EP 21: Strings Stronger Than Steel. Aging Parents Abroad
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Your parents sent you to the U.S. to pursue your American dream.
But now they are aging back home, and you are stressed about how to care for them.
This is a common dilemma facing many foreign-born individuals. Being on a work visa makes it even harder.
We discuss the challenges and possible solutions to this issue. We explore
topics such as:
Health insurance
Emotional concerns,
Parents' wealth, estate planning, complex issues related to inheritance, cultural norms, and legal considerations in different countries.
Respecting parents' wishes even if they differ from your own
Financial support considering exchange rates, tax implications, and involving siblings.
Patience, open communication and lots of grace (to yourself) are key.
We draw on our backgrounds as people once on work visas and currently going through the same issues.
By the end of this episode, you'll walk away with 4 to 5 ideas you can implement or start planning on that will help you shore up your financial plan.
The speakers' views and opinions discussed in this episode 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 (00:00.882)
In today's episode, Manasa and I are going to be talking about an issue that's very dear to us, an issue that we've actually seen a lot of our clients face. And this is the issue of aging parents and family overseas. So one of the things Manasa and I joke about, and actually it's true, is that
A lot of our parents kind of think of us as their retirement plans. And I'll talk to folks and they'll say, yeah, I know I am my parents' retirement plans, which is why they sent me to the US. So here we are.
We're starting to do well and we're facing some really serious challenges with them being overseas. So we're going to be talking about the challenges. We're going to be talking about possible solutions. So Manasa, I'm just going to throw this right at you and let you dive into the challenges that you've seen with our parents growing all overseas.
Manasa Nadig, Enrolled Agent (01:02.535)
Sure, Jane. You know, you're right. We talk about this a lot because, you know, we have clients and we ourselves have parents who live abroad and we see this time and again where we, some parents might consider, you know, their children who are in the US as their retirement plan. The biggest challenge
obviously, because your parents are aging, comes with health issues. And where this becomes really important is when we consider health insurance, right? Now, if we look at some countries, which are Western countries like Canada or UK or Germany, where there are government-sponsored health insurance plans,
you know, your parents might have lived and worked in those countries and paid into those health insurance programs. So that might not be an issue for you. But if you're from other countries where there are no such government sponsored health insurance programs, then aging parents, health issues and all of the related expenses around that obviously makes one want to think about.
what options there are in that country where can you purchase health insurance privately and manage these expenses in a more, for lack of a better word, a better way so that it won't hurt your pocket as much as it would, if you had not planned for it.
So that's one of the biggest challenges that I see, Jane, you know, always around health issues and aging and insurance possibilities.
Jane Mepham, CFP (03:09.538)
which actually leads really nicely into the emotional challenges that we see. So we have our parents aging overseas. They may be having health issues and especially, let's say you're the first born, you feel that really big or deep sense of, I wish I could be there physically for them. So our immediate family, you know, kids,
and you want to be there for them full time. And then you have our parents who are overseas where you really just can't run across the street to go chat with them or go check with them, where we're really talking about thousands of miles if you're going to make a trip. And it really comes down to I know I can see them on video. At least now we have technology.
but physically I'm not there for them, which I know personally, and I know again, we've talked a lot about this, does create that deep emotional issue concern leading to sometimes feelings of guilt in that type of thing, which is really, really tough for us to deal with because we are really the generation in between.
We'll figure out maybe some solutions around that, but I'm going to pass it back to you. What other challenge do you want to talk about?
Manasa Nadig, Enrolled Agent (04:38.871)
Yes, of course. Emotional. You know, when you're talking about parents and being the so-called sandwich generation and to your point earlier, being in a completely different country, possibly thousands of miles away, where maybe getting on a flight might not be that difficult, but getting to them in time just takes that much of travel, right? So
That's one aspect. And of course, what's your, are you the first born? Does that mean in your culture, you have an implied higher responsibility of taking care of things? What gender are you? There are some cultures that place more importance on that gender, whether it's a patriarchal or matriarchal society,
you would have more responsibility of taking care of your parents just because you are the first born son maybe, you know, or you're the only son of the family, you know, that's, and that definitely adds a huge, I won't use the word burden, but I would definitely use the word responsibility and financial responsibility, especially when it comes to all of this, you know, on taking care of your parents.
And also the sibling relationships, you know, how many, you know, how many siblings are you, who lives in the country with your parents, who lives in the US, are you all in the US, you know, are some of you back in the country with your parents and how are you going to maybe share this responsibility of taking care of them in the sense, you know, time wise or expense wise?
Definitely, that's not only just a financial aspect, but an emotional aspect. And all of this is kind of so meshed together. It does get difficult to separate it and think logically sometimes, but maybe someone has to, right?
Jane Mepham, CFP (07:03.058)
I know. And what I'm going to do is just kind of muddy the waters even more. And that the whole idea of parents wealth overseas. That's another area that we've seen where all parents have all this wealth, you know, land properties, buildings, that kind of thing. And as they're growing older, first of all, there's the issue of who's going to help take care of it. One.
And then at some point, who's going to inherit all of this? Now, do you follow the cultural norms over there? Or is it the person that maybe stayed behind to kind of take care of them? Hence the siblings' relationships and the family dynamics that you talked about. And then of course, what are the laws around?
inheritance and assets in that particular country. In the US it's clearly laid out and I think more and more of us are now getting comfortable because of people like us talking a lot about please plan your estate. Please make sure you say what's going to happen to your staff. So it's clearly laid out as long as you follow the rules and you can write your wills and your estate
Jane Mepham, CFP (08:24.2)
you have the cultural dynamics. And one of the ones that I found in Manasa, you might be familiar with this, is where you start talking to your older parents about having a will and they come back and say, hey, that's a bad omen. I don't want to talk about that.
you guys will deal with it. It's a huge issue. And I'm seeing more and more the fact that we're having to deal with this, the fact that we may have to help them not only take care of it now, but help settle that in the fact that we're dealing with different countries. How do you go about doing that? A huge, huge challenge. Anything else you want to add to that?
Manasa Nadig, Enrolled Agent (09:06.327)
Yes, I do. Actually, I feel, you know, of course, and that's, that's the whole point of our podcast is to provide our listeners with information on what to do when faced with these unique challenges, really, of being a person who has sort of a footprint in more than one country, right? And, and that just comes with
pre-planning for certain things that you know that you have to do in the US. Say for example, if you have an impending inheritance, then you know that there is certain reporting and compliance issues if you cross a certain threshold. For example, there's a form that you need to file if your inheritance comes from a non-US citizen parent or family of $100,000.
So, you know, those are things that are non-negotiable, right? On the one hand. So just knowing that those need to be done and making sure that there is a plan for that, that's great. And obviously, you know, if you're going to come into wealth at some point, how are you gonna repatriate it? Are you gonna leave it in the country where you got the inheritance? And how does that...
to your entire financial plan and where will there be cross border issues, how easy is it to repatriate that money to the US and what are the rules in the country that from where you're bringing the money, is it easy? I'm sure every country has rules before you can repatriate money, right? So there's those issues. And
Of course, you and I, we were talking earlier and there was this one case study where I mentioned, I had a particular client with a family back in India where all their wealth was tied into this one very, very highly appreciated flat or apartment in Mumbai. And in...
Manasa Nadig, Enrolled Agent (11:26.603)
we needed to not just look at the Indian rules for repatriation and transfer taxes on the sale of the property itself, but we also had to go down into the nitty gritties of the place, the building where the apartment was situated because that building had a society which had its own rules on who could get the inherited apartment.
and how that transfer needs to take place. So these are things that you need to know about one and maybe you need to be working with professionals in that country as well, right? Like you need an attorney, you need to be working with the bank officials in that country. And then in this example, we needed to bring an attorney who...
Jane Mepham, CFP (12:12.114)
Absolutely.
Manasa Nadig, Enrolled Agent (12:24.683)
was very specific, had very specific knowledge about Mumbai, uh, of inheritances of real estate and what that meant and what that society needed to get in order for this to happen smoothly. And of course, you know, the emotional aspect of it, where it's taboo to talk about, um, impending, uh, you know, death and although
you know, that is going to happen at some time. But, you know, maybe we have to make sure that we are sensitive to those issues as well. Right, Jane? And of course, you know, repatriation and exchange rates and tax treaties and all of that goes into that package of planning.
Jane Mepham, CFP (13:12.71)
Right. It all goes into it. I almost want to think those are the technical details. The key thing is how do we get our parents to actually start talking about some of these issues? And I think that's where you're right. Professionals would help. And again, we'll talk about some of that when we come to solutions. So the last challenge that I see, and this will actually lead us into possible solutions. So I'll talk about it as a challenge
Manasa Nadig, Enrolled Agent (13:19.524)
Yeah.
Jane Mepham, CFP (13:42.664)
possible solutions of dealing with aging parents overseas is one, respecting parents wishes. So our parents have grown up with different cultural norms and a very specific way of life.
And now here we are in the US, we've been exposed to a whole different way of thinking, especially if you came here as an adult, I suppose, you kind of know the two ways. You know how folks will think back home, whatever back home is. And you also know you've also learned the new way of thinking, which is what allows you to have success. And your parents may have very specific wishes. So and those wishes may not agree with you.
So it's a challenge and I'm just going to dive right into solutions so I can address it. So the first one as a challenge is please, please respect your parents' wishes. They may not agree with your way of thinking. They may seem to not make any sense, but give them credit for
having made specific decisions with their way of thinking. So for example, back in Kenya, there's a whole idea of, and I think it does happen in other countries where we do, I'd call it almost medical tourism, where folks are sick and you end up sending them to India actually for medical treatments. There's been a lot of that. And so if your parent is very specific about not wanting,
intervention or not wanting to go through that whole process. It's tough, I understand, but you really need to respect their wish and what they are talking about.
Jane Mepham, CFP (15:37.422)
please, please do respect their wish. If need be, you can have them explain to you their logic behind it. But I think it's important to really respect their wish. And then be very, very patient with them. Again, these are all parents. They've brought us to this point. And when I think, for example, in the African culture, we respect our parents a lot more than.
For example, what I see here, we really don't talk back to them. And I understand the cultural norms, but there's still ways that you can get around in terms of communicating. So be very, very patient with them and respect their wishes, even though they may not agree with what you were thinking or what you're recommending. How does that sound, Manasa?
Manasa Nadig, Enrolled Agent (16:26.787)
Yes, that's a great idea. That's a good solution. And I would like to add here to plan for and have checked off all the legal ramifications of what is needed to be done. And definitely, when we are talking about parents' wishes, if you are able to get a will done, then know that.
You need a will in the local country. You need a will that is executed in the country where your parents are and where all the assets are. Many times, wills executed in another country are not recognized by the courts of the country where your parents are. So understand what those legal ramifications are. Look into a possible power of attorney.
and who should have that power of attorney, and how should that be worded, and should that be incorporated into the bill itself. And, you know, to your point earlier, if you have an estate plan, or if you're able to get an estate plan in place, let's put it that way, then make sure that it has been vetted and created by professionals who understand that some or one of the family members
has a footprint in the US and work with individuals in the US who understand that, you know, you may be bringing assets or money from abroad and what that entails, right?
Jane Mepham, CFP (18:10.478)
Yeah. And again, I think we've just kind of gone straight into the wealth part of it, which is, which is fine because this is what we're dealing with. Obviously it'll be great if you're able to convince them to do this, but let me bring you back to where we talked about supporting them financially. So one of the things I see to my clients, when folks reach out to me and understand, you know, they're immigrants and they have family overseas, the question I normally ask them as far
Manasa Nadig, Enrolled Agent (18:20.092)
Mm-hmm.
Jane Mepham, CFP (18:40.272)
their spending planners, how much money are you sending overseas to your family? It's not, are you sending money? It's how much are you sending over for support? And that kind of opens the door for us to talk about, okay, this is, these are some of the things I'm trying to help them with. This is how much.
I'm helping them with. So it comes down to if you know your parents need financial assistance, don't wait until they actually need it. Like anything else, literally create an item in your spending plan and start putting money into that account.
So start saving as soon as you can. The next thing is going to be when ready. This is assuming maybe you're not needing to send it over. For example, could be think of the version of like long-term care savings account. But then of course, when you're ready, you need to send that money overseas to them. And we've talked about all these different options for sending money over. You know, I think I can think of like remit. Um, I don't know if you can think of others, maybe direct bank.
transfers. I'm thinking WISE, maybe Zoom, and there's a couple others that you can use to send them money overseas. But as you send this money overseas, there are very specific things we need to be thinking about, which is where, minus you come in, as far as these accounts are concerned, that we're sending money over to. Do you want to talk about that as well as maybe the exchange rates and that kind of thing? You know exactly what I'm talking about?
Manasa Nadig, Enrolled Agent (19:54.885)
Mm-hmm.
Manasa Nadig, Enrolled Agent (20:17.931)
Yes, yes, I do. And thank you. You know, when, when what Jane was talking about just now is when you're sending money abroad, where's that money going into? Is it going into an account that is in your name? And if you have a signatory authority on that account, then, you know, as you're sending that money, how much is the balance in that account in that foreign country?
And if it crosses the thresholds for FBAR and or FATCA reporting, then make sure that those accounts are included in your US returns when you're filing your taxes. And also be cognizant of the fact that when you send this money to your parent, how will that money that your parent
tax-wise, will that country consider it a gift or will it consider it income? And make sure that you're working with professionals in the country to understand if that will affect your parents' tax return, and sometimes put them into maybe a different tax bracket itself because this could be a large chunk of money at one time. So then you may have to plan
to make sure that it's reduced, if it means that they are going to end up paying taxes on it, or maybe report it as a gift, or pay gift taxes, et cetera. And yes, exchange rates play a big part in all of this, right? Like if you're looking at a country that is on par, maybe one of the European countries where you're sending dollars and they're receiving euros, it might not.
end up being a big deal. But if you're sending money to a country somewhere in South America or in Asia, then the dollar amount might not be very large. But the local currency might end up being a large sum of money. So again, going back to what I said earlier, how will that affect your parents' taxable situation for that year? So you know,
Manasa Nadig, Enrolled Agent (22:44.063)
that definitely is something that you should be thinking about when you're sending money overseas, not just for yourself but for your parents as well.
Jane Mepham, CFP (22:53.71)
I like it. So the other part, I guess, sort of in terms of the financial support, and you did allude to it with the family dynamics, do you have siblings that can help you? Hopefully you don't have to take these all on yourself, but if you have siblings who could be back home or they could be in the US or other countries, how about bringing everybody together? So you can sort of pool your resources.
Jane Mepham, CFP (23:23.784)
siblings, I have siblings back in Kenya and I have siblings in other places is we've created a WhatsApp group literally just for us and we sort of discuss all the family things going on and who needs help and as part of that we've actually created some accounts literally that we call family support accounts and so we all contribute a little bit of money to this account
And so whenever somebody needs help and I'm thinking now this, for example, with your parents, it's way easier for us to say, Oh, you know, this account where we've been saving money, we're able to pull out of that. So bring your siblings into the picture. You shouldn't have to take on this alone. The other thing to think about is I understand because, you know, when you're on visas, you may not be able to travel as frequently. And that's a big concern.
It's okay to sort of look for a network around you in your home country, reach out to people that can hopefully help with maybe helping take care of your parents, sort of like, I would think of them like a case person here in the US. So reach out to your neighbors, reach out, they're now professional networks that are actually doing some of this work. I've seen quite a bit of that now in Kenya and it's probably the same thing in India
where you find a professional that can sort of have a network around your parents and they can help you're the one finding it. I get it. Or you and your siblings and the family, but at least you have somebody there that can go out and help on, on let's say an emergency case is it's like somebody needs to go check on your parents. You can have that person.
So family is going to be really key and again I know with all these cultural norms it's a bit of a minefield. So the thing I'll say is we already talked about being patient, respecting your parents is don't stress about it too much. There's only so much that you can do. So do what you can but don't...
Jane Mepham, CFP (25:39.202)
go into too much stress. Otherwise it could end up really messing you. You're doing the best that you can. Keep doing what you can, but again, don't let it kill you for lack of a better word. Anything else you wanna add to that, Manasa?
Manasa Nadig, Enrolled Agent (25:58.039)
No, that was a perfect wrap up of this episode, Jane. With parents, we are emotionally still attached to them, even though we may have moved to another country. And for those of us who are still taking care of them, even though we live in the United States, I think all of these points are something that should help at least start.
you thinking about what you can do and you know reach out to professionals if you think you need help. I think that's a great wrap-up for this episode.
Jane Mepham, CFP (26:40.526)
Thank you so much. It's always fun to chat about some of these issues. And I suspect this is probably one we'll come back to because as I said, these are some of the issues that we're all dealing with. And so everybody, this is Jane and Manasa saying bye and look forward to having you join us on a new episode. And remember, you can find this on the imcafé.com, imcafé.com. This is our website where we're putting more
resources pertaining to experts and foreign born individuals in the US. So until then, thank you and bye.
Manasa Nadig, Enrolled Agent (27:20.964)
Bye!
