Expat Q & A: 56 Questions You Need to Answer BEFORE You Move Abroad

Nick Hodges, CPA/PFS, MBA, CFP

Many Americans are financially active on an international basis, often preparing to live or work abroad at some point in their career or retirement. We receive questions everyday from American expats who failed to ask themselves important questions about their plans and now have problems that need to be solved. We have listed these important questions for you to consider:

Expatriating Your Assets

• Should you expatriate all or some of your assets?
• In which currencies will you need cash assets?
• Which foreign banks in your targeted areas are reputable?
• What are some of the cheaper ways to exchange currency?
• Should you attain an offshore credit card?
• Why should you keep U.S.-based credit cards?
• What disclosures will you be required to file?

Asset Protection Is an On-Going Process

• Do you have a CURRENT working financial plan?
• Do you fully understand your current situation?
• Do you know what it will take to reach your financial goals?
• Are you working your plan or reacting out of fear?
• Are your assets correctly positioned for your overall plan?
• How will your assets be handled in the event of a lawsuit?
• How will your assets be handled in the event of a death?
• Are you hiding assets from the IRS?
• Are you clear on the difference between tax avoidance and tax evasion?

Assets in Your Control and out of Your Estate

• Which assets do you need in your estate? Why?
• Which assets should be out of your estate? Why?
• How can you reduce estate taxes with a 529 Plan?
• Do you know who your potential creditors are?
• Are you in a position to utilize the benefits of a Charitable Remainder Trust?
• Would a Charitable Annuity Trust be a better choice for you?
• Do you know which six entities creditors hate most?
• Do you know which one(s) would be best for protecting YOUR assets?
• When should you use a FLP ESOP (FLSOP) to protect your assets?

Stash Your Cash

• When does it make sense to stash cash in a long-term care policy?
• Are you aware of cheaper ways to fund long-term care policies?
• Does your state allow you to protect assets from creditors with cash-value life insurance policies or annuity contracts?
• What can you do if you need an income stream for life?
• Are you properly protecting your working years?

ERISA: One of the Most Powerful Tools Available

• Is your retirement plan a Qualified or Non-qualified plan?
• Do you understand the protection that ERISA law provides you?
• What well-known qualified plan is not ERISA protected?
• What are your state’s exclusion limits for: Traditional IRA, Roth IRA, or SEP?
• Is your business paying too much in annual taxes?
• Do you want a huge tax deduction (over $250,000 per year) for your business that will fund your retirement?

The Move BEFORE You Move

• Is your state going to chase you for state income tax after you leave the U.S.?
• Do you know which states won’t?
• Where should you establish residency BEFORE you move abroad?
• Do you know HOW to credibly establish state residency?
• If you are considering bankruptcy, do you know which state you should live in?

Protecting Profits on the Sale of Assets

• Are you planning to sell your business to fund your retirement?
• Do you own real estate with large capital gains that you want to sell?
• Do you know the top SIX ways to avoid or defer ALL taxes when you sell your business or real estate?
• What is the most important thing you can do BEFORE listing your business or property for sale?
• When should you use a FLP ESOP (FLSOP) to avoid or defer taxes on a sale?

Managing Your Finances Across Multiple Continents

• How secure are your important documents while you’re away?
• Will you have access to them 24/7 when you are abroad?
• Do you know the 17 critical documents you should always have access to?
• How will you monitor your account values while away?
• How will you have daily updated account values?

Hiring a Good Guide

• Does your Guide charge you to answer your questions?
• Does your Guide educate and explain tax complexities in simple language you can understand?
• Do you know how your Guide stays current on the changing IRS regulations that affect Americans living and working abroad?
• Can your Guide refer you to other professionals that currently work with U.S. expats?
• Do you trust your Guide to help keep you from making costly mistakes?

Tax planning and asset protection planning go hand-in-hand. However, asset protection is about protecting your assets from creditors, not about tax evasion. Be sure you work with tax and financial professionals that know the difference.

These kinds of conversations are all part of our overall services to our clients at NCH Wealth Advisors. Please contact our office if you have any questions: (866) 729-6425. We are happy to help provide the direction you need.

Please feel free to pass this along to anyone you think might benefit from this information. We appreciate all referrals.