Klenk Law

How does an Anchor Baby support himself in the USA?

Posted on Fri Oct 16, 2015, on Estate Planning

From our “Ask a Question” mailbag: The term “Anchor Baby” is in the news, referring to parents coming to the USA to have a baby that automatically qualifies for citizenship simply by being born on American soil. Given that this is completely legal, and given that these parents obviously care about their child’s future and don’t want the child to be left in the USA without support, how can these parents plan ahead for the child’s care?

Any person on earth is able to form a protective trust in the United States for their child. The trust has to have a connection to the United States, so it will require a trustee located in the United States. This can be a professional trustee or an individual. This trust can be designed with many different terms, but for this example, it could be a trustfor the care of a child with broad investment powers but narrow enough to shelter the funds from the child’s spouse and creditors.

This way, a non-US citizen could transfer money into the trust either in one payment or as many gifts over many years, which is invested at an institution in the USA. This trust would also provide shelter for the funds from the parent’s creditors and/or government. This way, if the child moves back to the United States upon reaching adulthood, there will be a pool of funds safely sheltered to use for tuition, housing, and other life expenses.

There are potential complications transferring funds into the trust, depending on the country where the parents live, but an “Anchor Baby Trust,” when properly funded, can be a great tool to make sure that the US citizen child will always have adequate money.

If you have any other questions about Estate Planning, feel free to contact our office for a free consultation.

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