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Planning for Foreign Nationals. Andrea Valdez-Brandon, J.D., CLU, ChFC Consultant, Advanced Marketing.

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Planning for foreign nationals
Planning for Foreign Nationals

  • Andrea Valdez-Brandon, J.D., CLU, ChFC

  • Consultant, Advanced Marketing


All solicitation and communication (including marketing materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

This material was not intended or written to be used, and cannot be used, to avoid penalties imposed under the Internal Revenue Code. This material was written to support the promotion or marketing of the products, services, and/or concepts addressed in this material. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely solely on their own independent advisors regarding their particular situation and the concepts presented here.


Importance of estate planning for foreign individuals
Importance of Estate Planning materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).for Foreign Individuals

  • Expanding global economy

  • Need for planning

  • Impact of U.S. transfer taxes


Breadth of the market
Breadth of the Market materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

Source: U.S. Census Bureau, 2005-2007 American Community Survey

The foreign-born population includes anyone who was not a U.S. citizen or a U.S. national at birth.This includes respondents who indicated they were a U.S. citizen by naturalization or not a U.S. citizen. (U.S. Census Bureau, American Community Survey 2007 Subject Definitions).


Introduction to the market
Introduction to the Market materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • Non-U.S. citizens fall into 2 categories:

    • Resident Aliens

    • Non-Resident Aliens


Resident aliens
Resident Aliens materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • Non-U.S. citizen with permanent U.S. home

  • Worldwide assets subject to U.S. estate and gift tax

  • Deprived of certain tax advantages available to U.S. citizens


Non resident aliens
Non-Resident Aliens materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • Only U.S. assets subject to U.S. estate and gift tax

  • Non-U.S. citizen with permanent home in another country


Estate tax comparison ra vs nra
Estate Tax Comparison: RA vs. NRA materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

* Intangible property includes stock in a U.S. corporation and interest in a U.S. partnership


Ideal candidates
Ideal Candidates materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • Non-Resident Aliens with significant U.S.-based assets

  • Married couples consisting of at least one non-U.S. citizen


Sample fact finding questions
Sample Fact Finding Questions materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • Sorting Out Citizenship and Residency Status

Are you and your spouse U.S. citizens?


Sample fact finding questions1
Sample Fact Finding Questions materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • Sorting Out Citizenship and Residency Status

Do you own a home in the U.S.?

Do you own a home in another country?


Sample fact finding questions2
Sample Fact Finding Questions materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • Sorting Out Citizenship and Residency Status

How much time do you spend in this country versus any other country?


Sample fact finding questions3
Sample Fact Finding Questions materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • Sorting Out Citizenship and Residency Status

Where are your friends and family located?


Sample fact finding questions4
Sample Fact Finding Questions materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • Sorting Out Citizenship and Residency Status

What is your immigration status?

Green card?


Indonesian national with significant u s assets
Indonesian National with materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).Significant U.S. Assets

  • WeningWulandari

  • Indonesian national

    • Widowed

    • $10,000,000 in U.S. based real estate and investments

  • What is Wening’s exposure to U.S. estate and gift tax?


Why planning is important nras
Why Planning Is Important: materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).NRAs

  • Wening Wulandari, Indonesian national, Non-Resident Alien

  • $10 million in U.S. property and investments

    • No advanced planning

    • Death in either 2011 or 2012

      Tentative Federal Estate Tax ($3,480,800)

      Less: Credit $13,000

      Net Estate Taxes ($3,467,800)

      Net U.S. Assets $6,532,200

  • Estate Shrinkage = 35%


Gift tax comparison ra vs nra
Gift Tax Comparison: RA vs. NRA materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

* Tangible property includes cash, jewelry, paintings, automobiles


Sample fact finding questions5
Sample Fact Finding Questions materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

What is the value of your U.S.-based assets?


Sample fact finding questions6
Sample Fact Finding Questions materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

Did you know that the amount your children inherit may be reduced significantly due to U.S. federal estate tax?


Sample fact finding questions7
Sample Fact Finding Questions materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

Will your children have enough cash to pay the estate tax bill upon your death?


Nra with significant u s assets
NRA with Significant U.S. Assets materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

Corporation

Wening’s Estate

Real estate & investments

Non-Resident AlienWeningWulandari

Daughter

Son

Daughter


Nra with significant u s assets1
NRA with Significant U.S. Assets materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

Alternate Solution: Life Insurance

Wening’s Estate

Lifetime Guaranteed Level Death Benefit*

Death benefit = $3.5 million

Annual Premium = $54,430

Real estate & investments

Non-Resident AlienWeningWulandari

*Female, 62, preferred nonsmoker


Nonresident aliens u s gift and estate situs rules
Nonresident Aliens: materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).U. S. Gift and Estate Situs Rules

* A gift of a life insurance policy on oneself may be subject to the IRC §2035 look back rule, and therefore may be subject to estate taxes if included within the decedent’s estate.


Non citizen married to citizen
Non-citizen Married to Citizen materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • Mark and Anna, mid-60s

  • Mark is a U.S. citizen

  • Anna is a Swedish citizen and Resident Alien


Non citizen married to citizen1
Non-citizen Married to Citizen materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

Mark

U.S. Citizen

Anna

Swedish citizen

Resident Alien

Unlimited Marital Deduction

No Deduction


Sample fact finding questions8
Sample Fact Finding Questions materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • Are you and your spouse U.S. citizens?


Sample fact finding questions9
Sample Fact Finding Questions materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • What is the value of your worldwide estate?


Non citizen married to citizen2
Non-citizen Married to Citizen materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

Mark

U.S. Citizen

Anna

Swedish Citizen

Resident Alien

Unlimited Marital Deduction


Non citizen married to citizen3
Non-citizen Married to Citizen materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

Alternate Solution: Life Insurance

Mark

U.S. Citizen

Anna

Swedish Citizen

Resident Alien

Legacy Trust withLife Insurance


Why transamerica
Why Transamerica? materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • Dedicated international underwriting team

  • Access to experts & marketing materials

  • Expand market

    • No product limitations

    • Low or no minimum face amount*

  • Close more business

    • Best underwriting risk class generally available

  • * $25,000 minimum face amount for TransTermSM product.


Tapping into the foreign nationals market
Tapping Into the Foreign Nationals Market materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • Align with immigration and/or international tax attorneys

  • Do you have contacts in a U.S. immigrant community?

  • Partner with international banking and investment institutions

  • Are you fluent in more than one language?


Tapping into the foreign nationals market1
Tapping Into the Foreign Nationals Market materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • Develop a champion client

  • Do you live in a location with high foreign national investment?

  • Do you live in a resort/vacation destination?


Seizing the opportunity
Seizing the Opportunity materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871).

  • Review your book of business

  • Reach out to contacts that match the client profile

  • Strengthen and build your referral network


Transamerica Life Insurance Company (“Transamerica”), and its representatives do not give tax or legal advice. The material in this presentation is provided for informational purposes only and should not be construed as tax or legal advice. Clients and other interested parties must be urged to consult with and rely solely upon their own independent advisors regarding their particular situation and the concepts presented here.

Discussions of the various planning strategies and issues are based on our understanding of the applicable federal tax laws in effect at the time of presentation. However, tax laws are subject to interpretation and change, and there is no guarantee that the relevant tax authorities will accept Transamerica’s interpretations. Additionally, this material does not consider the impact of applicable state or foreign laws and regulations upon clients and prospects. Clients should consult with and rely on their own legal and/or tax advisor to determine the consequences, if any, of owning or receiving proceeds from a Transamerica policy.

Although care is taken in preparing this material and presenting it accurately, Transamerica disclaims any express or implied warranty as to the accuracy of any material contained herein and any liability with respect to it. This information is current as of August 2011.

OLA 2119 0811


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