So Your Client Wants to Marry a Non-Citizen? Buckle Up.

As an example, as of May 29, the U.S. Citizenship and Immigration Services estimated it would take 5.5 to 7.5 months for it to process a K1/K2 “Not yet married-alien fiancé(e) (I-129F)” petition using the CIS’s Vermont service center.

Tax Planning

Unlike nearly every other country in the world, U.S. citizens living outside the country have long been required to pay taxes to the IRS on all their income, even that gained in another country that was subject to that country’s income tax laws.

Some recent changes in U.S. tax law, notably the sweeping tax overhaul passed in 2017, has affected American citizens living abroad. The law’s ‘repatriation’ tax was designed to raise revenue by encouraging U.S. multinational corporations to pay lower taxes on their foreign earnings that had been ‘parked’ overseas. But Americans living abroad who hold dual citizenship are also subject to the tax, which must be paid quickly to forestall the possibility of dual nationals giving up their U.S. citizenship to evade the tax. The number of Americans renouncing their citizenship jumped from 231 in 2008 to an all-time high of 5,411 in 2016; the number doing so in 2018 was 3,983, according to the U.S. Treasury Department. Moreover, some U.S. citizens and green card holders who renounce their citizenship or green cards are subject to an expatriation, or “exit,” tax from the IRS — another reason to get expert accounting or tax attorney help when considering such a step.

For an American citizen who’s contemplating getting married overseas to a non-citizen, there are additional issues. While it will vary by country, a U.S. citizen can qualify for an exclusion of some of their income being subject to U.S. taxes based on the amount of time they’re living overseas. “There’s also a housing piece” to that exclusion, Soufan points out, so there may be some ways to shelter income from U.S. taxes. But those exclusions, such as the Foreign Earned Income Exclusion (FEIE) and the Foreign Tax Credit (FTC), have strict guidelines, which is why consulting with an accountant experienced in overseas income is crucial. If the U.S. citizen happens to be working for a large multinational firm, she likely can obtain some resources from the company if they relocate many people overseas.

While taxes likely should be a secondary consideration for a married couple in determining where they want to live, there are estate planning implications to a move. Soufan cites a client whom she has been working with whose daughter moved to Europe because the estate inheritance laws are so different. While married U.S. citizens can leave their estates to their surviving spouse without tax consequences, that’s not the case in many foreign countries.

Getting Help

If  you need to find expert financial and legal help pre-marriage for a client, an advisor can begin by perusing government sites for general background information. However, Soufan says the smartest move is to approach your network of attorneys and CPAs for referrals, but then only consider those with experience in international legal and financial issues. Find an expert in international estate work, she says, and for immigration legal issues consider members of AILA, the American Immigration Lawyers Association (AILA’s site includes a ‘Find an Immigration Lawyer’ feature).

Once you find some candidates, Soufan suggests you conduct your due diligence by interviewing each to determine their level of experience — “make sure they have tenure in the space” — and to discover what kind of fees they will charge.

Particularly with attorneys who charge by the hour, make sure that your client gathers all the information she will need to satisfy the government as to her good intentions and prior actions regarding her wish to marry a non-citizen. The process “can get very expensive, very quickly,” Soufan warns, so “the more organized you are early, the better.” If you’re not organized, that will make your experts “work harder; that will cost you,” Soufan warns.