Sometimes, what should bring peace of mind often begins with paperwork, policy gaps, and long-distance uncertainty.

I’ve had many clients reach out in a moment of both grief and doubt. They’ve just lost a loved one in the U.S., and along with that emotional weight comes a new question they weren’t prepared for: What do I do now that I’ve inherited money?

If you’re living abroad, this situation can quickly feel overwhelming. You may face:

• Cross-border banking restrictions
• Complicated U.S. tax rules
• Pressure to make financial decisions quickly
• Custodians who won’t work with non-resident heirs

In this article, we will walk you through what to expect and how to navigate this process step by step. Whether you’re an American citizen living overseas or a non-U.S. heir inheriting from a U.S. relative, we’ll cover the key considerations and your best options.

And of course, if you find yourself in this position, we’re here to help.

Before we get started, we’ve written these blogs about moving to and living in Israel which you may enjoy.

What to do when you get kicked out of your US brokerage account

Can one use a US Power of Attorney in Israel, (and vice versa)?

Immigrating to Israel

A guide to retiring in Israel

Checklist for moving to Israel

A guide to investing abroad

Israel expat case studies

Social Security for expats

Financial planning for US citizens living abroad

Selling a house in Israel as a US citizen

Why US Expats should look before they leap into a Roth 401k

Compliance with reporting of foreign assets: tips for US expats to avoid stress

What expats need to know about Brokerage Accounts for non-US residents

And now let’s get into the blog!

First Questions to Ask When Inheriting from the U.S.

Before you take any steps, it’s important to understand the framework you’re operating within. The answers to a few key questions will shape your options—and help you avoid costly mistakes down the road.

• Are you a U.S. citizen?
  Your citizenship determines how the inheritance is taxed or may be taxed going forward, what reporting is required, and whether you can continue to hold the account as-is.
• Do you live abroad full-time?
  Many U.S. financial institutions limit or close accounts for clients with foreign residency. Even if you’re a U.S. citizen, your address abroad can trigger restrictions.
• What type of account are you inheriting?
  • Taxable brokerage account: Offers flexibility but requires knowledge of stepped-up cost basis and potential capital gains tax.
  • Retirement account (IRA): Comes with rules about distributions, deadlines, and taxation, especially under the 10-year rule.
• Can the current custodian serve non-U.S. residents?
  Firms like Morgan Stanley, Merrill Lynch, Edward Jones, and others often don’t allow non-residents to keep inherited accounts. If that’s the case, a transition will be needed.

Tip: If the current custodian can’t hold the account, you’ll need to find one that can, ideally before anything is transferred.

U.S. Citizens Living Abroad: The Custodian Dilemma

Even if you’re a U.S. citizen, living abroad can create issues with inherited accounts. Many major U.S. firms won’t work with expats. Companies like Merrill Lynch, Edward Jones, UBS, Morgan Stanley, Wells Fargo, and JPMorgan Chase often close or restrict accounts for clients with foreign addresses.

For instance, a client living in Israel inherited a brokerage account from her late father in California. Shortly after, her advisory firm informed her they could no longer serve her due to her residency status.

How we helped: She found us online, and we were able to seamlessly transfer and manage the account through our custodian.

Our advantage: Our custodian can hold accounts for non-resident U.S. citizens, allowing clients to keep their inherited assets intact without disruption.

If you’ve been told your residency disqualifies you, know that there are solutions, and we’re here to help you find them.

IRA Inheritances: Rules, Taxes, and Strategy

Inheriting an IRA, whether Traditional or Roth, comes with unique rules that affect how and when you access the funds. While the account remains tax-deferred, the ownership structure changes, and so do your responsibilities as the beneficiary.

One key rule is the 10-year distribution requirement. You must now withdraw the entire balance within 10 years of the original owner’s death. For a Traditional IRA, each withdrawal is taxed as ordinary income. For a Roth IRA, withdrawals are typically tax-free, but the 10-year deadline still applies

Because these withdrawals may increase your taxable income, especially if you’re also earning abroad, it’s important to create a long-term tax strategy. Spreading distributions over several years can reduce the overall tax burden and preserve more of the account’s value.

If the current custodian does not support non-U.S. residents, they may open a temporary inherited IRA before transferring the funds. In that case, we help:

• Transition the assets to a permanent inherited IRA with our custodian
• Maintain tax-deferred growth during the holding period
• Develop a customized withdrawal plan to manage taxes efficiently

With the right guidance, an inherited IRA can be a powerful tool to support your long-term goals without triggering unnecessary tax surprises.

Taxable Brokerage Accounts: Understanding Stepped-Up Cost Basis

When you inherit a taxable brokerage account, one of the most important concepts to understand is the stepped-up cost basis. This means the value of the securities is reset to their market price on the date of the original owner’s death, not the price they were originally purchased at.

This adjustment can significantly reduce your capital gains tax if you decide to sell the assets. For example, if your parent bought shares at $20 and they were worth $100 at the time of death, your new cost basis is $100. If you sell at or near that value, your capital gains would be minimal or zero.

Before making any changes or liquidations, it’s critical to:

• Confirm and document the date-of-death values
• Understand the embedded gains or losses in the portfolio
• Review whether holding or restructuring is more tax-efficient

We work closely with clients to ensure the account is handled thoughtfully, from verifying cost basis to developing a tax-smart strategy for what comes next.

A clear understanding of stepped-up basis can protect your inheritance and help you avoid costly mistakes.

Non-U.S. Citizens Living Abroad: Special Considerations

Non-U.S. citizens living outside the U.S. can inherit tax-free from American relatives, but the tax consequences thereafter can be severe if not planned properly.

The main issue is U.S. estate tax exposure. While U.S. citizens benefit from a generous estate tax exemption (around $14 million), non-citizens who reside abroad are only exempt up to $60,000, after they inherit. Anything above that may be taxed at rates up to 40%.

To minimize exposure, it’s essential to act early. Strategies may include:

• Liquidating the portfolio and transferring funds to your country of residence
• Restructuring the portfolio to include assets not subject to U.S. estate tax (e.g., certain non-U.S. securities)

This kind of planning is especially important if you intend to leave the inherited assets to your own heirs. Without proactive structuring, your family may face unnecessary taxes later on.

Access the right guidance to preserve more of your inheritance, and ensure it’s passed on efficiently to the next generation.

Why Working with Cross-Border Specialists Matters

Inheriting U.S. assets while living abroad isn’t just about paperwork, it’s about navigating a complex web of U.S. and foreign tax laws, estate regulations, and brokerage limitations.

Having the right custodian is key but so is having a financial advisor who understands how to manage wealth across borders.

We help clients:

• Optimize tax outcomes across U.S. and local jurisdictions
• Structure IRA distributions to minimize income tax over time
• Comply with regulations in both countries
• Identify custodians who accept non-U.S. residents
• Transfer and restructure assets based on your citizenship and location
• Build long-term wealth strategies aligned with cross-border realities

We’ve guided clients through this process in Israel, the UK, Greece, South Africa, Australia and beyond. Whether you’ve inherited already or are planning ahead, we can simplify the process and endeavor to protect your wealth.

Reach out to us. Here at Nardis, we are experienced in these matters , and we are  here to help you make the most of your inheritance with clarity and confidence. Book a complimentary call today!-friendly verification methods, so even if you’re far from home, you can securely manage your accounts.

Whether it’s banking, investing, compliance, or cross-border planning, we’re here to help with clarity and care.

Wherever life takes you, you’ll always have someone in your corner. Book your complimentary 15 minute consultation today and speak with of Nardis’ financial advisors.

Disclaimer

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.