October 20, 2026
A US living trust can create unexpected French tax and reporting consequences. Here is what to review before you move, and before you unwind it.
─────────────────────────────────────────────────
HOW DOES FRANCE TREAT US LIVING TRUSTS?
─────────────────────────────────────────────────
A US living trust can create unexpected French tax and reporting consequences. Whether and how much tax applies to a distribution or an unwinding depends on the nature of the amounts received, original contributions, accumulated income, and realized gains, and on the supporting records available to document them.
─────────────────────────────────────────────────
WHAT HAPPENS IF YOU UNWIND A TRUST AFTER BECOMING A FRENCH TAX RESIDENT?
─────────────────────────────────────────────────
It requires careful analysis rather than a single blanket rule. The tax treatment depends on how much of the trust's value represents original contributions versus accumulated income or realized gains, and on whether the trust's records can actually document that distinction. Reviewing the trust before a move, and before any decision to unwind it, is essential.
─────────────────────────────────────────────────
IS FRENCH TAX RESIDENCE DETERMINED BY A 183-DAY COUNT?
─────────────────────────────────────────────────
No, not alone. French tax residence requires an analysis of French domestic rules and, where relevant, the France-US tax treaty, including a person's homes, personal and economic ties, and pattern of living. A day count is one data point among several, not a standalone test.
─────────────────────────────────────────────────
CAN YOU ASK FRENCH TAX AUTHORITIES TO CONFIRM YOUR TAX POSITION IN ADVANCE?
─────────────────────────────────────────────────
In appropriate cases, yes. A taxpayer can request a formal written position from French tax authorities on a clearly defined situation. The protection this provides depends on the response received and the accuracy of the facts presented, it is not a guarantee of a favorable outcome or a fast turnaround.
─────────────────────────────────────────────────
SHOULD YOU REVIEW YOUR ESTATE PLAN BEFORE MOVING TO FRANCE?
─────────────────────────────────────────────────
Yes, and the goal is coordination, not necessarily a full redesign. A common mistake is treating a move as a checklist item for the old state's estate plan rather than reviewing whether that plan, and any trust it includes, will function as intended under France's rules.
─────────────────────────────────────────────────
CHAPTER TIMESTAMPS
─────────────────────────────────────────────────
00:00 - Why a French tax lawyer builds his practice around US-connected clients
05:25 - The planning gap FATCA created between US and French systems
08:23 - The common mistake of optimizing your old state's plan instead of coordinating with the new one
19:03 - How France treats US living trusts
23:15 - Requesting a formal written position from French tax authorities
25:36 - Why French tax residence is not just a day count
─────────────────────────────────────────────────
ABOUT THE GUEST
─────────────────────────────────────────────────
Thomas Dubanchet is a French tax lawyer admitted to the Nice Bar and founder of Bespoke, a French tax law firm advising US-connected individuals and families on relocation, French tax residence, trusts, and estate planning. He works with clients' US tax and legal advisers to coordinate planning across both countries. He is a member of the Passport To Wealth® Directory.
─────────────────────────────────────────────────
ABOUT YOUR HOST
─────────────────────────────────────────────────
Arielle Tucker, CFP® & IRS Enrolled Agent with Connected Financial Planning, is a cross-border financial planner based in Switzerland helping Americans living abroad navigate U.S. taxes, international investments, and cross-border financial planning.
─────────────────────────────────────────────────
ABOUT PASSPORT TO WEALTH®
─────────────────────────────────────────────────
Passport To Wealth® is the platform for current and aspiring US expats looking for trusted, fiduciary support. We connect globally mobile Americans with expert, licensed cross-border financial advisors, tax professionals, and relocation experts who understand the financial and legal complexities of life abroad. For guidance tailored to your specific situation, book a paid expat expert consultation today.
─────────────────────────────────────────────────
LINKS & RESOURCES
─────────────────────────────────────────────────
- Order The Expat Money Playbook (Wiley): https://www.passporttowealth.com/expat-money-playbook
- Subscribe to Our Monthly Newsletter: https://www.passporttowealth.com/contact
- Instagram: https://www.instagram.com/passporttowealthofficial
- LinkedIn: https://www.linkedin.com/company/passport-to-wealth
- Find Thomas Dubanchet in the Passport To Wealth® Directory: https://www.passporttowealth.com/thomas-dubanchet
─────────────────────────────────────────────────
This episode is for educational purposes only and does not constitute tax, legal, or financial advice. Individual circumstances vary. Consult a qualified cross-border financial professional before making any financial or tax decisions.