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Key Lessons in Cross Border Wealth Management – American Ex-Pat


Key Lessons in Cross Border Wealth Management - American Ex-Pat copy.jpg

As part of our article series on issues in Cross Border Wealth Management, the following is an illustration of some of the key implementation strategies we come across in helping cross border professionals manage their complex financial affairs.

“Our financial affairs are so complicated because we have stuff all over the world, and no one has ever looked at our whole picture,” worried the client when we first sat down with them.

This client is an American living in Hong Kong for many years. He is originally from New York, and was working in Germany when he met his wife, a German citizen. He has since been posted in numerous countries with his long-time employer, and now finds himself running the Asia region from Hong Kong. The client has three children, who are all dual national citizens of the U.S. and Germany. The wife is not a U.S. citizen.

The clients have accumulated a significant net worth of well over $5m over the years, with three properties owned in three different countries (two are now rentals) and a significant amount of financial assets in company stock and options, qualified savings accounts in multiple countries, accumulated cash and diversified liquid investments.

In the time that we have worked with this client, we successfully guided them through many unique planning decisions, including the following:

  • Oversight of U.S.-based investment accounts, which include qualified accounts and 529 plans. The 529 plans were an interesting discussion, because it is uncertain whether the kids will be attending university in Europe or in the U.S. Higher education in Europe is often free or at least substantially less expensive than in the States. This of course could lead to a situation where a large 529 balance could go unutilized, thus incurring a tax penalty. In the end, we agreed that it was very likely that at least one of their kids would study in the U.S., making a 529 plan make sense.
  • In-depth involvement in tax planning in conjunction with their various tax advisors, as they have moved among four countries during our time working together. Over the years, we have sought out multiple new tax advisors to join their advisory team, based on their evolving tax situation.
  • Helped identify an inappropriate offshore investment, which was later liquidated. This particular investment was sold to the American citizen client before he married his German wife. These off-shore investment “schemes” have long been sold to non-American expats, but for an American the structure never made any sense. Furthermore, most of these that we have reviewed are also quite poorly performing investments in their own right, due to excessive fees and poor investment results.
  • Organized the various foreign qualified accounts they own, and helped to evaluate the investment choices and reallocate holdings. Careful consideration of their employer pension in Hong Kong resulted in their decision to decline participation for tax reasons.
  • We’ve consulted on employer compensation negotiations, in particular reviewing cost of living allowances and the currency adjusted, net after-tax take home pay of two competing job opportunities. This directly led to a significantly higher final salary, as we were able to help him show his employer that their initial offer was not competitive after considering the tax effects.
  • Helped analyze the wife’s German property holdings, which were gifted to her as a result of her parents’ estate planning. She owns the property with her sibling, but does not have any legal right to the income until her mother passes away. This created some confusion regarding proper taxation.
  • Helped them find a suitable estate planning attorney to prepare a will and other estate planning documents tailored to their situation.

“Finally we found someone who understood the unique situation we are in given our international background,” noted the client. 

If you as an advisor have any questions about cross-border financial planning and wealth management approaches, please feel free to contact us!



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