Strategies for Foreign Nationals

Strategies For Foreign Nationals

We understand the significance of financial strategies for foreign nationals seeking to optimize their wealth management and achieve their financial goals.

Strategies for Foreign Nationals

If you are a foreign national who owns substantial assets in the U.S., then you may have unique exposure to more severe estate taxes on those assets. We can help provide strategies to minimize those taxes through proper planning.


Here is a typical client scenario and solutions:


Jorge Gonzalez is not a U.S. citizen and is a resident of Mexico. On his last trip to the U.S., he purchased a $4 million condominium in Miami, which he visits three or four times a year. By buying this property and owning it outright, Jorge created a U.S. taxable estate and as a Non-

Resident Alien he is only afforded a $60,000 estate tax exemption.


If he were to die this year, when the top tax rate is 40%, his estate could owe over $1.5M in taxes. In other words, U.S. estate tax will erode Jorge’s U.S. estate by 38% since the value of U.S. real estate beyond $60,000 would be subject to estate taxes.


Furthermore, let’s assume Jorge’s estate will grow over time. In 10 years, if the new tax rate holds, and assuming 3% growth rate on the condominium, his estate will be about $5.219 Million and face over $2 million in estate taxes.


In order to solve his problem, Jorge could buy a properly structured life insurance policy large enough to cover his estimated tax liability over the next several years. Since the death benefit of Jorge’s policy is not subject to U.S. estate taxes, his estate would have cash available to pay

the estate tax bill so his condominium can stay in the family.


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Key Questions to Ask Yourself about your financial plan as a Foreign National

  • Are you familiar with alternative retirement saving options beyond traditional plans like a 401(k), IRA, or deferred compensation plan?

    If not, you should explore various retirement saving avenues beyond conventional plans like a 401(k), IRA, or deferred compensation plan to diversify your portfolio and maximize tax advantages.

  • Have you allocated at least 25% of your retirement funds into tax-free accounts?

    If not, you should consider reevaluating your retirement portfolio to ensure at least 25% of your funds are invested in tax-free accounts for enhanced tax efficiency and flexibility.

  • Is your retirement portfolio shielded against potential financial impacts from long-term care needs?

    If not, you should explore strategies to safeguard your retirement savings from potential financial strains caused by long-term care needs, such as insurance or dedicated savings vehicles.

  • As retirement draws near, do you have strategies in place to mitigate risks posed by market volatility?

    If not, you should implement strategies to shield your retirement assets from market fluctuations as you approach retirement to preserve wealth and maintain financial stability.

  • Are you confident that your retirement income will last throughout your lifetime?

    If not, you should review and adjust your retirement plan to ensure a sustainable income stream throughout your retirement years, minimizing the risk of outliving your savings.

  • Do you possess penalty-free avenues to access retirement funds prior to reaching age 59 1/2?

    If not, you should explore penalty-free options for accessing retirement funds before reaching age 59 1/2 to accommodate unforeseen financial needs or early retirement plans without incurring penalties.

For Answers to these Questions.

Getting advice begins with a simple conversation.

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