Keep It Simple
Nick Hodges, who works with advisors to handle the tax aspects of their expat clients, says the planning side can be greatly simplified by keeping the bulk of a client's investments in the U.S. He does recommend setting up a local bank account in the client's residing country, though.
And for clients who own overseas real estate or businesses, he notes that people who collect rents and have income from businesses with no operational ties to the U.S. can defer taxes on profits until the money is brought back to the U.S. But he notes this issue is being scrutinized by the Obama administration, and that significant revisions could be in the offing.
Despite the complexities of expat finances, Hodges says financial advisors shouldn't shy away from handling such clients. "These people tend to be optimistic, are problem solvers and are generally adventurous," he says. "From an advisor's standpoint, they're wonderful people to work with. But you have to know where your edges are so you don't go beyond them and get them into trouble."