The Cross-Border Family Wealth Guide

Advice on Taxes, Investing, Real Estate, and Retirement for Global Families in the U.S. and Abroad

Andrew Fisher

• Publisher: Wiley
• Year: 2017
• ISBN:
  9781119234289
• Edition: 1
• Topic: Personal Development
• Subtopic: Personal Finance

Make sense of international personal finance with expat-specific expert advice

The Cross-Border Family Wealth Guide is the long-awaited financial handbook for cross border families, with expert insight from a financial advisor who specializes in expat issues. Whether you're an American living abroad, or foreign-born and living in the U.S., this book demystifies the complex issues surrounding the worldwide tax system, international information reporting, sensible investments, international real estate, and retirement planning. When your wealth crosses international borders, managing even the most mundane financial affairs can become wrought with time-consuming complexity; moving money, opening accounts, dealing with currency risks and translation, and setting up investments suddenly involves a whole new set of rules and regulations. Your 401(k), IRA, or annuity must be handled properly to retain certain tax benefits, and retirement planning takes on a brand new dimension of difficulty. This book shows you how to navigate the maze to make sure your money keeps working for you. Real world examples illustrate solutions to common problems, and real, actionable advice gives you a solid plan for your next steps.

While personal finance management is rarely simple, the recent crackdown on tax havens and increased tax collection vigilance has made things even more difficult for cross border families. This book answers your questions, and shines a light on the way forward to long-term financial security for international families.

• Navigate the complexities of international taxation
• Get specific guidance on retirement planning
• Make sense of how real estate fits into your financial picture
• Invest appropriately to maximize growth for the future
• Manage your assets and tax benefits across borders

With the right know-how, cross border professionals can make sensible investment and financial planning decisions, but credible guidance is rare and difficult to find. Simple and practical, with targeted advice, The Cross-Border Family Wealth Guide is the international family's solution for avoiding financial confusion.

PART I
The Financial Challenges of a Cross-Border Life

CHAPTER 1
Who Are These Cross-Border Families?

There remains little doubt that in the twenty-first century, capital—the factors of production and the resources that make it possible to grow wealth—has become fully globally mobile. Like water seeking its own level, capital invariably flows to where it will be most valued and provides the greatest returns. We tend to think of capital first and foremost as financial capital, but financial capital is not the only kind of capital. In fact, globally mobile financial capital is almost always supported by something else: globally mobile human capital, that is, cross-border professionals and their families—people with the skills, talents, and drive to succeed and rise to the top, and who are willing to go wherever in the world they find the most opportunity.

Put differently, the large, powerful international companies and interests who deploy their financial capital where it is most advantageous also know that the best and most effective professionals, managers, and other high-level employees for any given situation usually do not come from only one country, including the country the company is headquartered in. These companies regularly recruit, hire, and redeploy professionals to assist, enhance, and even anchor their efforts in different countries depending on the company's overall strategic and tactical needs and the situation at hand.

As a result it is increasingly common to find top-notch individuals who start with a company in one country (usually where they are born), then move to work in another country (often but not always with the same company), and then go on to yet another country or perhaps back to their country of origin. Over time (and sometimes very quickly) these individuals invariably accumulate assets of various types in more than one country; and, over a decades-long career arc, things can—and usually do—become very complicated.

International professionals have families, parents, children, and other relatives. They have dreams, goals, desires, and long-term plans. And like everyone else, they have personal responsibility for making many significant decisions regarding the long-term management of the wealth they accumulate.

But these individuals must also face a bit of a quandary. On the one hand, the spirit that led them to excel and become desirable professionals, thought leaders, and managers of all types is the very same spirit that makes them want to achieve the very best for themselves and their families in the financial long run. On the other hand, the desire to intelligently grow and manage personal wealth can be frustrated or outright quashed by insufficient information, overwhelming details, and a dramatic shortage of places to turn for help.

The purpose of this book, then, is to assist cross-border professionals and their families, and in particular those with a financial connection to the United States, to make better, smarter, and more optimal personal financial and wealth management decisions, both in the short term and long term. Managing wealth efficiently and effectively is never easy and always takes careful thinking and planning, but cross-border professionals and their families—even the best and brightest of a class of individuals who are by definition at the top of the international class—find themselves in a particularly tricky and potentially problematic situation.

The Growing Need for a Definitive Guide

In 10 or 20 years, perhaps, we will look back and wonder with amazement how it was that as late as 2014, when initial drafting on this book began, there was no comprehensive guide to help cross-border families with personal financial decisions and the long-term effective management of their wealth. That is, as made clear throughout this chapter, cross-border professionals and other globally mobile families wishing to align their financial assets and strategies with their long-term goals and life planning objectives currently face a distinctly uphill battle.

Not only do they face three unique challenges—lack of uniformity, complexity, and scarcity of helpful resources—but also, they find themselves smack dab in the middle of the rapidly changing legal, financial, and regulatory landscape described in the last section. And then, on top of all that, while the community of cross-border professionals and globally mobile families is growing dramatically, the number of firms and individual advisors qualified to help them is simply not keeping up.

More and more, talented professionals from all around the globe are found working—all around the globe. If nothing else, the increasing economic expansion of emerging nations in Latin America, Eastern Europe, and emerging Asia, as well as the continued long-term expansion of China and India, is only going to create more opportunities for education, advancement, and cross-border work scenarios for exceptional and successful individuals living in all those places.

At the heart of this trend, of course, we come back to where this chapter started: to the global mobility of capital, including the human capital that goes along with it. This growing global mobility of capital, then, is coupled with the fact that outstanding individuals of all types, whether they are from a small village in India with only dirt roads or from a privileged background in London, are being sought out by companies and organizations and asked to relocate—often to the United States, which is still the world's strongest economic engine. So then, just as there has never been more global mobility of capital, there has also never been more global mobility of talented individuals of all kinds, from programmers and coders to security experts to managers and marketers to entrepreneurs and those who support them.

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At my firm, Worldview Wealth Advisors, we have long recognized the lack of good information, advice, and places to turn to related to wealth management for cross-border families. Given the growing need, we simply felt that now was the time to pull together what we've learned about all of these issues and put it in a place where successful cross-border people from around the globe can access it and benefit from it.

Put differently, the need for a definitive guide at this point in time simply felt obvious to us. This volume is our response to that need by attempting to pull information together and provide usable, practical answers for those who are not in a position to afford to bring together their own high-level advisory team of financial advisors, attorneys, and tax professionals. And even for those folks who can afford to pull together their own professional team, we believe this book will provide a tremendous head start, because it looks at issues comprehensively and systematically. That is, when an expert is consulted with deep knowledge of a single cross-border relevant area like tax, real estate, investing, or immigration, he or she may not have a sufficiently robust understanding of the big picture to be able to offer advice that is digestible, relevant, optimal, and usable. With The Cross-Border Family Wealth Guide at your side, you'll be better informed, better able to work with the professionals you consult, and more able to achieve your goals in the long run.

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Who's Who: Who This Book Is Meant to Serve

This book is intended to serve globally mobile families who have a financial connection to the United States, either by being a citizen or resident of the United States or by simply having assets located here. There is a relatively large community of people throughout the world who have financial affairs in both the United States and at least one other country. International or cross-border knowledge workers and other middle- and senior-management professionals, usually working for large corporations, constitute the majority of this community, but of course there are retirees, students, and children as well.

Some of these individuals are originally from the United States, and their knowledge and skills have brought them overseas. More often, people born outside the United States with substantial knowledge and skills are brought here and then stay for a while, and some stay permanently.

Often, top-notch individuals (and their families) move from one country to another, and then to still another, so that before coming to the United States they may have previously lived and worked in one or more other countries. Along the way, these cross-border professionals may accumulate personal relationships as well as financial accounts, real property, and other assets. And then, one day, these individuals may end up inheriting property or money from their parents—or their parents' parents—money and property that is located in a country other than the United States.

Examples of Who Might Benefit from This Book

For example, suppose a brilliant young Swiss marketing executive works for a major company in Switzerland. She is then brought over to the Hong Kong office before being further promoted and transferred to U.S. headquarters. Along the way, she leaves certain bank accounts, retirement funds, and other assets in both Switzerland and Hong Kong. Before coming to the United States, though, she falls in love with and marries a Chinese man, with whom she has two children. The whole family then moves to the United States, and while the children will obviously be of Swiss-Chinese descent, they will grow up in the United States.

Education is often a strong priority for international professionals, given their exposure to language, cultures, history, and travel. It's not surprising that by the time they are done moving through the U.S. school systems, their children will talk like, think like, and act like Americans. But at the same time, these children will also have their national history and background, and in some cases, their citizenry, in more than one country. Whether or not the children grow up in the United States, it is very common for cross-border professionals to want their children to get their college education at U.S. institutions, which are very well-regarded internationally.

Let's consider another example: a high-level programmer from India who works for a while in London, and then gets transferred to Chicago, New York City, or the Silicon Valley. Regardless of whether he ever moves back to India, he will likely accumulate assets of various types along the way. Bank accounts, retirement accounts, brokerage accounts, real property, an...