Jane Mepham, CFP (00:03.136)

Living and working in the US on a work visa is a unique path that millions and millions take. You're trying to build a life in a place where you're not certain about the future. This brings up some very serious challenges that may not be faced by others around you if they are not on a work visa, which is really hard for others to relate to.

We've seen it in our practices and in our lives.

Also, we know you want to live your best life and you want to make optimal decisions about how you'll deal with the complex tax and financial obligations while trending this path. And so in today's episode, we're going to address some of these challenges and in particular, we're going to address one very specific challenge.

And at the end of this episode, we'll give you a possible solution of dealing with this.

Challenges On A Work Visa

Manasa Nadig, EA (00:59.127)

Yes, we, Jane and I, have walked this path and we work with many professionals and clients who are on work visas. So we understand what these challenges are. And there are many efficient strategies to mitigate these challenges and continue to build your dream around what we call a temporary permanence.

So What are these challenges? It could be a lack of clarity about your financial future. You may be worried about a job loss, et cetera. We have another episode that relates to this and we will link it in our show notes.

Another challenge is obviously about taxation. A very complex tax situation for those with a footprint in two different countries. State and international, you know, and so on.

You do have a challenge with uncertainty about retirement and how to go about saving for it. And where will you be when you retire?

Basically, you could also have the challenge of being confused about where to invest, whether you would want to buy a home, if that is a good idea for you to buy a home.

And if you do want to make big purchases, would credit or debt be easily available to you?

You could also have a challenge of where you're wondering whether you should have a long-term plan of building a home here in the US or back in the country where you may want to go back.

You may have children who want to go to college in the US, or they may be born here in the US.

O they may have come with you here on a visa. And you may be wondering how you want to save for college if that's what their plan is.

Also, you may have travel restrictions because your passport is not a US passport.

And so there might be unique visa restrictions.

Manasa Nadig, EA (03:25.33)

And another big one is, of course, estate planning. And how do you go about thinking about that? And planning for it. So those are some of the challenges, right, Jane?

The Challenge Of leaving The US While On Work Visa

Jane Mepham, CFP (03:32.094)

Yeah. And the interesting thing is as you're going through the list, I'm kind of checking them off thinking, yeah, I've dealt with that. Yeah, I dealt with that.

Yes. I remember the travel challenges. So this is real to us, but I think the challenge I want to highlight to deal that I want us to talk about today is the idea of leaving the U S while you're on a work visa. This is becoming real. We're getting a lot of where people are saying because of the political situation, for example, we're concerned that we may need to leave in a hurry, that's one, or because of the visa issues. You know how for some people the priority date is so far out, chances are even though they've been approved for the green card, they'll probably never get it in their lifetime.

And so we're getting a lot of, yeah, I think. When I'm ready to leave, there's a lot of things that I do want to have to deal with.

And so the question is, if you're on a work visa, how do you leave in parentheses or in quotes in the right way? And by leave in the right way, what I'm talking about is how do you leave the US in a way that does not jeopardize your current and future taxes, finances and your life.

You've so, so hard to get to where you are, to see what you have, that it's important that we plan for this. And so we want to talk about the careful planning for your financial interest and legal standing to make sure everything is protected in the U.S. And so what we're going to do is sort of break this up into the different challenging areas that we see or that we want to deal with.

as you prepare or as you think about leaving the US, well, you're on a work visa.

Manasa Nadig, EA (05:32.663)

Yeah, I know. We must have used the word challenge quite a lot by now. So you kind of get the idea. However, breaking this down may help you feel like you can take this on without help. So the first one is the financial exit strategy. Now, the financial exit strategy kind of revolves around

Jane Mepham, CFP (05:37.646)

Yeah.

Manasa Nadig, EA (06:01.973)

A couple of things. One is what are you going to do with your retirement accounts when you have to leave? Very quickly, you may have to understand rollover options, withdrawal rules, tax implications for 401ks and IRAs when you are moving abroad.

The second one in this strategy is your tax obligation. So what would your tax obligation be? Would you need to file final tax returns? You would need to understand exit tax requirements if those are applicable to you. And if this situation applies to you, then you have to plan for ongoing US tax reporting obligations even after you have left the US.

The third one is a banking relationship.

What would you need to do if you have to maintain US bank accounts if that is needed for your ongoing tax obligations and other financial obligations?

And you may also have some FATCA reporting from the other side. The fourth financial exit strategy revolves around investment liquidation. And this is something that Jane is always helping clients work with, the investment liquidation is the timing of the sale of the investments and real estate strategically to minimize your tax impact.

Jane Mepham, CFP (07:46.54)

So let me jump into the next, I'm still going to use the word challenge, right? Or category. This would be the legal and administrative category or challenges or things you need to think about. So the first one is we know you're here on a work visa. You want to think about the visa compliance. And this is probably one where you might want to talk to a legal person.

But anyway, the key thing is you want to ensure proper departure procedures to avoid future immigration complications. I think that's all I'm going to say about that. You've also accumulated a lot of documents over the number of years you've been here. So document preservation is something else you want to think about.

So you want to make sure you've secured copies of all your tax returns, literally all the tax returns you've ever done, immigration documents, employment records, anything that shows your life financially legal in the US. And then we also need to think about professional licenses, depending on what you have.

Is this something you hope to continue using, wherever you're going to go to? So you want to understand how to maintain or transfer some of those professional certifications.

And then there's a whole idea of healthcare continuity. You need to plan for insurance gaps, although we know once you leave the US that's it, but it's probably more around medical record transfers. You want to make sure you have those. So if you're going to go obviously look for another doctor, you have something that you can share with them.

It's pretty much thinking about how do I move my life from here to another country when there's a possibility I may not be, I may not be able to ever come back to grab some of these things.

Asset Protection

Manasa Nadig, EA (09:44.427)

I know. That kind of takes us right into the next one, right? When you're thinking about moving, the next thing is asset protection. So the asset protection part of it is something that would, or if it was me, I would lay awake for...

days on end trying to figure things out because these are not easy decisions. The first one in your asset protection would be the decisions you need to make around real estate. So if you own property or you've bought a home and or other assets around real estate, you have to evaluate whether you want to sell that immediately.

or you want to maintain that as rental property. And if you did decide to maintain that as rental property, then you have to put into place proper management aspects that would take care of things when you're gone. And then there is the credit preservation part of the asset protection. And this kind of gets a little more tricky.

And the part of a credit preservation is where you have to maintain your credit relationships that might be valuable for you if you decided to continue to do or make investments in the US, even if you were living abroad or you have future plans for business ideas in the US. And speaking of business, if you already have a business in the US which you have to leave behind, then you have to make sure you have properly wound up all of those interests if you're putting those to an end, or you have transferred any business ownership or any other ownerships you have in partnerships, or also you may want to think about your tax obligations in the country you're moving to if you have business interests in the US. So those are the asset protection part of it.

Jane Mepham, CFP (12:00.204)

So actually, Manasa, let me add one more thing here. You talked about credit relationships. The other one we want to include here is your identity protection. Because once you leave the country, it's easy for somebody to steal your identity and you may not have a way of protecting it. So you want to make sure that's locked tight before you leave to avoid that

Manasa Nadig, EA (12:11.341)

yes.

Manasa Nadig, EA (12:14.894)

Yes.

Jane Mepham, CFP (12:26.198)

And then I think the other one here is estate planning. You talked about asset protection. So how do we ensure on top of that, that if you leave anything behind, you will not be taxed punitively, which is what happens when you leave your side as assets. that God forbid something happens to you that these would go to the right people.

Somebody the other day said to me, I don't mind paying IRS what I owe them, but I don't want them to get anything that they should not get.

And so I say, it sounds like you're talking about us doing some estate planning. So I think we want to include that. The next category is what we are calling family considerations. family considerations, really, it's about your immediate needs. So we're thinking about, let's say, your children.

So your children's status, right? If your kids by the time you leave a US citizen, though we know that could end up changing with what's happening, you do want to have the proper documentation. Make sure you secure the documentation for those kids, as well as plan for their future access to US benefits. So do they have a birth certificate from here, for example? Do you have the US passport? Those are the things you want to think about.

Also think about their schooling needs. Whatever school they've been attending, you want to make sure you can obtain all the transcripts and records that may be needed for future educational professional opportunities, wherever you're going, because you don't want to go somewhere and they're like, we don't think these kids have whatever education you claim they do. So you really want to make sure you have that.

As well as we already talked about the medical records, the social security, that's another.

big one and we actually have a whole episode on this. So we'll link to that. You want to understand the future benefit eligibility and how you'd go about claiming it from abroad, assuming you qualify for that. And so I think then the next thing is to think about timeline. Manasa, what do you think about the timeline?

Manasa Nadig, EA (14:41.983)

I know, considering all of these and again, challenges that you have with moving outside the US, what is the timeline management here that we're talking about? So definitely you need advanced planning. So you need to begin your exit planning at least 12 to 18 months before your intended departure, if that is a possibility.

If it is not, definitely whatever planning that you can do in the time that you have before you leave the US, that's very, very important. Professional transitions. This is a very touchy subject, especially if you have been let go from the job that you're on.

So managing those career transitions thoughtfully and maintaining your professional relationships and references is also important. I was talking to somebody this week and this was something that they said which really kind of left me wondering about all of these different challenges, of course, that people have when leaving the US.

They said that even though they had been let go from their job, they were trying to keep a positive mindset so that they could go back to the country they're from and look for something there and find a different way of doing things so that they could continue to build their dream, but back in the country where they were going to go to.

So those are, but it's still important to maintain those professional relationships references, especially when you want to continue to work in the same field. And finally, the final obligations, which we just mentioned, the estate planning is part of this final obligation. Make sure that you've put those things into place like bills and trusts, et cetera, if need be, and show all your financial and legal obligations are properly closed and transferred. And this includes, of course, identity protection. So.

Manasa Nadig, EA (17:02.879)

All of these final obligations, financial, tax, legal obligations, should be properly closed and transferred. So these are the important ones that come under timeline management. Anything else you want to talk about, Jane?

Jane Mepham, CFP (17:20.43)

I actually think you've addressed it. The key thing is if you have the time, yeah, follow the timeline. But if you don't have the time, just you did say move ASAP. So I think you got it right. And so when I think about it, when we think about it, the work visa journey is ultimately one of adoption, right?

So it's the idea of learning to live in a state of temporally permanence. And I really like that. think we're to be using that terminology a lot. Temporally permanence while continuing to build a meaningful life, whether it's here in the U S or whether it's back in your home country or wherever you may end up moving. It can be done for sure.

Manasa Nadig, EA (18:09.415)

yes, yes. The temporary nature of your visa status does not in any way diminish or lessen the value of the life that you have built here. It just may add a few layers of complexity. And

if you can manage that in a good, thoughtful way, I think that it can definitely lead to a richer and more intentional decisions you make about your career, about your family.

And your future. I know that this might come across as a little preachy, but in the end, the work visa experience does teach us a most valuable lesson, that is, how do we build a meaningful life anywhere we choose to live? Well, considering that there are so many things to think about in this big move that you have to make outside the US.

The Complete Departure Checklist From The U.S. When On A Work Visa

Jane and I have put our heads together and we have built the complete checklist, the complete checklist, dear listener, for non-immigrant visa holders leaving the US. And it is almost a 50-something page checklist, I have to tell you.

And also to celebrate 50 episodes on our podcast.

We are now giving it at a discount of $50 for the next 50 days. Everything 50 here. So go to our website. You know that is theimcafe.com and grab it and let us know what you think about it once you have it. We will love your feedback. Thanks for listening. Looking forward to being with you all on the next one in two weeks. Bye.

.Jane Mepham, CFP (00:04.492)

What is English for life insurance, and how does it apply in a cross-border context?

In today's shortie episode, where in 10 minutes or less, we pick a term used in the cross-border space, we'll talk about what life insurance is, very high level, and whether you need it or not, and when you'd need it in a cross-border context.

Manasa Nadig, EA (00:30.707)

Alright, so Jane, what is life insurance?

Jane Mepham, CFP (00:35.936)

Okay, like the way you just jumped into it, but that's perfect. So, I'd like to think of life insurance as a contract between you, the insured and the insurance company. And essentially, what they're saying is you pay us a certain amount of money over a certain period of time. Obviously, there's more into it, and God forbid you get hit by a bus, we'll give a boatload of money to the person you've appointed to the beneficiary. In other words, think of it as we're replacing your income. So, if you have kids or family overseas, you're supporting and you were not there, what happens to them?

Manasa Nadig, EA (01:21.459)

That's essentially what life insurance is. Now, can we talk about what are all the different types of life insurance?

Types Of Life Insurance: Term And Permanent

Jane Mepham, CFP (01:32.96)

Okay, again, high level, this is a shortie. There are two types of life insurance that we commonly discuss in this space. One is what's called term life insurance.

Term life insurance gives you a certain amount of time, right? So, you buy a policy for let's say 30 years and you pay more or less the same amount, although you do have different ways of paying it, once the 30 years are over, you're done.

Sort of like the car insurance. If, during those 30 years, something happens to you, your beneficiary will receive a payout of whatever the face value was. So, let's say you do something like a 30-year term, with a million dollars, and 25 years into it, something happens to you; your beneficiaries will receive the $ 1 million.

And then the second type of life insurance is what's called permanent life insurance. And under this, there's two, there's whole life and there's universal, but I won't go into the details.

The main differences, there's a death benefit, one, but there's also what's called a cash value. So, something happens to you after a certain period of time, your beneficiaries will get a certain amount of death benefit, but there's also a certain amount of cash that goes along with that, that you can actually take out at some point, depending on the details of the contract.

These ones tend to be a little bit longer, so you can go to a hundred years or something like that. And that's key for the next thing I think you might ask me, but let's move on.

Manasa Nadig, EA (03:14.108)

Yes, you guessed it. Next, can we discuss what type of insurance would be suitable, especially in a cross-border context?

Life Insurance And The Cross-border Considerations

Jane Mepham, CFP (03:30.702)

Okay, so the people that we work with, have foreign nationals and work visas, and we know these work visas are non-immigrant visas, so the assumption is, or not the assumption, you're going to be leaving the country at some point at the end of your term, unless, of course, you end up getting the green card and you end up staying.

And then we have the second group, they're already here on green cards, or they're U.S. citizens, but they have assets, or they have ties overseas.

And then you have U.S. expat, which are U.S. citizens or green card holders who live overseas. So, when I think of that group, and this is where each case is very specific and needs to be custom designed, but at a very high level, if you're the main breadwinner for the family and you're supporting kids and family overseas, the term life insurance...most likely makes sense for you.

Again, remember, we're just trying to replace you. This is not about wealth building; we're not thinking of that. We're just replacing you in terms of support. And so, if you're working and a W-2 employee, term life insurance makes a lot of sense.

The only difference is, or the key thing to watch out for is, the time-life insurance from a company that's willing to pay out, pay to your beneficiaries, regardless of where they live.

And those are the type of companies that we use in all practice. As long as you continue paying the premiums, and we can discuss how you do that, and you end up leaving the country, you will continue paying for 20 years. If something happens to you, these U.S. companies should still be able to pay your beneficiaries that amount.

That’s probably the best case for term life. And it's almost what I advise everybody to get.

Using Life Insurance To Mitigate The 60k Estate Tax Exemption

The second case, the permanent, the universal, the whole life portion of it, the best-case scenario for it when you're in a cross-border context is if you become an NRI, non-resident, which is a word alien, but that's what the IRS uses. You know what I mean.

Jane Mepham, CFP (05:47.254)

And you're not in the US anymore and you have what's called U.S. Situs asset. This is, let's say, shares, property, and you're not here, there's a very high possibility that your estate taxes, the exemption you have is 60K, not the current 15 million that almost everybody else has.

So if your exemption is only 60k what this means is God forbid something happens to you your family most likely will have to sell everything because they need to pay 40 % taxes on anything over 60k so this is a really good use case for a permanent contract because you wanted to go on for a long time but of course you'd want to make sure you find the right people to design this for you so something happens to you there's this estate taxes your family needs to pay, the life insurance will pay out.

Because remember, at that point, it's not going to be taxed. It covers the taxes and your family can enjoy the money.

And so those are probably the two use cases that I can think of right now, contrasting use cases in the cross-border context when it comes to life insurance. There's a whole lot of other use cases, but I think those are probably the two main ones that would apply to just about everybody in this space. Does that answer your question?

Manasa Nadig, EA (07:17.391)

Yes, that perfectly answers all our questions and I'm sure it answers our question on “what is English for life insurance?”. So now that we've learned about that in this shortie episode, thanks for listening to friends and thanks for stopping by.

If you like the content we share, please go to our website, theimcafe and subscribe to our newsletter and you will know ahead of time when our episodes are dropping. So thanks for stopping by.