Does your estate plan need to be reviewed for international considerations?

It's no surprise that we live in a global world, with family and work connections that cross continents. The question is, does that mean we need to see estate planning any differently? Can citizenship or residency or domicile have an effect on estate planning?

I asked William Kambas, a partner in the U.S. Private Client and Tax team at global law firm Withers Bergman LLP, for guidance.

The list of legal and probate considerations is a long one when international issues are involved. Most important is getting guidance on applicable laws in each country where assets are held; identifying potential conflicts between different legal systems (for example, multiple countries that seek to tax or restrict asset transfers without credits); and ensuring compliance with international inheritance laws.

Next, you'll need to assess estate taxes in each country; anticipate possible currency exchange and financial transfers; and coordinate with tax advisers to avoid double taxation -- defined by the IRS as taxation of the same income twice (tinyurl.com/mv8d6zar).

Tax treaties come into play. "The United States is a party to tax treaties designed to prevent double taxation of the same income by the United States and the treaty country," states the IRS webpage "Foreign Tax Credit -- Special issues" (tinyurl.com/yyh72542). Also see the IRS webpage on tax treaties (tinyurl.com/54r8ryth).

The actual administration of the estate and the distribution of assets also take extra care, including asset appraisal and inventory across jurisdictions; the proper documentation for international asset transfers; and the distribution of assets according to the will and local laws. Recordkeeping and due diligence (checking and double-checking titling of assets and insurance policies and their holders, among other associated asset-holding matters) may call for the help of a trusted adviser or a family office.

What needs to happen when someone with international connections passes away? Kambas, who often guides ultra-high-net-worth clients, their family offices and fiduciaries, offered this list:

-- Obtain multiple copies of the death certificate (needed for legal and financial processes)

-- Locate and review the will (check for international provisions)

-- Confirm the jurisdictions where probate or inheritance processes must be filed

-- Secure assets (real estate, bank accounts, investments and valuables)

-- Notify beneficiaries and heirs

Legal and probate considerations:

-- Determine applicable laws in each country where assets are held

-- File for probate (or similar process as might exist) in relevant jurisdictions

-- Appoint local legal representatives, if required

-- Identify potential conflicts between different legal systems (multiple countries seeking to tax or restrict asset transfers without credits)

-- Ensure compliance with international inheritance laws

Financial and tax responsibilities:

-- Obtain an estate tax identification number (EIN), if required

-- Assess estate taxes in each country

-- Coordinate with tax advisers to avoid double taxation

-- Identify outstanding debts and liabilities

-- Anticipate possible currency exchange and financial transfers

Asset distribution and administration:

-- Inventory and appraise assets across jurisdictions

-- Transfer ownership of real estate and financial accounts

-- Ensure proper documentation for international asset transfers

-- Distribute assets according to the will and local laws

-- Close accounts and finalize estate administration

Of course, it helps to take initiative while family members are living and in good health. It may also help to project into the future -- or, in Kambas' words, "to create road maps of the process" so family offices and fiduciaries (as well as family members themselves) can be prepared well in advance of the actual transition.

To familiarize yourself on the topic, check out the Withers website at tinyurl.com/4hn93chh, as well as resources provided by the International Bar Association, a not-for-profit corporation that offers estate planning guides for more than 40 countries at tinyurl.com/2s39s5kf.

My final word of advice: Don't wait to engage in a review of overseas assets and non-U.S. connections. Give yourself plenty of time to learn about potential complications and to determine whether you need to engage expertise.

On another note, the national 401(k) Champion Award, which honors 401(k) participants who not only maximize their 401(k) benefits but also inspire others to do the same, is now accepting applications for the 2025 competition. Find out more information at 401kchampion.com.

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION

When I was speaking with a trusts and estates lawyer a few weeks ago, alongside a mutual client, the subject of "unexpected" inheritances came up. The lawyer mentioned that a client of hers unexpectedly inherited $35 million from a parent and found herself unprepared to prudently handle the financial decisions she would be called upon to make.

(Full disclosure: As investment counsel, my firm prepares client families for wealth transitions as a matter of course, while preserving confidentiality of the dollars involved.)

Wealth transfers of this size do occur, and more are likely as time goes on.

Cerulli, a research, consulting and analytics firm that focuses on the financial services industry, projects that through 2048, $105 trillion will flow to heirs, with another $18 trillion going to charity (tinyurl.com/4mfvxjtw).

About one-half of this figure is expected to come from only 2% of U.S. households (high-net-worth and ultra-high-net-worth individuals). The vast majority (81%) will transfer from baby boomers (born between 1946 and 1964) and older generations, as might be expected. Further, about one-half of the dollars flowing to heirs is expected to be passed on to spouses first before eventually transferring intergenerationally to heirs and to charities. Nearly $40 trillion of these spousal transfers will be going to widowed women in the baby boomer and older generations.

Let's return to my conversation with the lawyer. What about the element of surprise? Should parents involve their children in their estate plans, including sharing the size of their estates? From my perspective, the answer depends on family dynamics. The general rule that protects all interests is to share information strictly on a need-to-know basis. For most families, that rule translates into discussions without dollars.

What falls under need-to-know for most families? The minimum to share is the fact that an estate plan is in place, the location of the original will, and the contact information for the estate planning attorneys, financial advisers and accountants. If family members are named in any documents, including wills, trusts and, of course, health care proxies or powers of attorney, they would want you to talk about their roles.

What about the person receiving the inheritance? In most cases, parents leave inheritances to their children if widowed or divorced. If married, spouses leave money to their surviving spouses. In either case, ultimately, according to Kay Hope, research analyst at Bank of America Global Research, "women will receive most of it," according to an article on CNBC.com (tinyurl.com/5bh43j6u).

By Hope's calculations, women will inherit the majority (70%) of the $124 trillion wealth transfer over the next 25 years; some of it will transfer first to surviving spouses, then to their children.

According to the Bank of America Institute's recent Women and Wealth report, roughly $54 trillion will go to surviving spouses, most of the time (95%) to the wife.

As a result of the great wealth transfer, which is already underway, "women will soon control more money than ever before," according to Bank of America.

Does this trend raise the question of the need for targeted education? Should women be alert to educating themselves about wealth generally and wealth transfer in particular? Is gender relevant to the recipient? What if you were the surprised recipient of the lawyer's news that you inherited assets, perhaps even millions of dollars, from your parents? Would you be prepared to handle the newfound responsibility that a wealth transfer triggers? If these questions raise even more questions, let me know (readers@juliejason.com). I'll follow up with additional columns on the subject.

On another note, as part of my pro bono financial literacy efforts, I sponsor the national 401(k) Champion Award Competition (401kchampion.com), which honors 401(k) participants who not only use their 401(k)s wisely to save for retirement, but also encourage others to do the same. The essay competition launched on June 15, National 401(k) Champion Day, which was celebrated for the first time on June 15 of this year (tinyurl.com/58e78zjy). There are no costs to enter the competition. Three 401(k) Champions will be announced on National 401(k) Day, Sept. 5, 2025.

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Whether in paper form or digitized, there are two issues to consider when it comes to financial documents.

First, how do I prevent identity theft? Second, what do I need to keep, and what can I dispose of?

It seems we are more alert to potential identity theft by mail, email or phone, and less so when it comes to documents you use and keep at home or at your office. The Federal Trade Commission tells us to protect documents that contain personal information. What documents? Social Security and Medicare cards, financial records, prescriptions for medications, old driver's licenses, credit cards, checkbooks, cancelled checks and anything that contains your identity.

Iron Mountain, which provides storage and information management services, adds these items (tinyurl.com/3szwz8np):

-- Junk mail ("your personal data may be included in those garbage mailers and credit card offers"). Note that you can opt out of junk mail and prescreened credit offers at the FTC's "How to Stop Junk Mail" page -- tinyurl.com/bdh4b9sv.

-- Medical prescription labels (they "contain private information, including your name, contact information, and doctor's name," which means "someone could ... get access to your health care information and medical background").

-- Photos and old IDs ("Thieves can use your old pictures or IDs maliciously to fake their identity").

-- Travel itineraries (thieves "can use your travel itineraries to rebook flights and hotels or gain access to your accounts").

-- Resumes and curriculum vitaes ("Because resumes often contain personal information, like telephone numbers, email and home addresses, and job or education history").

-- Shipping labels ("Double-check your boxes before you recycle or reuse them").

-- Memos and notes (The notes "likely contain personal information that you don't want identity thieves to get their hands on." An example: "Did you scribble any passwords while on a call with IT?").

The concern, according to the FTC (tinyurl.com/mk6c45u3), is identity thieves stealing "your name and address, credit card or bank account numbers, Social Security number, or medical insurance account numbers. And they could use them to:

-- buy things with your credit cards

-- get new credit cards in your name

-- open a phone, electricity or gas account in your name

-- steal your tax refund

-- get a job

-- get medical care

-- pretend to be you if they're arrested"

In 2024, the FTC's IdentityTheft.gov website received more than 1.1 million reports of identity theft (tinyurl.com/4na2zyy2).

Given that concern, some documents do need to be kept for a while, but not forever.

The FTC recommends keeping these financial documents for a year: bank statements, pay stubs, credit card and utility bills, deposited checks and undisputed medical bills. The FTC adds: "If you can access these documents electronically, consider shredding your paper copies" (tinyurl.com/vb4mz87c).

The IRS recommends three to seven years or longer based on the type of document (and an "indefinitely" timeline for certain situations -- if you did not file a tax return or you filed a fraudulent return).

"Generally, you must keep your records that support an item of income, deduction or credit shown on your tax return until the period of limitations for that tax return runs out. The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or the IRS can assess additional tax." See the IRS webpage "How long should I keep records" (tinyurl.com/4fjfhpys).

Other documents fall under the category of keeping them while you own the items, such as the title to your vehicle, the title or deed to your home, and sales receipts and warranty information for major appliances.

Finally, there are certain documents you should keep forever (and lock up), according to the FTC. Among them:

-- Birth certificate or adoption papers

-- Social Security cards

-- Valid passports and citizenship or residency papers

-- Marriage licenses and divorce decrees

-- Military records

-- Wills, living wills, powers of attorney, and retirement and pension plans

-- Vital health records (especially those that pre-date electronic health records)

-- Death certificates of family members

You can find additional information about identity theft at the FTC's "What To Know About Identity Theft" page (tinyurl.com/mk6c45u3) and its IdentityTheft.gov website.

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION