If you have assets in multiple countries, international estate planning is necessary to avoid double taxation and unnecessary costs at the time of distribution.
U.S. citizens with foreign investments and holdings have reporting requirements to meet, as well as a variety of tax credits and exclusions that they can claim to minimize their taxes.
Whether it’s an ancestral home in your homeland or a family vacation home in an exotic location, owning property outside the United States can raise unique issues. Estate planning for such assets requires special attention.
International laws and regulations differ dramatically from those of the U.S., and some of these laws can create negative tax or inheritance consequences if not properly planned or adjusted to an existing plan.
An important component of a sound international estate plan is understanding how the various transfer taxes will apply to your worldwide assets.
This involves evaluating the interplay of the relevant transfer tax regimes and the pertinent treaty to determine the transfer tax outcome, considering not only the nature of the property but also the impact of citizenship and domicile on your net tax outcomes.
This complexity requires the expertise of a team of trusted experts in cross-border legal, tax and financial planning matters. These professionals can help develop a comprehensive financial plan optimized for the multijurisdictional taxation regimes that affect your expat or multinational family’s wealth.
Wills & Trusts
As individuals and families move across countries and jurisdictions, they face the challenge of ensuring their assets are protected, taxed efficiently, and distributed to those they care about. Planning for these complexities is essential, and it is often necessary to incorporate strategies such as trusts into an estate plan.
Wills and trusts are a core part of any comprehensive estate plan. They establish a blueprint of specific instructions for the distribution of wealth to those who are to receive it, and may provide a variety of protections (e.g., from taxation) and benefits (e.g., for charitable purposes or special family circumstances).
International estate plans will need to take into account a number of legal and regulatory issues. Some of these include determining where the decedent lives and the laws governing distribution to beneficiaries.
Asset protection refers to a variety of strategies designed to protect an individual’s assets from potential creditors or claimants. These techniques include transferring funds or property to foreign entities, shifting ownership of real estate, and using offshore trusts.
The ultimate goal of asset protection planning is to provide clients with an integrated approach to their wealth management needs. This approach should enable a client to weather a legal storm at least moderately better than they would have otherwise.
Several factors influence whether a sophisticated asset protection plan works. Most notably, the skill with which the plan is designed and executed.
One of the most fascinating aspects of modern life is that we live and work in global markets. It’s not uncommon for a person to live in several countries at once, or even own a piece of property in a foreign land. As a result, competent international estate planning has become more than just a nicety.
Having a clear understanding of the rules of the game can mean the difference between a smooth sailing future or a major headache down the road. The latest updates to international laws, tax regimes and regulations have been in the news recently, and it’s time to put your best foot forward.
Whether you’re a seasoned international property owner or a fledgling splurging on the latest gadgets, it’s time to make sure you have a clear cut plan in place. The best way to go about it is by having a professional on your side. With a little help you’ll have no trouble ticking all the boxes when it comes to creating a foolproof estate plan.