Sitting down with a new client, I encountered a common, rather disheartening tale of inheritance gone awry. The legacy that her father had carefully planned through a “transfer-on-death” (“TOD”) account with a U.S. brokerage firm seemed straightforward, but the reality of accessing the funds was very different.
Misunderstanding transfer-on-death accounts
The scenario was as follows: The father had, with the best intentions, set up a TOD account. The very title seems to promise a simple, direct transaction upon one’s passing. Yet, when the time came, the brokerage firm cited her father’s non-U.S. residency as a stumbling block, overturning the expected transition. Instead of an immediate transfer, the family faced the unexpected burden of a protracted probate process.
This experience underscores why a cross-border financial planner isn’t a luxury; it’s a necessity. Such pitfalls aren’t just inconvenient; they’re emotionally taxing. And that’s where a cross-border professional, a Global Financial Planner TM becomes invaluable. We highlight potential problems before they happen and offer possible solutions. In this case, for example, since we know that TOD accounts don’t work well for overseas clients, we help them structure their estate plan so their heirs have a smoother ride.
Beyond making a will: Guiding heirs and finances
When it comes to wills, many lawyers often concentrate solely on their creation, leaving out the important steps that inheritors must eventually take. Crafting a strong will involves both legal expertise and effective collaboration with financial institutions.
As cross-border financial planners, our expertise extends beyond portfolio management. We have a great deal of experience in estate asset distribution, we guide clients in preparing for the inevitable second phase – ensuring a smooth transition of assets to beneficiaries, and help inheritors navigate the bureaucracy of receiving their inheritance.
The path to secure inheritance management
It’s in unfortunate situations like these that the value of a cross-border financial advisor becomes evident. Our aim is to clarify complexities for our clients. We prioritize foresight by assisting clients in designing their portfolios to align with their objectives. In our client’s father’s case, partnering with us could have averted the misconception that transfer-on-death accounts are a simple way to transfer assets from one generation to the next.
To learn more about our inheritance services, go to: www.Profile-Financial.com/inheritance-intro to watch a brief video message from me.
Douglas Goldstein, CFP®, GFP®, is the director of Profile Investment Services, Ltd. www.Profile-Financial.com He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.
Published October 24, 2023.