Trust Structures by Jurisdiction

IRC §98 / §7701 What Is a 98 Trust?

A 98 Trust is a foreign trust formed outside U.S. jurisdiction. Under IRC §7701(a)(31)(B), a trust is "foreign" if either (a) no U.S. court exercises primary supervision over administration, or (b) no U.S. person has authority to control all substantial decisions. Meeting either prong qualifies the trust as foreign.

The "98" designation refers to the framework of using a foreign trust structure that operates under the principle that trust law predates statutory law. The trust is a private agreement between parties, not a creature of statute.

Why Taiwan?

• Outside the Hague Convention on Trusts — Taiwan is not a signatory to the 1985 Hague Convention on the Law Applicable to Trusts. This means trust relationships formed there are not automatically subject to international recognition/enforcement frameworks that could compromise privacy.
• Favorable privacy regime — Taiwan's Trust Enterprise Act (2000) provides a clear legal framework while maintaining strong privacy protections for settlors and beneficiaries.
• No automatic exchange of information — Taiwan is not part of the CRS (Common Reporting Standard) automatic exchange framework in the same way as OECD members.
• Stable rule of law — Functioning court system, clear property rights, and a legal tradition that respects trust instruments.
• Geopolitical independence — Operates outside the direct reach of U.S./EU regulatory apparatus while maintaining international banking relationships.

How It Gets an EIN

1. Form the trust in Taiwan with a local trustee (can be a trust company or qualified individual).
2. File IRS Form SS-4 (Application for Employer Identification Number) designating the entity as a foreign trust.
3. Check the "Trust" box under type of entity, and indicate "Foreign trust" in the description.
4. The responsible party listed can be the trustee or a U.S.-based tax advisor.
5. EIN is typically issued within 4-6 weeks for foreign entities (no online filing for foreign entities; must fax or mail to the IRS).
6. The EIN enables the trust to open U.S. bank accounts, receive payments, and interface with the U.S. financial system when needed.

What It Enables

• Private association framework — The trust can serve as the umbrella entity that spawns regional UNAs without creating a publicly visible corporate chain.
• Non-reporting structure — If properly structured with no U.S. beneficiaries and no U.S.-source income, the trust may avoid FATCA reporting obligations. However, any U.S. persons involved trigger Form 3520/3520-A filing requirements.
• Asset protection — Foreign trust assets are generally beyond the reach of U.S. domestic creditors absent a fraudulent transfer finding.
• Multi-jurisdictional operations — The trust can hold assets, enter contracts, and conduct operations across borders without the regulatory burden of a multinational corporation.

UUNAA What Is a UNA?

A UNA is the simplest form of collective legal entity: two or more people joined by mutual consent for a common nonprofit purpose. No articles of incorporation, no state filing, no registration fees. It exists the moment the members agree to its purpose and governance rules.

Uniform Unincorporated Nonprofit Association Act (UUNAA)

The UUNAA, promulgated by the Uniform Law Commission, has been adopted (in full or substantially) by approximately 20 states including:

• Alabama, Arkansas, Colorado, Delaware, District of Columbia
• Hawaii, Idaho, Iowa, Kentucky, Louisiana
• Mississippi, Nebraska, Nevada, New Mexico, North Carolina
• North Dakota, Pennsylvania, Texas, West Virginia, Wisconsin

In UUNAA states, a UNA can hold property in its own name, enter contracts, sue and be sued as an entity, and is distinct from its members. In non-UUNAA states, common law still recognizes UNAs but with less clarity on entity status.

Benefits

• Zero formation cost — No filing fees, no registered agent fees, no annual reports.
• Flexible governance — Members define their own rules via an operating agreement or bylaws. Can be as simple or complex as needed.
• Privacy — No public registry of members, officers, or activities. The association's existence is known only to its members and those they choose to inform.
• Entity status — Under UUNAA, the UNA is a legal entity that can hold property, enter contracts, and maintain bank accounts.
• Tax flexibility — Can operate as a tax-exempt organization (if qualifying purposes), or simply as a pass-through. No automatic tax filing requirement for a UNA with no income.

Limitations

• Personal liability — Members may face personal liability for the association's debts and obligations unless the operating agreement and state law provide otherwise. UUNAA provides some protection but it is not as robust as an LLC shield.
• No perpetual existence by default — The association may dissolve if all members withdraw unless the governing documents provide for continuity.
• Banking challenges — Some banks are unfamiliar with UNAs and may require additional documentation or refuse accounts. Having an EIN (obtainable via IRS Form SS-4) helps.
• Limited case law — Fewer court decisions interpret UNA rights and obligations compared to LLCs or corporations.

How It Pairs with a 98 Trust

The 98 Trust serves as the umbrella entity — it holds the intellectual property, the exchange protocol, and the quality standards. Regional UNAs are the operational arms:

• The trust establishes the framework; UNAs execute it locally.
• Each UNA operates in its own jurisdiction with its own members (farmers, producers).
• The trust can provide seed capital, standards, and dispute resolution; the UNAs handle day-to-day exchange.
• Members of a UNA interact with the trust through a defined protocol, not through equity ownership — this preserves the non-corporate structure.
• If one UNA faces legal issues, neither the trust nor other UNAs are automatically implicated.

Note on reporting: "Minimal" reporting means the jurisdiction itself imposes few or no reporting requirements on the trust. However, U.S. persons (settlors, beneficiaries, or those with control) are still subject to IRS reporting (Forms 3520, 3520-A, FBAR) regardless of the trust's jurisdiction. The privacy ratings reflect what is visible to the public and third parties, not to the IRS.

Individual Trust Path

How an individual should use trusts within the Food Value Trust system:

1. Personal Asset Protection Trust — Establish a domestic or foreign trust to hold personal assets. This is the individual's private layer.
2. Join a Regional UNA — The individual becomes a member of their local Unincorporated Nonprofit Association. Membership is by mutual consent, no filing required.
3. Participate in Exchange — Through the UNA, the individual accesses the honey-backed exchange. Their trust holds any accumulated value; the UNA facilitates trade.

Benefit: Personal assets remain protected in the trust. Trading activity flows through the UNA. Liability is compartmentalized.

Family Trust Path

How a family should use trusts:

1. Family Trust — A revocable or irrevocable family trust holds the family's agricultural assets (land, equipment, livestock).
2. Dynasty Trust Structure — For multi-generational farming families, a dynasty trust (available in Wyoming, Nevada, and others with no rule against perpetuities) preserves wealth across generations without estate tax events.
3. Family UNA Membership — The family trust (or the family as individuals) joins the regional UNA. The trust holds the assets; the family members participate in governance.

Benefit: Generational continuity. Farm assets stay in the family without probate or estate tax fragmentation.

Farmer Trust Path

How a working farmer should structure their participation:

1. Agricultural UNA — Form or join a local agricultural UNA with other producers. This is the cooperative layer — shared resources, collective bargaining, joint quality testing.
2. Production Association — Within the UNA, producers can form sub-associations around specific commodities (honey producers, grain growers, vegetable farmers).
3. Exchange Participation — The UNA connects to the broader Food Value Trust network via the 98 Trust protocol. Individual farmers trade through their UNA identity.

Benefit: Zero cost to participate. The UNA provides collective structure without corporate overhead. The farmer retains full sovereignty over their production.