With the world becoming a global village, international borders have been merely limited to textbooks. Today, America is accepting diversity and letting go of social taboos, giving a steady rise to mixed nationality families in the country. As per a study conducted in 2019, merely 35% of the families in America are the typical heterosexual couples with kids. And even that figure is increasingly shrinking, leaving no doubt that diversity and complexity in the country\u2019s family picture are strongly growing. While the ratio of mixed nationality families increasing in the country is a proud fact, it is also progressively more challenging when it comes to tax and estate planning matters.<\/p>\n
In earlier times, decision making and much of estate planning was simple and also patriarchal. However, times have taken interesting turns. People are now subduing geographical limits. This brings a need for revision in the decision making and financial planning process. Modern times call for modern strategies. Here are some estate planning tips for families with mixed nationalities.<\/p>\n
The most important thing for a mixed nationality family to do before beginning the estate planning process is to ensure that all documents including tax-filing status, residential papers, property claims, bank accounts, loans, asset-ownerships, etc., are updated and correct. The name, address, nationality, age, and other personal details of all family members should be accurate, and all documents must be valid and up to date. This helps prevent any legal issues once the estate is due to the nominee. This step is critical in passing ownership and inheritance without legal delays or infighting<\/p>\n<\/li>\n
The most important thing for a mixed nationality family to do before beginning the estate planning process is to ensure that all documents including tax-filing status, residential papers, property claims, bank accounts, loans, asset-ownerships, etc., are updated and correct. The name, address, nationality, age, and other personal details of all family members should be accurate, and all documents must be valid and up to date. This helps prevent any legal issues once the estate is due to the nominee. This step is critical in passing ownership and inheritance without legal delays or infighting.<\/p>\n<\/li>\n
To ensure hassle-free estate planning, it is important for mixed-nationality families to have separate ownership of assets. While joint ownership may seem like a short-term solution, it can have multiple long-term financial impacts. For instance, in the case of a couple where one person, a U.S. citizen owns joint assets with a non-resident U.S. spouse, high tax filing can get very complicated. The distribution and taxation on capital gains, interest, dividends, etc. become a matter of concern for such couples. In the joint ownership scenario, the mixed nationality couple will have to disclose all income in the U.S. while also comply with all tax obligations of the country of tax residence. Moreover, if the assets owned are foreign exchange-traded funds (ETFs), foreign mutual funds, etc., the couple will also face increasing tax reporting and tax compliance problems. This will levy substantial reporting obligations on the U.S. resident spouse in terms of disclosing all foreign financial accounts.<\/p>\n<\/li>\n