EP 7: Wedding Bells Are Ringing? Humdrum Tax & Financial Implications Follow!
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Just about everybody loves weddings, and all that goes with them but when they cross international boundaries, the real fun begins.
In this episode, your co-hosts Jane Mepham, CFP, and Manasa Nadig, EA, dive into some of the challenges of a U.S. citizen marrying a non-U.S. citizen.
They examine the case of a couple who just got married and the non-U.S. citizen is still outside the U.S. What are the tax-filing options available to this couple?
You'll be surprised, at the findings they come up with.
The views and opinions are those of the speakers, and should not be considered financial, tax, or legal advice. Consult your advisor for any legal, cross-border tax, and financial advice.
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Jane Mepham, CFP (00:00.482)
So obviously, in addition to what you just mentioned, I guess we have to think about payfix and everything that Sarah owns overseas. And so then let's continue anyway and talk about in terms of asset ownership. What assets can they own in the US, especially for this new person, the non-US citizen. We know they can consider joint ownership. We know they can own them separately, but really we know they can own assets, rent,
property, pooled investments, really pretty much this non-US citizen can't own just about anything in the US. The key thing is, and the key consideration is how they're going to own them, how they're going to title them because of estate planning issues. I do want to point out that it's important that if they're not going to file together, like you've explained.
that the nine US citizen not commingle their nine US assets with the new US assets that they're going to be owning. Anything else you want to add to that estate planning bit?
Manasa Nadig, Enrolled Agent (01:12.62)
Yes, Jane, definitely gives us another point of discussion for those who may have to plan their estate, both in the US and in the country that they reside.
And we have to think about that plan and how important it's going to be, especially if both the US citizen and their spouse who's the non-resident or non-US citizen, how would that plan change if these US-Situs assets were jointly held and what would also happen to the estate and gift planning options?
with all of the assets that were owned by the non-resident spouse in their country. So, you know, for example, if the foreign-born spouse has substantial assets in the country where they're from, then at what income or wealth level would there be a tipping point, you know, as far as tax brackets, filing jointly versus separately, or even for estate planning
able to take the annual or lifetime estate or gift planning exclusions. So that's one thing to consider. As well as, you know, how is the non-resident spouse going to go forward with declaring all of their foreign assets to the IRS and to the U.S. government? And what are the planning opportunities we have in terms of the retirement contributions that can be made? And, you know, other...
investment options and so on.
Jane Mepham, CFP (02:55.278)
So it almost sounds like it's coming down to really the estate and gift planning where you know an NRA is married to a US citizen and because it's such a complicated path to navigate to see the list, you've already alluded to some of it. It's going to come down to the annual gift exclusion limits, marital deductions, the gift and estate lifetime exclusions, where the assets are located. You've touched on some of that.
Jane Mepham, CFP (03:25.372)
or it's probably one of the most complicated definitions when it comes to NRAs or non-resident aliens. So we'll probably be addressing, we'll address this in the next episode. Can you think of anything else we wanna add to this or do we wanna call it a wrap?
Manasa Nadig, Enrolled Agent (03:47.296)
Yes, this was a great discussion, Jane. I think we touched upon a lot of different points today. Mainly, the things that I would like for our listeners to take away by the end of this is, one, the tax filing options, which is, of course, an annual event. And then the big picture as far as what wealth they have, what assets they have, and of course, what options and planning opportunities
arise for their estates and what they can gift each other to probably bring down their, you know, lifetime exclusion or estate tax or gift tax from the US side if they were subject to that. So those are things that I would definitely want the listeners to think about. And of course, we'll put links to the resources we have been talking about today in the show notes on our
site, theiamcafe.com. And like we always say, you know, do please subscribe, like and share our episodes. And, you know, we love being here and we love talking about all of these topics and we're looking forward to bringing you all more episodes. So signing off today, this is Manasa Nadeg. I'm off, but not to another wedding for some time, at least this year.
Jane Mepham, CFP (05:12.494)
I'm out.
Enjoy the weddings! Bye!
Manasa Nadig, Enrolled Agent (05:20.537)
Bye.