Moving Abroad? Here’s What Every U.S. Expat Should Know About Their Finances

Your Finances Don’t Reset When You Land Abroad

Moving across the Atlantic can feel like a new beginning. But your finances don’t start fresh just because your location does —frequently, for U.S. citizens, they tend to get more complex, not less.

Whether you’re planning a move or already living overseas, understanding how your U.S. accounts, tax obligations, and estate plans function abroad is critical. Here’s what to keep a close eye on.

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U.S. Accounts Get Complicated Overseas

Your 401(k), IRA, or brokerage account doesn’t disappear when you move abroad — but your ability to use it might change.

Once you update your address to one outside the U.S., many providers restrict trading, block reinvestments, or in some cases, close accounts altogether. Even when they remain open, your host country may classify them as non-compliant or taxable structures, creating unexpected headaches.

For example:

• Dividend reinvestments may be blocked.
• Brokerage platforms may restrict certain fund purchases.
• Reporting requirements can multiply once your residency changes.

If your U.S. provider continues servicing your account, verify that it can legally do so for a non-resident. Some firms are not licensed to manage clients overseas — a detail that often only surfaces after you’ve moved.

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PFIC Rules Can Wreck a Perfectly Normal Investment

Many expats eventually ask: “Can’t I just invest locally?”

Technically, yes — but that’s where PFIC rules (Passive Foreign Investment Company) come into play.

To the IRS, most foreign mutual funds and ETFs fall under the PFIC classification. That means punitive tax rates, double taxation, and Form 8621 filings for each fund held.

Even a basic European index fund can become a PFIC, triggering complex calculations and higher U.S. tax liability than expected.

Avoiding PFICs typically means:

• Investing through U.S.-domiciled ETFs or mutual funds.
• Using specialised expat investment structures that remain IRS-compliant.

Local advisers rarely understand these nuances. Always confirm whether your financial adviser knows how they source U.S.-compliant products and what the PFIC implications are before you invest.

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Finding U.S.-Friendly Advice Is Harder Than You Think

Here’s a quiet truth: most international advisers won’t accept U.S. clients. FATCA regulations, SEC oversight, and U.S. tax-reporting complexity make compliance challenging.

Even when an overseas adviser agrees to work with you, they may lack U.S. tax literacy — leading to well-intentioned but damaging advice.

When seeking a cross-border adviser, look for professionals who are:

• Licensed in both the U.S. and your country of residence.
• Registered or recognised under SEC or equivalent regulations.
• Experienced in FATCA and PFIC reporting requirements.

And ask direct questions:

• Do you coordinate directly with U.S. tax preparers or CPAs?
• Can you liaise with my local accountant or lawyer?

A well-connected advisory team can help bridge the gap between tax systems, currencies, and compliance regimes — something generalist advisers simply can’t do.

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Retirement Planning Isn’t “Set and Forget” Anymore

Keeping your 401(k) or IRA untouched is possible — but not always optimal.

As an expat, you may find that your retirement accounts are no longer perfectly aligned with your residency, taxation, or long-term goals. Some plans restrict distributions abroad, while others prohibit cross-border rollovers or impose steep exit penalties if the transfer isn’t executed correctly.

Depending on where you live, an IRA rollover or consolidation strategy may help you:

• Simplify account management across providers.
• Access a wider investment universe.
• Maintain U.S. tax-advantaged growth without local compliance issues.

However, this must be structured carefully — ideally with input from a cross-border financial planner and a tax adviser familiar with local treaty treatment.

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Estate Planning Can Fall Apart in Transit

Living abroad means navigating multiple legal and tax systems at once. Your estate plan in the U.S. might not translate seamlessly into your country of residence.

You could face:

• Conflicting inheritance laws (forced heirship or spousal rights).
• Double estate taxation (IRS estate tax plus local inheritance tax).
• Ignored beneficiary designations if local law overrides them.

Even simple wills may not hold up overseas. Some countries automatically enforce probate locally, even if a will exists elsewhere.

To stay protected:

• Review your will and beneficiary designations with an international estate lawyer.

Check that your power of attorney and medical directives are recognised in both jurisdictions.

• Consider cross-border estate structures — such as compliant trusts or life assurance policies — to help simplify asset transfer and reduce exposure to multiple estate taxes.

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Offshore Doesn’t Mean Shady — But It Does Mean Paperwork

For globally mobile Americans, offshore structures aren’t about secrecy — they’re about compliance and coordination.

Well-regulated offshore accounts or insurance-based platforms can help manage investments efficiently across currencies and borders. However, all must be fully declared to the IRS through:

• Form 8938 (Statement of Specified Foreign Financial Assets)
• FBAR (FinCEN Form 114)

If your adviser recommends international structures, some questions you can ask:

• Will you help me complete the required IRS reporting forms?
• What documentation will I receive for my CPA or tax preparer?
• Do you assist clients during IRS audits or inquiries?

Full transparency and documentation are the keys to using offshore accounts safely and legally.

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Always Look for the Right Advice for You

Managing cross-border finances is complex — but it’s not impossible. With the right guidance, you may  structure your retirement assets, investments, and estate plan in a way that helps keep you compliant, tax-efficient, and financially secure.

Whether you’re still planning your move or already living abroad, working with a professional cross-border adviser who understands the interplay between U.S. and local laws can help you avoid costly mistakes and build confidence in your long-term plan.

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Speak to a U.S. Expat Financial Planning Professional

At Blacktower U.S. Expat Financial Planning, we specialise in helping Americans abroad manage retirement savings, investments, and estate planning across multiple jurisdictions.

Our advisers are licensed internationally and work closely with U.S. tax professionals to deliver coordinated, compliant solutions tailored to your goals.