Author Topic: Living abroad and estate plannin  (Read 259 times)

Maam

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Living abroad and estate plannin
« on: January 15, 2018, 05:30:13 PM »
Not sure if this is the right place to post...maybe it fits together with taxes in that subforum..  Anyway...

I've always been curious why other people (US citizens) living abroad never share how they plan their estate. Of course, they don't have to disclose the detail of their family life but some general knowledge to help others on how to think/plan their future course in case they wish to live abroad.

I?m curious when a married couple goes to live in a foreign country...

What happens to the estate when one of the couple dies in that country? Nobody seems to explore such topics, but I don?t know if this is because it's not a big deal (financially) associated with the death in a foreign country because that country doesn't put any claims against the assets left behind or is it so complicated that one must consult some kind of a lawyer before growing their roots in the new country?
Or do most of expats choose not to set the roots in one country long-term in order to prevent tax and estate complications? I would guess that if you just rent a place in a new country and all the other financial assets are in the accounts in the USA the survivor would not be liable to report them in the host country, right?

I, for one, would love to know something in general in advance before moving to a new country and especially if my spouse and I wished to buy a house there.
Would you say that the best way to play geographical arbitrage is by renting or house sitting temporarily and in this case you probably don?t need to think what will happen with the estate and its taxes when your SO dies there because you?re just a visitor??
Anyway, if you have any (general) info re estate planning outside the USA, I would like to hear it.

Re assets, I?m referring to financial assets U.S. retirees usually have these days: 401k retirement savings, IRA?s (individual retirement savings) and taxable brokerage accounts.

Sorry for the first rambling post :-*

PS. Sorry to broach such a sad topic but it?s part of retirement planning for couples, isn?t it?

PPS. E.g. I read somewhere that Spain assesses taxes based on your asset value, not the income, so if you?re honest to report the total value from all brokerages in which you keep your money at (apart from being selective which statement of your brokerage account to report on; Don?t be surprised, Spanish accountants advise to do so), it can be very pricey to reside in Spain as an expat.


gocurrycracker

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Re: Living abroad and estate plannin
« Reply #1 on: January 16, 2018, 05:36:56 PM »
Most people probably don't plan their estate...

Assets in the US are subject to US law. Assets in a new country are subject to the taxes of said country. Each country is different.

General rule of thumb is to have 2 wills

GOFU

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Re: Living abroad and estate plannin
« Reply #2 on: February 05, 2018, 05:41:46 AM »
Here's what I did: I set up a trust in the USA and all financial assets are in the trust or will go to the trust. Taxable accounts, IRAs, 401k, life insurance proceeds, bank accounts, rental property, etc. All of it. We keep no significant financial assets anywhere outside the US. We manage all our stuff by computer and phone (and hardly ever by phone any more).

I see absolutely no need to move your financial assets to another country. In fact the idea of doing so seems completely absurd. If you are not earning enough to live on in the foreign country, you transfer what you need to live for a time from the US and leave the rest where it is according to your investment plan. When you need more money you have it sent over.

As for real property in the foreign country, you could title it in both names as husband and wife, and probably even add your beneficiaries' names to the title also to ensure the benefaction you want. If the place is so lacking in rule of law that you can't do that, then you probably should think twice about investing in real assets there.

Maam

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Re: Living abroad and estate plannin
« Reply #3 on: February 16, 2018, 06:03:51 PM »
GCC: Do you have 2 wills then: for the USA and another for Taiwan? Can I ask you how you have organized your estate or are you one of the 'non-planning estate' people because you find it unnecessary?

Thanks GOFU. Your answer was helpful, but I'm curious how you came up with this method. Did a US lawyer advise to set up a trust in your resident state in the USA or did you do that after googling around? If google helped you, could you throw in a link or two for reference?

We also have a revocable trust (the USA), but perhaps 10% or so of taxable stuff isn't in the trust...being a turtle with this process of moving stocks there, but one day I'll get it done.
Well, in my understanding 401k and IRA's (deferred retirement accounts) cannot be held in a trust. I mean, the trust cannot own them while you're alive. I think the trust can be assigned to the 401k or IRA's as a beneficiary if you don't have a spouse. If there's a spouse, then first he/she inherits your 401k/IRA (it's a law unless the spouse signs an agreement not be the beneficiary of your 401k and IRA) and only when he/she passes away then the residual assets would become part of the trust. Of course, I've just written what I recall from the top of my head and I could well be mistaken...

Thanks

gocurrycracker

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Re: Living abroad and estate plannin
« Reply #4 on: February 16, 2018, 09:58:39 PM »
GCC: Do you have 2 wills then: for the USA and another for Taiwan? Can I ask you how you have organized your estate or are you one of the 'non-planning estate' people because you find it unnecessary?

I find it unnecessary