A prenuptial agreement can become complicated due to differences in marital property laws, enforcement issues, and jurisdictional conflicts. While some countries recognize U.S. prenups, others may not. Some countries have forced heirship rules that override prenup provisions.
Relocating to another country – whether for work, marriage, or retirement – comes with complex financial and legal considerations to evaluate before making the big move. If you plan on moving abroad indefinitely, or for an extended stay, seeking professional advice beforehand is essential.
Tax considerations
If you are a U.S. citizen or green card holder, generally your U.S. federal tax obligations remain the same regardless of where you live – whether in the U.S. or abroad. For example, you must continue to file a U.S. income tax return, even if you reside in a country with a higher tax rate.
Despite the general rule above, Americans living abroad may qualify for special tax benefits if they file a U.S. income tax return.
• Foreign Earned Income Exclusion (FEIE): Allows eligible expats to exclude up to $130,000 (for the 2025 tax year) of foreign-earned income. To be eligible for this exclusion, your tax home must be in a foreign country, and you must pass one of two residency tests.
• Foreign tax credit: Helps avoid double taxation by granting U.S. tax credits for foreign income taxes paid.
• Tax treaties: The U.S. has a network of income tax treaties with other countries, which may offer reduced tax rates or exemptions on specific income sources, thus minimizing double taxation.
Americans living abroad may acquire passive investments and assets outside of the U.S. and will likely open non-U.S. financial accounts to pay local bills and cover other expenses. In addition, Americans working abroad may find themselves with offshore retirement plans.
These day-to-day aspects of living outside of the country may substantially increase U.S. compliance requirements, and it’s advisable to find a qualified U.S. tax return preparer with experience in helping Americans living overseas. Some employers may include this as part of their relocation package.
Purchasing a foreign residence
Before purchasing property abroad, familiarize yourself with the ownership rules and property rights in the jurisdiction. To help with this process, you may want to consult a real estate professional who specializes in your area of residence, or a tax professional who understands the implications of purchasing a home in your country of residence.
It is important to be thoughtful about the ownership structure that you select for your home. If you or your spouse has citizenship in the selected country, putting the ownership under the spouse who has citizenship could be more favorable, as there may be restrictions or additional taxes for noncitizens purchasing and owning property in the jurisdiction.
For example, some countries impose an additional tax for noncitizen resident real estate purchases or have limitations on what kinds of property or locations where a noncitizen resident may purchase. Further, a citizen spouse may have access to better lending facilities in the jurisdiction than a noncitizen resident.
Next, consider if the property should be in the name of an individual or a company structure. There may be local law advantages to acquire the property through a company structure; however, this may create additional tax or reporting obligations in the U.S., so you always want to consult with advisors in both jurisdictions to ensure that you are holding the property in the most efficient manner.
Estate planning considerations
If you are planning to move abroad, whether permanently or for a long-term stay, it is essential to review your estate plan and legal documents before you go. You should access key documents such as wills and prenuptial agreements to ensure they remain valid and enforceable in your new country of residence. You will likely need to create new ancillary documents, such as powers of attorney and healthcare directives, in your new jurisdiction of residence.
It is likely that your U.S. financial powers of attorney and healthcare directives will not be recognized in another country. Most financial institutions have their own preferred power of attorney form, so it is recommended to work with your local financial institution to ensure that you have the correct documentation for that financial institution.
Even if your U.S. power of attorney form meets the requirements of your jurisdiction of residence, it will be more efficient to have new local law powers drafted. If the jurisdiction recognizes them, you should also prepare local law healthcare directives.
International relocation adds a layer of complexity to estate planning. Reviewing and, if necessary, updating your legal documents before you move can help prevent unintended legal and financial consequences – especially if you intend to remain abroad for an extended period of time.
Before acquiring residency in another country, you should consult with a local attorney to determine if any preimmigration planning is necessary with respect to your assets or structures in which you may have an interest – especially if you are a beneficiary or a settlor of a trust. Many countries treat trusts differently than the U.S., and some do not recognize them at all. There may be additional reporting consequences to the trustees of the trust in your new jurisdiction of residence.
Further, trust income and distributions may be subject to additional taxation in your new jurisdiction, potentially leading to unanticipated tax liabilities. It is often too late to efficiently restructure your holdings once you have already acquired tax residency, so it is best to seek advice before in case there are efficient solutions.
It is likely that your U.S. financial powers of attorney and healthcare directives will not be recognized in another country. Most financial institutions have their own preferred power of attorney form, so it is recommended to work with your local financial institution to ensure that you have the correct documentation for that financial institution.
Even if your U.S. power of attorney form meets the requirements of your jurisdiction of residence, it will be more efficient to have new local law powers drafted. If the jurisdiction recognizes them, you should also prepare local law healthcare directives.
International relocation adds a layer of complexity to estate planning. Reviewing and, if necessary, updating your legal documents before you move can help prevent unintended legal and financial consequences – especially if you intend to remain abroad for an extended period of time.
Transferring funds across borders
Having a local bank account in your country of residence is essential for managing expenses, avoiding high currency exchange and transfer fees, and, in some cases, complying with local laws. Some U.S. banks may offer the option to open a foreign account prior to moving, and it can be a good idea to utilize that option if it is available to you. Having a local bank account in your new country of residence will make it easier to negotiate a lease and set up utilities, phone accounts, and so forth as soon as you arrive.
Moving for employment
Many Americans relocate abroad for work, often through an international branch of their employer. If you are moving for your current job, your employer may offer a relocation assistance package. If so, you may be able to negotiate for additional benefits that better align with your needs.Before negotiating the terms of your relocation package, research your company’s relocation policy and standard benefits, as well as the specific support you want to prioritize. Key considerations may include moving expenses, educational needs for children, housing, home travel allowances, and international health insurance. Entering the conversation with a clear understanding of your priorities increases the likelihood that you secure a package that best supports your needs.Working abroad may also impact your ability to make tax-free contributions to a U.S. retirement plan, and contributions to a foreign plan may be subject to U.S. taxation. Some countries require noncitizen workers to contribute to local retirement systems. Developing an individualized retirement strategy that accounts for tax implications and long-term saving goals can help you optimize the available options in a tax-conscious manner.
Conclusion
While the answer to many questions about maintaining financial security abroad is often “it depends,” working with your BBH wealth planner and attorney before you move will help you to ensure that all aspects of your financial and estate plan are carefully evaluated and adjusted to accommodate your relocation.
The nuances of tax laws, cross-border estate planning, and international banking can be complex, but with proper planning, you can navigate them effectively and set yourself up for a smooth transition to a new country.
The experience of living abroad can reap many rewards and benefits and be an exciting time no matter what stage in your life. With proper advance planning and the right team of advisors in place, you can set yourself up to be in the best position to make the most of your time – whether temporary or long-term.
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