182: Beyond Borders: International Estate Planning Essentials for Families (Part 2)

In this second installment of Absolute Trust Talk's international estate planning series, host Kirsten Howe welcomes back estate planning specialist Janet Brewer to explore advanced strategies for families with cross-border connections. Building on their previous discussion of guardianship challenges, this episode focuses on critical tax considerations and financial hurdles faced by international families. Janet, a certified specialist with over 30 years of experience serving Silicon Valley clients, explains the unique tax opportunities available to visa holders with stock options and RSUs, which could result in savings of hundreds of thousands of dollars in estate taxes. The conversation reveals why appointing trustees who live abroad can trigger costly "foreign trust rules" and explores practical obstacles, such as banking restrictions, that complicate international wealth transfers. Janet and Kirsten also discuss the unexpected documentation requirements that can delay inheritance distributions to beneficiaries across borders, including the little-known "transfer tax certificate" that can hold up distributions for 6-9 months even when no tax is owed. Whether you're working in the US on a visa, have family members overseas, or are a US citizen living abroad, these expert insights could protect your hard-earned wealth from unnecessary complications and taxation.

 

Time-stamped Show Notes:

0:00 Introduction

1:22 Janet introduces a common scenario: Visa holders with stock options and RSUs who need specialized planning.

2:54 Did you know? US citizens enjoy a nearly $14 million exemption, while non-US domiciliaries face estate tax after just $60,000.

4:56 Discover the key "planning opportunity" for visa holders: Gifts of US stock aren't subject to gift tax, but the same stock in their estate would face up to 40% tax at death.

8:53 Janet explains the critical distinction between "residence" and "domicile" for tax purposes, and how visa holders can legally leverage this difference.

11:31 Find out why appointing a foreign trustee can trigger costly "foreign trust rules" that reduce funds available for beneficiaries.

13:42 Learn about the growing practical challenge of US banks refusing accounts for trustees who don't have US addresses.

16:17 Next, Kirsten and Janet discuss why hiring a US-based professional fiduciary might be the most cost-effective solution despite the emotional preference for family trustees.

18:49 Obtaining an ITIN (International Taxpayer ID Number) can delay distributions by months, another documentation hurdle that foreign beneficiaries face.

22:09 Janet shares a recent discovery about US citizens living abroad: their US assets require a "transfer tax certificate" that can take 6-9 months from the IRS, even when no tax is owed.

25:44 Here’s a workaround for the transfer tax certificate delay: Opening a probate proceeding can allow distributions to proceed more quickly.