Thai wife, US brokerage

[NoDisplayName]

I was going through my accounts, checking that I had changed my beneficiary information, called Fidelity and asked what was needed when the thing happens.  Death certificate, IRS transfer certificate..... now need to research forms 5173 and 706-NA.

 

Asked about how to get the money transferred, could we set up an account for the Thai wife to put funds into, the rep said of course.  Can we do it now?  Yes, we can, of course that would involve W8-BEN form and US tax filing.

 

Can begin transferring funds as gifts, and stay under the TRD spousal gift limitation.  There will be funds in the account available, as it may take 6-8 months to get the IRS release certificate.

 

Fidelity rep will email forms to print, fill out and sign, scan and email back.  Process should take about a week.

[Foxx]

I'm curious.  No need for a will or probate?

[NoDisplayName]

4 hours ago, Foxx said:

I'm curious.  No need for a will or probate?

 

Apparently not, if I understand correctly.  You set up the beneficiaries on each account, setting wife to 100%, giving the brokerage instructions for disposal of assets.

 

We do have our downloaded DIY will, signed by a couple witnesses.  Unfortunately local government office refused to register a foreigner will.

Do retirement accounts pass through probate?

NO, as long as the beneficiaries are properly designated. Keep in mind that if the will stipulates anything about such accounts, the named beneficiaries take precedence over the will and the assets will be distributed to the named beneficiaries on the accounts.

https://www.fidelity.com/life-events/estate-planning/asset-strategies/retirement-accounts

 

 

 

[mudcat]

This can be an issue if the 'brokerage' account is actually a retirement account (401K, IRA 403B), and maybe even Roth IRA.

 

https://www.irs.gov/retirement-plans/plan-distributions-to-foreign-persons-require-withholding

 

 

 

 

[BKKKevin]

Does your Thai wife have a US FEIN Tax number?... 

 

I'd like to list mt Thai partner as my payable on death beneficiary but it seems to require that they have a Social Security Number (FEIN)...

 

How do others handle this?...

[FarangRimPing]

15 minutes ago, BKKKevin said:

Does your Thai wife have a US FEIN Tax number?... 

 

I'd like to list mt Thai partner as my payable on death beneficiary but it seems to require that they have a Social Security Number (FEIN)...

 

How do others handle this?...

Years ago, I was able to list my wife as beneficiary on my Fidelity accounts without specifying a Social Security number or an ITIN. Maybe that's still the case and it's easy to do.

 

[FarangRimPing]

On 11/15/2024 at 10:07 PM, NoDisplayName said:

I was going through my accounts, checking that I had changed my beneficiary information, called Fidelity and asked what was needed when the thing happens.  Death certificate, IRS transfer certificate..... now need to research forms 5173 and 706-NA.

 

Asked about how to get the money transferred, could we set up an account for the Thai wife to put funds into, the rep said of course.  Can we do it now?  Yes, we can, of course that would involve W8-BEN form and US tax filing.

 

Can begin transferring funds as gifts, and stay under the TRD spousal gift limitation.  There will be funds in the account available, as it may take 6-8 months to get the IRS release certificate.

 

Fidelity rep will email forms to print, fill out and sign, scan and email back.  Process should take about a week.

 

Are you using a US address on your Fidelity account? (Perhaps there may be restrictions if not; I don't know.)

 

I would like to do the same as you're doing but I have listed a US address and am afraid to mess things up with my accounts.

[FarangRimPing]

On 11/15/2024 at 10:07 PM, NoDisplayName said:

I was going through my accounts, checking that I had changed my beneficiary information, called Fidelity and asked what was needed when the thing happens.  Death certificate, IRS transfer certificate..... now need to research forms 5173 and 706-NA.

 

Asked about how to get the money transferred, could we set up an account for the Thai wife to put funds into, the rep said of course.  Can we do it now?  Yes, we can, of course that would involve W8-BEN form and US tax filing.

 

Can begin transferring funds as gifts, and stay under the TRD spousal gift limitation.  There will be funds in the account available, as it may take 6-8 months to get the IRS release certificate.

 

Fidelity rep will email forms to print, fill out and sign, scan and email back.  Process should take about a week.

Just a quick look implies that 5173 and 706-A do not apply, assuming you are a US citizen.

 

https://www.irs.gov/businesses/small-businesses-self-employed/transfer-certificate-filing-requirements-for-the-estates-of-nonresidents-not-citizens-of-the-united-states

 

Applicability
The following transfer certificate filing requirements apply to the estate of a decedent who was neither a citizen nor a resident of the United States and who died after December 31, 1976. 

 

[StraightTalk]

On 11/15/2024 at 10:07 PM, NoDisplayName said:

I was going through my accounts, checking that I had changed my beneficiary information, called Fidelity and asked what was needed when the thing happens.  Death certificate, IRS transfer certificate..... now need to research forms 5173 and 706-NA.

 

Asked about how to get the money transferred, could we set up an account for the Thai wife to put funds into, the rep said of course.  Can we do it now?  Yes, we can, of course that would involve W8-BEN form and US tax filing.

 

Can begin transferring funds as gifts, and stay under the TRD spousal gift limitation.  There will be funds in the account available, as it may take 6-8 months to get the IRS release certificate.

 

Fidelity rep will email forms to print, fill out and sign, scan and email back.  Process should take about a week.

Consider this: Is your spouse or partner equipped to effectively communicate with the relevant authorities in the event of your passing? Can they read and, more importantly, comprehend business or governmental-style English, which is vastly different from casual communication, such as using Line accounts with emoticons? Are they familiar with your essential documents and proficient in using tools like a computer, scanner, or printer?

To the best of my knowledge, transferring funds as gifts involves adhering to specific protocols and may not be as straightforward as one might hope.

Even if a representative from your financial institution assures you that "everything is okay," trust me, there’s often someone else who will come along requiring additional documents or raising new issues.

If you haven’t already, ensure you have a comprehensive Will for your overseas assets. Review it regularly (I do it annually) and provide clear, detailed instructions for your executor. Importantly, choose an executor who is a skilled communicator in English and is capable of navigating complex processes.

Just a word of caution and preparation - better safe than sorry... Though, truth be told, you wouldn’t know anyway once you're gone. It’s your loved ones who will bear the burden freeing your assets, and they’ll need all the help and clarity they can get.

[NoDisplayName]

4 hours ago, mudcat said:

This can be an issue if the 'brokerage' account is actually a retirement account (401K, IRA 403B), and maybe even Roth IRA.

 

https://www.irs.gov/retirement-plans/plan-distributions-to-foreign-persons-require-withholding

 

 

I'm in the early stages of researching and getting this all set up.

 

I'm aware that my Roth will likely be problematic, but fortunately (!) it's only a small portion of my portfolio.  I spent the majority of my non-military work life in occupations that paid a large part of the paycheck as non-taxable per diems and allowances.  Add to that I spent bigly amounts of time vacationing, such that I have enough credits to receive social security benefits, but not much more, thus many years unable to make contributions.

 

 

 

 

[NoDisplayName]

4 hours ago, BKKKevin said:

Does your Thai wife have a US FEIN Tax number?... 

 

I'd like to list mt Thai partner as my payable on death beneficiary but it seems to require that they have a Social Security Number (FEIN)...

 

How do others handle this?...

 

Not required.

Fidelity allowed me to list her as beneficiary.

When speaking with the rep, I confirmed she knew the wife was non-resident, non-citizen, overseas, with no SSN/TIN.

 

I'm also looking into getting her an ITIN in order to file "married filing jointly" to double the standard deduction and LTCG 0% brackets.

[NoDisplayName]

3 hours ago, FarangRimPing said:

 

Are you using a US address on your Fidelity account? (Perhaps there may be restrictions if not; I don't know.)

 

I would like to do the same as you're doing but I have listed a US address and am afraid to mess things up with my accounts.

 

Yes, using my parents' address.

 

Several years ago, Fidelity went through a phase of attempting to identify non-resident accounts.  They caught me.  Only change is that now my accounts are not allowed to purchase or add to holdings of mutual funds (registered for sale in US only).  I can have the restriction lifted if I physically show up in a US branch and provide utility bills to re-establish residence.

[NoDisplayName]

3 hours ago, FarangRimPing said:

Just a quick look implies that 5173 and 706-A do not apply, assuming you are a US citizen.

 

https://www.irs.gov/businesses/small-businesses-self-employed/transfer-certificate-filing-requirements-for-the-estates-of-nonresidents-not-citizens-of-the-united-states

 

Applicability
The following transfer certificate filing requirements apply to the estate of a decedent who was neither a citizen nor a resident of the United States and who died after December 31, 1976. 

 

 

I am a citizen.

As decedent, i will have been a citizen.

 

This particular info page is specifically for "estates of nonresidents not citizens" and defines how the law applies in those cases only.

 

Fidelity requires the transfer certificate.

 

 

 

[NoDisplayName]

2 hours ago, StraightTalk said:

Consider this: Is your spouse or partner equipped to effectively communicate with the relevant authorities in the event of your passing? Can they read and, more importantly, comprehend business or governmental-style English, which is vastly different from casual communication, such as using Line accounts with emoticons? Are they familiar with your essential documents and proficient in using tools like a computer, scanner, or printer?

To the best of my knowledge, transferring funds as gifts involves adhering to specific protocols and may not be as straightforward as one might hope.

Even if a representative from your financial institution assures you that "everything is okay," trust me, there’s often someone else who will come along requiring additional documents or raising new issues.

If you haven’t already, ensure you have a comprehensive Will for your overseas assets. Review it regularly (I do it annually) and provide clear, detailed instructions for your executor. Importantly, choose an executor who is a skilled communicator in English and is capable of navigating complex processes.

Just a word of caution and preparation - better safe than sorry... Though, truth be told, you wouldn’t know anyway once you're gone. It’s your loved ones who will bear the burden freeing your assets, and they’ll need all the help and clarity they can get.

 

We have a downloaded DIY will with two witnesses.  Local amphur will not register it.  It's a simple will.  I own no physical assets.  The house and car in Thailand are in the wife's name.  I have bank and brokerage accounts in Thailand, brokerage accounts in US.

 

I've added an addendum page in the will listing all account numbers along with current values as of date of signing.  Accessing the Thailand accounts shouldn't be too much trouble. 

 

I'm putting together a notebook as I go along with specific instructions to follow for each step of the process; obtaining the death certificate from the embassy, applying for the IRS certificate, contacting Fidelity to arrange for transfer.  I might contact a BKK law firm to see if they handle this sort of event.

 

Step one:  marry foreigner

Step two:  ???

Step three:  profit!

 

We'll probably go ahead and set up a Fidelity account for her if that can truly be done without an ITIN.  Then I can begin researching US and Thai laws on gift transfers.

[NoDisplayName]

33 minutes ago, NoDisplayName said:

I'm also looking into getting her an ITIN in order to file "married filing jointly" to double the standard deduction and LTCG 0% brackets.

 

Selling/buying funds to take LTCG's.  Not as living expenses or purchases, but to reset cost basis of funds owned.  Take the gain now tax-free and reduce/avoid future taxes.  Do it NOW in case Thailand goes with worldwide income, in which case US 0% brackets will not be recognized by TRD and will be fully assessable income taxed at up to 35%!

 

Maximum tax-free gains in the US under WW income tax would cost me $10K annually filing single, or $20K annually if filing jointly.