Many Singaporean investors are building impressive investment portfolios, including US stocks and, for some fortunate individuals, Restricted Stock Units (RSUs) and stock options. However, a crucial detail often overlooked is the US estate tax.
This tax applies to US assets exceeding US$60,000 in the estate of a non-resident alien, with rates reaching up to 40%.
Imagine this: you’ve diligently built a US$1 million stock portfolio. Upon your passing, your loved ones inherit this wealth. Unfortunately, before they can access and potentially sell these stocks, they’ll face a hefty US estate tax bill – up to US$400,000! This can significantly deplete your legacy and force your beneficiaries to sell assets at potentially inopportune times.
Fortunately, there are solutions to minimize this tax burden and ensure a smoother inheritance process for your beneficiaries:
3. Life Insurance Solutions
As investors diversify internationally, it’s important to be aware of inheritance tax implications in other popular investment destinations. For instance, Japan’s inheritance tax ranges from 10% to 55%. Researching the tax landscape in your target markets is crucial for informed investment decisions.
By understanding the US estate tax and exploring the solutions discussed here, you can protect your loved ones from unnecessary tax burdens and ensure a smoother inheritance process.
Do reach out for a chat if you have any queries on your investment portfolio and legacy planning, and I’d be most happy to guide you through.
Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.
Winnie Chan is a distinguished Certified Financial Planner (CFP) with over a decade of expertise in financial advisory services. Her commitment to her clients has led many to achieve their financial aspirations while ensuring their families’ protection. Winnie‘s extensive experience in insurance claims has been instrumental in securing successful payouts, providing crucial financial relief during challenging times.
Her passion for community engagement is evident through her financial education initiatives. She has conducted insightful financial talks for esteemed organizations such as Carousell Group, Singapore National Eye Centre and Singtel, empowering their employees with valuable financial knowledge.
Outside of her professional commitments, Winnie balances her life with a passion for fitness and music. She enjoys rigorous workouts at the gym and is a pianist, recently awarded ABRSM Piano Performance Grade 6 (Merit).
