$60 billion in real estate
When it comes to exposure to excessive estate taxes, perhaps no investment group is more familiar with this issue than foreign nationals. This is a topic worth discussing simply due to the fact that in 2013 alone, foreign nationals' investments totaled well over $60 billion in real estate throughout the US. That said these metrics are likely to only increase in the coming years as more people from around the world discover the value of investing in property in cities across the United States.
Appealing To Buyers
However, there has been a growing concern among many people making these types of investments with regard to exposure to substantial estate taxes. While the real estate market in the United States has been sporadic at best over the last few years, the opportunity to purchase property in the US is still very appealing to buyers from around the world. The US is known worldwide for governmental stability, favorable property rights and a stable and established national currency. These advantages continue to attract investors from all parts of the globe.
Most Sought After Regions
Perhaps no other state in the country makes it more obvious how appealing US real estate is to foreigners than Florida. South Florida in particular and Miami specifically are considered by experts to be the most sought after regions by international property buyers. California is also very high on the list because of its general overall appeal and desirable lifestyle. That being said, it is essential for foreigners buying property in the United States to have access to experienced and focused estate planning services.
Substantial And Overwhelming
Whether it is California estate taxes or Florida estate taxes that come with buying property as a foreigner, one thing is sure and that is that estate tax exposure can be substantial and overwhelming. In fact, the tax implications for foreign-nationals can turn what would otherwise be a favorable purchase into a confusing tax quagmire. Ubiquitously, US citizens enjoy over $5 million in estate tax exemptions while foreign nationals are limited to just $60,000 in total estate tax exemption. These numbers in themselves do speak volumes.
Because affluent foreign nationals and those from other countries with high net worth typically purchase real estate that is substantial in value it is important to always consider tax efficiency as a foreign investor. Even more alarming is the fact that tax rates can also have a big impact on a legacy or an estate of those choosing to own property in the US. Beneficiaries, heirs and others named in a will or other estate documents could be burdened with tax rates up to 40% of the actual value of a vacation home, for example, at the time of a principal's death.
Succession Of Wealth
All said, one established, proven and accepted practice for protecting an estate or legacy is to consider the strategic use of a carefully chosen life insurance policy. This is simply due to the fact that current US tax laws view life insurance purchased by a non-resident foreign national as not being a part of an individual's gross total estate holdings. This is of prime concern because at the time of the death of the principle, any succession of wealth is not taxed and remains intact for heirs. Further, using this accepted strategy can also help to ensure that beneficiaries and heirs will have the financial wherewithal needed to address US estate taxes.
Value Added Services
Finally, another key reason to choose purchasing life insurance in the United States is that it is considered more reasonably priced as compared to similar products available in other countries. This is one more reason why a life insurance policy for foreigners is a win-win. In addition, US life insurance policies often make available value added services that a foreigner may not find in similar products offered in their home country. Silver Rock Partners assists non-resident foreign nationals in making more informed and more tax efficient estate planning decisions. For foreigners buying real estate in Los Angeles or foreign nationals purchasing property in Miami, Silver Rock Partners is a trusted and respected name in innovative high-net-worth estate planning.