Transfer tax planning for high net worth clients can be sophisticated. When the client is a foreign national, planning becomes even more complex due to the myriad of tax rules based on residence, citizenship, type and situs of property, and how the property is being transferred– as a gift during lifetime, or as a bequest at death.
Below are 4 general charts that help navigate through the rules. Treaty agreements between the U.S. and the non-citizen’s home country may alter or replace the general rules discussed herein.
Part of a Series on Planning for Foreign Nationals
Individuals who are residents of the United States but who are not citizens (commonly referred to as “resident aliens“) are subject to the same estate and gift tax rules as U.S. citizens. However, there are two important distinctions to consider when it comes to transfers between spouses who are not both U.S. citizens.
LTC in the News
The word is spreading. Major news outlets are letting the American people know the importance of long-term care planning. Are you? Here are a few recent third-party articles.
- ThinkAdvisor.com – 3 Questions for Clients Looking at Senior Care Options
- LifeHealth.com – Why Do Women Defer LTCi Decisions?
- ThinkAdvisor.com – Official Gives Hints About Medicare Advantage LTC Benefits
The Foreign Nationals market is a large one if its appetite for all manner of U.S. real estate is any indication of size.
Consider that foreigners spent $153 billion in 2017 on U.S. residential real estate, or approximately 285,000 properties; this represents 10% of all of the U.S.’s existing home sales in 2017. The majority of home purchases by foreigners were made in Florida, California, Texas, New Jersey and Arizona, by buyers from China, Canada, U.K., Mexico and India.
Protecting Your Ability to Earn A Living
Anyone who is working and has financial obligations should consider disability insurance.