Author Topic: Has anyone every inherited money in another country?  (Read 7020 times)

AMustachianMurse

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Has anyone every inherited money in another country?
« on: May 20, 2014, 08:45:57 AM »
Basically my mom could not be worse at managing her money, and that's not an exaggeration.  It's so bad that my brother and I are exploring how to put her inheritance into a trust, lock her out, and give her fixed distributions from it. 

Anyway on to my question, through fantastic planning by her father, she stands to inherit somewhere in between $250k - $750k USD worth in Philippine Pesos.  I don't think she wants to live in the PI for the rest of her life, and I think I need her close to me (In San Diego) so that I can keep an eye on her money and make sure she doesn't get into any trouble (she is very susceptible to pyramid and other get rich quick schemes). 

My tentative plan is to take her money and buy her a multi-unit property in san diego.  Have her live in one unit as a figurehead "landlord" and rent out the other unit.   I will of course be managing the property, either directly or via property management. 

Has any one ever moved money from one country to the u.s.?  IIRC the U.S. has an arrangement with the Philippines where someone only has to prove they paid taxes in one country or another (manny pacquiao had to deal with this issue recently). 

I've heard some people say that you can form a corporation in one country and use the money to "invest" in the u.s.on whatever, so for example, I could form an LLC in the Philippines, funnel her inheritence into that.  Then invest the capital into the afore-mentioned multi-unit dwelling. 

I seriously have NO idea how to do something like this, so if any one knows any body with any knowledge in this direction let me know. 

Thanks for your time, I appreciate the guidance.

Wile E. Coyote

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Re: Has anyone every inherited money in another country?
« Reply #1 on: May 20, 2014, 09:08:18 AM »
I am certainly not an export on foreign trusts or moving cash across borders, but I may be able to provide se input from a tax perspective.  It would be helpful to know if your mom and her father are US citizens, green card holders, or spend a substantial amount of time in the us.  As you probably know, inheritances are not taxable to the beneficiary, but there could be estate tax implications for the fathers estate if it is subject to US estate tax. In addition,  there are reporting requirements for gifts and inheritances of $100,000 or more from foreign persons, but I imagine that is only applicable if your mom is a "US person."

To my knowledge, the US does not have restrictions on moving cash into the US, but I would look into the rules in the Philippines, as some countries have currency restrictions.

I'm not sure what you are trying to accomplish with the LLC.  If you are looking to form a "regarded foreign entity, that entity will likely be taxed in the US on income from the rental activity either on a gross basis (withholding on US source income) or on a net basis if the rental activity constitutes a US trade or business. Gain on a subsequent sale could also be subject to the FIRPTA rules and taxes as effectively connected income. If there is a treaty with the Philippines, that could change slightly but it is hard to tell what your goal would be with setting up a foreign entity.

I am sure that was a a clear as mud, but more info might help.

dragoncar

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Re: Has anyone every inherited money in another country?
« Reply #2 on: May 20, 2014, 09:34:50 AM »
My second cousin is actually a Nigerian prince who left me over 5,00,0000 MILLION USD.  Unfortunately I don't have advice yet because I haven't gotten the wire despite having sent my bank info weeks ago.

Adventine

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Re: Has anyone every inherited money in another country?
« Reply #3 on: May 20, 2014, 09:39:36 AM »
Basically my mom could not be worse at managing her money, and that's not an exaggeration.  It's so bad that my brother and I are exploring how to put her inheritance into a trust, lock her out, and give her fixed distributions from it. 

The first question that comes to mind is, even if you do find a way to take effective control of the inheritance, is your mom going to give up that control?

Is that USD 250-750k (at the current exchange rate, PHP 10.9 million to 32.8 million) in cash, investments, real estate, etc.? In any case, the inheritance will definitely be subject to Philippine estate taxes. From the Bureau of Internal Revenue's website: http://www.bir.gov.ph/taxinfo/tax_estate.htm, seems like your mom's inheritance falls under the highest tax bracket, even at the lower end of the range you gave. The estate tax will be PHP 1.215 million + 20% of the excess over PHP 10 million.   

We definitely need more information about your mom and your grandfather.

former player

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Re: Has anyone every inherited money in another country?
« Reply #4 on: May 20, 2014, 09:47:07 AM »
If your mom is legally of sound mind, she can do what she wants.  Her not being mustachian is not yet a reason for you and your brother to decide where she lives (does she even want to live in San Diego?) or deprive her of her money.  You are not entitled to safeguard it either for her benefit or so you can have an inheritance.

If you want to offer her advice, that is one thing.  If she doesn't want to take it, that is up to her.

My understanding of property prices in San Diego is that the lower sum isn't going to buy two good properties anyway, and why should your mum live in a not-good property?

Sorry to be so blunt.

milla

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Re: Has anyone every inherited money in another country?
« Reply #5 on: May 20, 2014, 03:55:49 PM »
Yes, I have inherited money in another country. But you haven't, so why are you making plans for it?

Honestly, you're way out of line with your mom. Unless she has personally said she wants you to set this up for her you need to back off and be a resource to her and if she wants to blow all her money on Amway so be it.

AMustachianMurse

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Re: Has anyone every inherited money in another country?
« Reply #6 on: May 21, 2014, 05:54:17 PM »
If your mom is legally of sound mind, she can do what she wants.  Her not being mustachian is not yet a reason for you and your brother to decide where she lives (does she even want to live in San Diego?) or deprive her of her money.  You are not entitled to safeguard it either for her benefit or so you can have an inheritance.

If you want to offer her advice, that is one thing.  If she doesn't want to take it, that is up to her.

My understanding of property prices in San Diego is that the lower sum isn't going to buy two good properties anyway, and why should your mum live in a not-good property?

Sorry to be so blunt.

No worries, this community is all about bluntness.  I should probably take a step back because as I reread my post, I can see how my inflection has lead to some of the responses below.  So, where do I start.  I suppose an important backstory note is that my mom has not held a job in over 30 years.  She was in a car accident before I was a baby and my relatives say she has never really been the same, Maybe PTSD?  She is still sound of mind, but it's just....something isn't quite right.  She is very difficult to communicate with because she is very forgetful, and absent-minded.  I would liken it to a mixture between someone with ADD, and someone with early-onsent alzheimers.  I love her to pieces but she ended up in the philippines because of alienating herself from her brothers and sisters after our house got forclosed and she didn't have a place to stay.  Eventually everybody gave up and refused to let her crash at their place, and the only option was to have her move back to the family home in Manila where she could help take care of my grandma, who DOES have alzheimers and is declining in health. 

I am not seeking advice because I am expecting any inheritence at all.  I am trying to find a way to make the money that she inherits somehow provide her basic necessities (roof over head, food on the table, and medical expenses until she qualifies for medicare).  It's not going to be much money as far as "retirement" is considered, but she is incapable of bringing in income on her own.  It is up to me to find a way.

Yes, I have inherited money in another country. But you haven't, so why are you making plans for it?

Honestly, you're way out of line with your mom. Unless she has personally said she wants you to set this up for her you need to back off and be a resource to her and if she wants to blow all her money on Amway so be it.

I totally agree with what you are saying about being a resource.  You can lead a horse to water but cannot make them drink, I get that, and I have struggled with that my entire life with her.  Now I may be wrong, and often I am wrong as evidenced by my post history on this site....but if someone's mother was an alcoholic, who had nearly drank herself into homelessness, but was then given the keys to a liquor store in her inheritance,  Does her family have a responsibility to at least TRY to keep the doors locked up?  Maybe it is a cultural thing, but for Filipinos, we can't turn our backs on family members and leave them to destroy themselves with their own devices.  We try and try to find a way to help, sometimes destroying ourselves in the process. 

I am certainly not an export on foreign trusts or moving cash across borders, but I may be able to provide se input from a tax perspective.  It would be helpful to know if your mom and her father are US citizens, green card holders, or spend a substantial amount of time in the us.  As you probably know, inheritances are not taxable to the beneficiary, but there could be estate tax implications for the fathers estate if it is subject to US estate tax. In addition,  there are reporting requirements for gifts and inheritances of $100,000 or more from foreign persons, but I imagine that is only applicable if your mom is a "US person."

To my knowledge, the US does not have restrictions on moving cash into the US, but I would look into the rules in the Philippines, as some countries have currency restrictions.

I'm not sure what you are trying to accomplish with the LLC.  If you are looking to form a "regarded foreign entity, that entity will likely be taxed in the US on income from the rental activity either on a gross basis (withholding on US source income) or on a net basis if the rental activity constitutes a US trade or business. Gain on a subsequent sale could also be subject to the FIRPTA rules and taxes as effectively connected income. If there is a treaty with the Philippines, that could change slightly but it is hard to tell what your goal would be with setting up a foreign entity.

I am sure that was a a clear as mud, but more info might help.

Thank you for weighing in, a veteran posters insight is always greatly appreciated.  Basically what I am trying to accomplish is simply moving a massive sum of money from one country to another, in the most tax-friendly (but LEGAL) way.  You can't just wire $500k from the philippines to the usa can you?  I think there are money laundering laws and stuff in place to flag this type of stuff.  I'm just trying to find a legit way so that my mom can take this money, which will be the only positive cash-flow she will get on her own for the rest of her life, and funnel it into...a roof over her head, and food on her table.  So that I don't have to worry about my FIRE plans going down the tube because of supporting her financially for the next 30+ years. 


Thank you again every one for your kind, and even for the...harsher words.  Every one except the nigerian prince comment, that was a little unnecessary, but whatever.  I apologize if my tone came off as a snooty kid trying to screw their parent out of money that is rightfully hers.  But as a health professional I hope that my anecdote about an alcoholic shed some light on the situation, because I think that is an apt metaphor for the situation at hand.  It is not a money problem, it is a health problem. 

libertarian4321

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Re: Has anyone every inherited money in another country?
« Reply #7 on: May 22, 2014, 09:34:25 AM »
My second cousin is actually a Nigerian prince who left me over 5,00,0000 MILLION USD.  Unfortunately I don't have advice yet because I haven't gotten the wire despite having sent my bank info weeks ago.

Hey, we must be related.

I am actually related to hundreds of African Prince's and Ministers, all of whom found me by email.  Which is really weird, because I'm pasty white.  Still, one of these days, I'm going to cash in and live large!

Villanelle

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Re: Has anyone every inherited money in another country?
« Reply #8 on: May 22, 2014, 10:20:36 AM »
If you want that money to last her as long as possible, I'm not sure that trying to get her to move to San Diego is your best bet, given what an expensive city it is.  Is there any other family (your brother) that she could live near instead? 

In your shoes, assuming I'd discussed it with mom and she was actually interested in moving to the States, I'd consult an accountant for starters. S/he should be able to tell you the best way to get money from one country to another, in the most tax-efficient way possible. 

Also, it's unclear from your OP, but if her father is still alive, it might make sense to look into whether there are ways he can give her some of that money now, or set up a trust of some sort (no idea about laws in the Philippines) that would help her avoid estate taxes there. 


AMustachianMurse

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Re: Has anyone every inherited money in another country?
« Reply #9 on: May 22, 2014, 06:53:33 PM »
If you want that money to last her as long as possible, I'm not sure that trying to get her to move to San Diego is your best bet, given what an expensive city it is.  Is there any other family (your brother) that she could live near instead? 

In your shoes, assuming I'd discussed it with mom and she was actually interested in moving to the States, I'd consult an accountant for starters. S/he should be able to tell you the best way to get money from one country to another, in the most tax-efficient way possible. 

Also, it's unclear from your OP, but if her father is still alive, it might make sense to look into whether there are ways he can give her some of that money now, or set up a trust of some sort (no idea about laws in the Philippines) that would help her avoid estate taxes there.

My brother lives in NYC lol.  I agree about san diego being prohibitively expensive....hmm....maybe I could find a place for her that's close enough that I could assist if there is any trouble, but cheaper than SD.  Regarding accountants, I have thought about that as well, and I don't even know how to go about looking for those. 

In Millionaire Next Door, they suggest calling a local university with a strong accounting program, cold-emailing faculty, and asking them if they have any recent graduate star students who were looking to go private and needed to build a client base.  My brother is pretty skeptical of this strategy, but there isn't really a yelp review system for accountants is there?

Villanelle

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Re: Has anyone every inherited money in another country?
« Reply #10 on: May 27, 2014, 12:45:04 PM »
Murietta or Lake Elsinore are much, much cheaper and, depending on where in SD you are, are probably less than an hour away.