When it comes to US expats living overseas, there can be an extra layer of complexity involved with the transfer of assets. When someone passes away, it is not always easy for a US citizen or even a non-US citizen living overseas to pass along their assets they own that are located in the US.
But first, we’ve written these blogs about moving to and living in Israel which you may enjoy.
And now let’s get into the blog!
Inheritance of US Assets when the bequeather lives overseas
When a US citizen living overseas, or a non US citizen with assets in the US, passes away, in both cases, a Certificate of Transfer from the IRS will be needed to move accounts or publicly traded securities on to heirs, and even to a spouse or even if the asset is jointly owned.
The Certificate states that the person who passed does not owe any estate tax, or that the estate tax owed was paid, and the assets can then be passed on. Your financial institution will require this document from the IRS before they allow any accounts to be moved to heirs. The challenge arises herein: the IRS’ backlog to even consider the request for the Transfer Certificate is 12-18 months from date of filing. During this time the account (or security) of the deceased person will be frozen. This applies to both retirement accounts and taxable accounts.
There are a few ways around this, but they all have some tradeoffs.
Certificate of Transfer: your options
There are ways to mitigate this situation, and reduce the waiting period, such as setting up trusts or in some cases going through the probate process. This will be specific to each family and therefore, we prefer not to delve into solutions here, and suggest reaching out to an US estate planning attorney who deals with persons living outside the US. We work closely with such attorneys here in Israel.
Much like Powers of Attorney that do not cross borders, there are other rules that come up for expats living overseas in Israel, and it may make sense to work with an advisor who has been serving this community and has a network of professionals who can help.
Getting help with Israel inheritance and other expat topics!
We are expat financial advisors located in Israel and the US, serving expats globally.
If you are moving to Israel or another country and don’t know where to start when it comes to the financial side of things, or hold US or foreign assets and need help figuring out your retirement as an expat, please contact us.
Have questions about retiring in Israel? We’re having a series of webinars in 2023 on this topic. We’re also publishing blogs on this subject.
JOIN the newsletter list here to stay informed.
Nardis Advisors LLC (“Nardis”) is a Registered Investment Advisory Firm regulated by the U.S Securities and Exchange Commission in accordance and compliance with applicable securities laws and regulations. Registration does not imply a certain level of skill or training. Nardis does not render or offer to render personalized investment advice through this medium. The information provided herein is for informational purposes only and does not constitute financial, investment or legal advice. Investment advice can only be rendered after delivery of the Firm’s disclosure statement (Form ADV Part 2) and execution of an investment advisory agreement between the client and Nardis.