C3 Financial Partners

Global Citizens Planning | C3 Financial Partners

We are all familiar with blended families – children from previous marriages. Today, many families also have blended citizenships. Whether because of family ties, business opportunities, governmental pressures, and other reasons, foreigners’ interest in investing in the U.S. has naturally increased. The National Association of Realtors reported, “In 2018, property sales to foreign buyers totaled 121 billion dollars with Texas ranking as the second most popular state for foreign investors, trailing Florida.” These investments are not always preceded by the correct tax and/or legal planning, which. unfortunately. can result in unexpected, and sometimes substantial, financial liabilities.

One U.S. tax liability is the estate tax, which is a 40 percent transfer tax triggered at the death of the property owner.

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While a resident or citizen of the U.S. can currently receive an estate tax exemption of over eleven million dollars, a non-resident non-citizen is only eligible for a sixty thousand dollar exemption.

Nine out of ten times when we mention the estate tax to a foreign national client, they are unaware it exists and shocked by its potential impact to their financial legacy. If a family is not prepared for this tax liability, they may be forced to quickly sell valuable assets to meet their tax obligations. One financial instrument many of our foreign national clients have implemented into their estate planning is life insurance. Liquidity means choices. One of the most important benefits of having a life insurance policy is that it provides an immediate source of cash to manage expenses of the estate. With this cash, heirs can meet their tax obligation without having to liquidate valuable assets, which gives them more choices.

Life insurance is not the only solution for an estate tax exposure. However, it can be part of a more elaborate estate plan, and play an important and beneficial role in a smooth and efficient transfer of an estate from one generation to the next.

From the entire C3 team, we look forward to collaborating with you.

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Foreigners’ interest in investing in the U.S. has continued to increase. But are your foreign clients aware of their potential U.S. estate tax liabilities? Watch this brief video to learn about a solution that can protect your foreign clients from unexpected, and potentially substantial, financial liabilities.

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