iAteAllThePeanutButter

I am trying to sort out my finances and in doing so, have realised that I don't know what to do about my US bank accounts in the event of my death.

I am a permanent resident in the US. I have no spouse and no kids. All my family live outside the US, none are citizens or have ever lived in the US. I've called a couple of banks and asked about non-US beneficiaries and they've told me beneficiaries need to have a SSN.

What are my options here? Do I need to take to an estate planning attorney? Anyone else in a similar position?

lansbury

Our attorney drew up our wills with UK beneficiaries. In fact the will even appoints an executor in the UK to deal with UK matters, and a US executor to deal with things here.

Our US bank very recently asked me to add beneficiaries to my deferred annuity. My wife is the main beneficiary but they asked for secondary beneficiaries in the event we were both involved in an accident etc. Those are our three sons, one a US citizen living here, and two UK citizens living in the UK. So it can be done.

mrken30

We have done a similar thing , how it works in practice , I have no idea. I have learnt that a lot of professional people do not necessarily give good advice. We have enough insurance here to cover the US estate taxes on death.

ian-mstm

This is absolute rubbish! My will leaves both money and assets to several friends and relatives - all living outside the US - and it was never an issue... including money from my US bank account. Next time, ask to speak to a manager! If you don't get satisfaction, move your money elsewhere.

Ian

mrken30

A will is different to beneficiaries. A lot of systems require a SSN , some systems have work arounds that employees are not aware of. Same as most employee health insurance plans require an SSN for dependents. Some employees assume that because the field is there, that it has to be filled in. It may just be some banks have more stringent money laundering rules that require an SSN.
A will is just a signed piece of paper hence not the same issues.

ian-mstm

What an absolutely stupid comment!


You really have no idea what you're talking about. I suggest you post less and read more... you might actually learn something.

Ian

nun

Designating beneficiaries on something like an IRA or pension directly rather than doing it through a will avoids those assets becoming part of the estate and having to go through probate. The beneficiary gets the money straight away and will also be responsible for any taxes. This is an important distinction, so the beneficiary of an IRA is very different from the beneficiary of a will.

There is no requirement for any beneficiary to have a SSN......however the forms/software will have a SSN field that might make filing the form impossible without one. FYI I have many beneficiaries without SSNs and have had no trouble at all.

ian-mstm

I agree... and if that's what the guy had written, I'd likely have agreed with it. But that's not what he wrote!


While it may be convenient, there is no requirement to complete forms electronically - ergo, a SSN is never required.

Ian

mrken30

Cods wallop, you never agree with anything I say, hater! Hopefully you have learnt something today.

ian-mstm

That's because almost nothing you say is correct. FWIW, I'm not the only one who believes that to be true. Perhaps you're simply unable to express yourself, or unable to say what you're actually thinking. I can only go by what you write... not what you're thinking. If there's some disconnect between the two - then you need to learn to better express yourself.


Indeed I have... but it has nothing to do with you!

Ian

Sheepdip

Steve_

You should attach instructions to your Will, that's what I did with mine. For example, an explanation of IRS Form 706. The fact that the US and UK have an estate tax treaty.

As far as SSNs go for the beneficiaries, just get them to file blank 1040NR-EZs together with a W-7, write "Protective" across the top of the 1040NR-EZ. They put their name and address on the return, choose "single nonresident alien", sign it and complete schedule OI on the back. Choose option b on the W-7.

The IRS will issue an ITIN which can be used in lieu of the SSN.

They apparently deactivate them now after 5 years but I can't see what difference that would make to a bank paying out to beneficiaries.

In any event, you can get around that by having them file blank 1040NR-EZs once every five years.

mrken30

I got a notice from my bank today and it states that account owners are required to be US persons for tax purposes and have a social security number. This is in order to comply with the Patriot Act. This may be why designated account beneficiaries are required to be US residents with SSNs

CarefulTaxpayer

One potential way to deal with this is by setting up a revocable trust. I know that "trust" is potentially a word laden with implications, but a revocable trust is a private and efficient way to deal with your estate IMHO. This is NOT a shady/tax evasion/illegal/offshore thing: we're talking a US trust with full reporting to the IRS. Many people do it, largely to avoid lengthy and costly probate, and to achieve privacy (see below).

The trust has you (or you and your spouse, for example, if you set it up with him/her) as trustees. The trust is "transparent" to US taxes....it has your social security number(s) and you report its income, gains, losses, etc on your personal tax returns. You put your meaningful assets (house, vehicles if possible, savings accounts, brokerage accounts, bank accounts) into the trust. Quite easy to do, albeit you'll become friends with your local notary. You write checks, sign documents, do everything that you do today, but will often sign documents, for example, as "your name, Trustee". You pay taxes no differently than if your money was in your account, versus your trust's. There are some "estate planning" possibilities to legally reduce or defer estate taxes, but those are complex and definitely estate attorney matters.

When you die, a successor trustee, that you name, becomes the trustee, and the trust becomes irrevocable. The successor trustee can be an attorney, or a (very) trusted friend. The successor trustee follows your instructions, as written in the trust, on how to disburse your estate.

You'll likely be advised to have a "pourover" will, that moves anything that you couldn't move into the trust, or forgot to move into the trust, into the trust via probate. In many states, a will is public, but a trust is not. That's why, when a famous person dies, their will often says something along the lines of "anything not in my trust goes to my trust", and that's all that the nosy public sees.

Now to the point: for an IRA/401(k), you'd generally name specific people as your beneficiaries. This bypasses probate, your will, even your trust. It's quick and efficient. If your IRA/401(k)/whatever trustee (because these, too, are trusts, managed by your brokerage firm or employer) wants an SS#, then name your trust as the beneficiary. You can also have your trust as the secondary beneficiary, in the event that your primary, named, beneficiaries can't collect. This isn't as clean and simple as giving the money directly to a beneficiary, but it's a possible workaround.

You CAN set up your trust yourself, but, for most people, it's likely best to consult an attorney. Here's the really good news: you can amend your trust at any time, and it's pretty easy, to change how you want to disburse your estate. You can also dissolve the trust whenever you want, e.g. you get married, or divorced. That's why it's called a "revocable" trust.

Hope this helps. I'm not an expert, not even close, so ALWAYS verify your specific situation with a qualified attorney or expert.

Owen778

I suspect both the need for a revocable trust and the ability to use one as you describe varies by state, though I could be wrong.