The Permanent US Tax Nexus
One of the most sobering realities of being a "Global Citizen" with US roots is that you are essentially locked into the US as your primary tax nexus. Whether you are a citizen or a Green Card holder, the US government claims a right to tax your global income and your global estate. Unlike almost every other country on earth, the US taxes based on citizenship , not residency .
This creates a significant layer of complexity for our $4M portfolio. Even while we live in China and spend RMB, our legal and financial anchors remain firmly planted in US soil. We are participating in a global life, but we are doing so through a Western legal filter.
Work in Progress: A Learning Note
Because we have only recently moved, I don't have an exhaustive set of advice yet. Estate planning across borders is a specialized field involving tax treaties, gift tax exemptions, and reporting requirements (like FBAR and FATCA). What I do know is that ignorance is expensive.
High-Level Advice: Simplicity is Safety
The secret to keeping global taxes manageable is to avoid Jurisdictional Sprawl . Taxes aren't actually that complicated for global citizens unless you start buying a lot of foreign investments, local real estate, or complex offshore business interests.
If you keep your primary capital in US-based brokerages, your reporting remains remarkably straightforward. You essentially just need to monitor your thresholds for three key requirements and work with a competent expat accountant:
- FBAR (FinCEN Form 114): Required if the total value of all your foreign financial accounts exceeds $10,000 at any time during the year.
- FATCA (Form 8938): Required for higher thresholds of foreign financial assets (starting at $50,000 to $200,000 depending on residency).
- Local Compliance: Ensure you understand the tax residency rules of your host country so you don't accidentally trigger a local tax event on your US distributions.
The Strategic Starting Point
While we refine the long-term plan, we are sticking to our Infrastructure Principles :
Keep it US-Centric
We keep the vast majority of our $4M assets in US-domiciled accounts. This simplifies reporting and ensures our core wealth is protected by US law while we navigate foreign residency.
Document Everything
Our "SOP for Heirs" is even more critical now. It must explain not just the math, but the Reporting Requirements that heirs will need to follow to stay compliant with the IRS.
Professional Counsel
Cross-border estate planning is not a "DIY" project. We are vetting firms that specialize in US-expatriate tax law to ensure our legacy remains durable.
Final Take (For Now)
Don't assume that moving abroad deletes your legal obligations. If you have built your wealth in the US, the US will always be a stakeholder in your estate. We are treating this as a new "Mastery Project"—learning the rules of global compliance so our family’s freedom remains uncompromised. The journey continues.