Saturday, May 29, 2021
Thomas P. Gallanis recently published an article entitled, Asian Wealth in the United States: Some Legal Answers and Policy Questions, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article:
Private wealth in Asia is substantial. In 2019, the Asia-Pacific region had approximately 6.5 million high net worth individuals (HNWIs) with investable assets of approximately US$22.2 trillion. This represented approximately 33 percent of the global population of HNWIs and approximately 30 percent of global HNWI investable wealth. These percentages are larger than the corresponding percentages for any other region. In second place was North America, which had approximately 32.1 percent of the global HNWI population and approximately 29.3 percent of global HNWI investable wealth. The largest markets in the Asia-Pacific region are Japan and China, with HNWIs numbering approximately 3.4 million in Japan and approximately 1.3 million in China.
Private wealth often is invested internationally. Such wealth is known as ‘outbound’ wealth from the perspective of the country of origin and ‘inbound’ wealth from the perspective of the country of destination. The US is both a source of outbound wealth and a destination for inbound wealth.
This paper, prepared for a conference on ‘Asian Wealth in the Global Context’, is about Asian wealth in the United States. Such a broad topic, however, must be narrowed in order to become manageable in one essay. This paper explores the use of US law and legal institutions to transmit private wealth by individuals who are citizens and residents of Japan or China, the nations in Asia with the greatest number of HNWIs. The wealth transmission examined here occurs in the form of a donative transfer at death, typically within the family and often across generations.
This paper proceeds in two main parts. The first focuses on the current law. It examines the use of five prominent mechanisms in US law for the deathtime transmission of private family wealth. These are wills, revocable and irrevocable trusts, life insurance policies, retirement accounts, and survivorship interests in real property by joint tenancies or transfer-on-death deeds. The part explores the extent to which these US mechanisms are available to individuals who are citizens and residents of Japan or China. In considering this question, the paper examines not only US succession and trust law but also US tax law. The second main part turns from law to policy. It raises five policy questions about US wealth transfer law and its use by individuals who are noncitizens and nonresidents.