And You Thought Your Family Was Complicated…
Could Royal Baby Archie be the herald of a new dawn for Americans overseas?
I’ve been following his story with rapt interest…
As Harry and I get ever closer to starting a family of our own, the consequences of an American born overseas who may not spend much time Stateside is on my mind…
Like Archie, my future child will be born to a U.S. citizen overseas, and he or she will be blessed with the same complicated tax conundrum.
The United States is one of only two countries in the world (Eritrea is the other) that taxes based on citizenship rather than residency, which means that, no matter where an American lives, he owes paperwork to Uncle Sam every year.
Though I only spent a few years Stateside, I have to declare the fact that I owe zero taxes each year. If I don’t, I’m liable to be audited and the consequences could be great—even though I owe nothing.
Baby Archie is also under the IRS’ thumb in this manner. I have no doubt that the royal family put these puzzle pieces in place long before Meghan’s due day. Likely, none of Archie’s income will go to him directly as an individual, and trusts will receive all his gifts and assets. There’s little chance that he’ll ever actually owe any taxes. But, just like me and my future child, Archie Harrison Mountbatten-Windsor will still have to make his declarations each year.
For royalty, this is a mere matter of paper shuffling and making sure the queen hires a knowledgeable tax expert in both countries to steer him through.
For the average Joe, things aren’t quite so easy… and the costs are certainly more consequential. But we commoners might still benefit from this celebrity birth…
Whispers abound that the attention given to Archie’s situation in the media may be enough to prompt a change in this unnecessarily onerous legislation. With trade wars, impeachment talks, and all the other hullaballoo in Washington, I somehow doubt that this issue will take center stage… but we can hope.
My brother Jackson, born in Ireland to American parents, is also in this strange tax position. He’ll also have to consider that, because he was born outside the United States, his children won’t automatically be U.S. citizens if they, likewise, aren’t born in the United States… not unless he lives in the States at some point for at least five years.
Of course, the idea of leveraging diversification opportunities is inherent in my family dynamic. Lief’s first suggestion at the thought of grandkids was for me to go to Colombia to have them.
Colombia is one of the few remaining jus soli countries that would make much sense for me. The baby would automatically acquire both U.S. and Colombian citizenship. Plus, Medellín has a comfortable climate for a swollen, overloaded pregnant body, and the health care is tops.
Failing that, how else can I give my future child a leg-up in life? If born here in France, Baby Kalashian won’t be eligible for French citizenship upon birth, but would be after several years living here. (I’ll have to ask Lief if the benefit of an EU passport outweighs the potential taxation disadvantages of being a French citizen.)
Otherwise, Junior will have the advantages that come with being schooled outside the States… will be bilingual as soon as he or she can talk… and will be well traveled from the get-go. Hopefully, even if I can’t provide an extra citizenship, these other things will help put my child ahead of the pack.
When thinking about your life overseas, it’s worth considering this legacy aspect—and how your plans will affect not just you but your future generations…
The best way to get the inside track—and understand the best places to plant a residency and/or citizenship in the world today… and what it means for your future—is to meet with our experts at this year’s Offshore Wealth Summit, Oct. 9–11, in Panama City.
I gave you early notice about this event last week… and, this week, we’re spilling the beans to the full readership… meaning our limited number of complimentary VIP Packages will sell out soon.
If you’d like to discover how you can best protect yourself, your wealth, your future—and that of your loved ones—then I recommend you be in the room with the Live and Invest Overseas trusted team of offshore experts who’ll cover the areas of residency and citizenship… offshore banking… asset protection… opportunities for diversifying and growing your wealth… and lots more…