Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

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investfrugal
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Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by investfrugal » Thu Apr 25, 2019 6:31 pm

I need some help thinking through what options we may have, if any, for overseas, offshore investing etc.

Unfortunately, I became disabled several years ago. Despite overwhelming medical evidence by my providers, I was denied SSDI (no LTDI). In addition, the delay in processing my claim was quite lengthy and as such, my work credits expired. What has been most upsetting throughout this process, is being treated like a common thief out to cheat the system. Both my husband and I have graduate degrees and I worked as a CPA for several years before becoming disabled. Like many here, we pay a goodly sum in taxes and consider ourselves good citizens. We have dutifully paid into Social Security through the years, but assumed that if a disability were to occur, we would be awarded monies accordingly. I now look at the $10K withheld annually for Social Security and Medicare from my husband’s paycheck and simply shake my head. My health conditions are severe so being awarded Medicare was of critical importance, especially in light of potential changes in the ACA. Bottom line, I feel like I have been lied to, cheated and no longer feel the same about this country or my citizenship.

I am fortunate that my spouse earns a very good living and due to extreme frugality, we have a comfortable nest egg of $3M. We both have ROTHS ($150K - $200K each), spouse has a 401K (@$550K) and the remaining $2M is in a joint account. All but the 401K are in index funds, DFA and Vanguard. We hired a reputable financial planner several years ago when I became unable to properly manage the investments due to my fading cognitive skills.
I am 50 and spouse is 49. My spouse safely expects to receive an inheritance from his parents of approximately $2M which is currently held in Trust. We have included that amount in our financial plan, however I don’t feel comfortable with it being frittered away due to my health conditions and the unwillingness of our government to honor its obligations. My spouse had hoped to go part time within the next 5 years, but that may not be possible now if something happens to ACA and I can't get insurance.

I know that I am angry and don’t want to cut off my nose to spite myself. Of course, we need to have a discussion with our financial planner and our estate plan attorney. But at the moment, I want to move ourselves and our assets overseas and never pay a dime of taxes again. Alternatively transfer all the assets to my spouse and voluntarily impoverish myself to qualify for Medicaid (something I previously considered unethical).
An anyone offer any sound advice?

Gill
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by Gill » Thu Apr 25, 2019 6:38 pm

Do you know that leaving the country won’t relieve you of US income tax?
Gill
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quantAndHold
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by quantAndHold » Thu Apr 25, 2019 6:41 pm

First, do/did you have an attorney helping you with the SSDI claim? Something like 70% of people are initially denied. Most people that get approved have lawyers.

Second, as a US citizen, You'll still owe taxes, even if you're living abroad. You can renounce citizenship, but you have enough assets that you'll owe the exit tax.

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investfrugal
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by investfrugal » Thu Apr 25, 2019 6:43 pm

Gill,
Of course. Perhaps I should have been more clear in the question. I'm looking for legal ways around that....

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investfrugal
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by investfrugal » Thu Apr 25, 2019 6:45 pm

quant and hold,
Its a done deal. Intial denial and attorney hired years ago. No more appeals. Attorney was a shocked as I was.

Yes I'm aware of those two facts. But I'm trying to consider legal ways around that...Hence the question

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aspirit
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by aspirit » Thu Apr 25, 2019 6:49 pm

investfrugal wrote:
Thu Apr 25, 2019 6:31 pm
I need some help thinking through what options we may have, if any, for overseas, offshore investing etc.

Unfortunately, I became disabled several years ago. Despite overwhelming medical evidence by my providers, I was denied SSDI (no LTDI). In addition, the delay in processing my claim was quite lengthy and as such, my work credits expired. What has been most upsetting throughout this process, is being treated like a common thief out to cheat the system. Both my husband and I have graduate degrees and I worked as a CPA for several years before becoming disabled. Like many here, we pay a goodly sum in taxes and consider ourselves good citizens. We have dutifully paid into Social Security through the years, but assumed that if a disability were to occur, we would be awarded monies accordingly. I now look at the $10K withheld annually for Social Security and Medicare from my husband’s paycheck and simply shake my head. My health conditions are severe so being awarded Medicare was of critical importance, especially in light of potential changes in the ACA. Bottom line, I feel like I have been lied to, cheated and no longer feel the same about this country or my citizenship.

I am fortunate that my spouse earns a very good living and due to extreme frugality, we have a comfortable nest egg of $3M. We both have ROTHS ($150K - $200K each), spouse has a 401K (@$550K) and the remaining $2M is in a joint account. All but the 401K are in index funds, DFA and Vanguard. We hired a reputable financial planner several years ago when I became unable to properly manage the investments due to my fading cognitive skills.
I am 50 and spouse is 49. My spouse safely expects to receive an inheritance from his parents of approximately $2M which is currently held in Trust. We have included that amount in our financial plan, however I don’t feel comfortable with it being frittered away due to my health conditions and the unwillingness of our government to honor its obligations. My spouse had hoped to go part time within the next 5 years, but that may not be possible now if something happens to ACA and I can't get insurance.

I know that I am angry and don’t want to cut off my nose to spite myself. Of course, we need to have a discussion with our financial planner and our estate plan attorney. But at the moment, I want to move ourselves and our assets overseas and never pay a dime of taxes again. Alternatively transfer all the assets to my spouse and voluntarily impoverish myself to qualify for Medicaid (something I previously considered unethical).
An anyone offer any sound advice?
Advice?

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Good luck!
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staythecourse
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by staythecourse » Thu Apr 25, 2019 6:53 pm

No offense, but think you need to take a breath and stop losing your marbles and focus.

Your plan is not useful as you would need to give up your citizenship otherwise you have to pay taxes like any other U.S. citizen despite living abroad.

If I was in your situation I would start hiring some lawyers. Get a good disability lawyer and estate/ elder lawyer. The former will walk you through the process of HOW to get medicare/ SSI disability. The other is a estate/ elder lawyer who has experience in how to structure money so you can utilize programs without going broke as a couple due to your illness.

Good luck.

p.s. I do understand the needing to vent, but in the end it doesn't get anything done.
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coalcracker
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by coalcracker » Thu Apr 25, 2019 6:54 pm

Which is more important to you:

1. Not pay US taxes on principle because you feel the system has failed you
2. Optimize your retirement finances

I ask because I think advice may differ depending on your priorities.

quantAndHold
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by quantAndHold » Thu Apr 25, 2019 7:10 pm

I'm sorry for your situation.

The same attorney who helped you on the SSDI appeal can probably walk you through your options for Medicaid.

You might be able to cut both your living expenses and tax rate by moving abroad, but your US taxes won't go to zero unless you become a citizen of another country and renounce your US citizenship. The problem with moving abroad in your situation is that if you're disabled, I assume at some point you will want or need more support from family and friends than you and your husband can get living in a foreign country.

You are fortunate to have $3M in investable assets, and expect a large inheritance. My recommendation would be to work with your financial planner to ensure your and your husband's needs are taken care of.

livesoft
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by livesoft » Thu Apr 25, 2019 7:14 pm

More than 40% of US families do not pay federal income taxes. I don't see why you would have to move overseas to be able to have a tax liability of zero.

Maybe as a CPA you did not work on taxes, but you can still learn about income taxes and see how to not have to pay them.

Here is a thread to read for starters: viewtopic.php?t=87471
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123
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by 123 » Thu Apr 25, 2019 7:16 pm

investfrugal wrote:
Thu Apr 25, 2019 6:31 pm
...Despite overwhelming medical evidence by my providers, I was denied SSDI (no LTDI). In addition, the delay in processing my claim was quite lengthy and as such, my work credits expired...
To pursue a claim for Social Security Disability benefits there is a requirement that the disabled worker have so many recent credits for work prior to the beginning of the disability. So a person who had a consistent work pattern would have some additional coverage for a disability that begins, or worsens during that subsequent period. So in filing a claim for disability benefits it is essential to pursue a timely appeals process on a denied claim to keep the claim active. If a denial is rendered on a disability claim AFTER the expiration of work credit coverage and the worker fails to timely pursue their appeals process, including administrative hearings and civil court proceedings if necessary the Social Security Administration will consider the time period and disability period closed. No further review of disability would be performed by the SSA until sufficient additional work credits are established to once again meet the recent work credits requirement.

So if the OP is within the regulatory appeals period, as disclosed on the most recent claim decision she has received, she should persue her claim.
The closest helping hand is at the end of your own arm.

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investfrugal
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by investfrugal » Thu Apr 25, 2019 7:18 pm

staythecourse wrote:
Thu Apr 25, 2019 6:53 pm
No offense, but think you need to take a breath and stop losing your marbles and focus.

Your plan is not useful as you would need to give up your citizenship otherwise you have to pay taxes like any other U.S. citizen despite living abroad.

If I was in your situation I would start hiring some lawyers. Get a good disability lawyer and estate/ elder lawyer. The former will walk you through the process of HOW to get medicare/ SSI disability. The other is a estate/ elder lawyer who has experience in how to structure money so you can utilize programs without going broke as a couple due to your illness.

Good luck.

p.s. I do understand the needing to vent, but in the end it doesn't get anything done.
staythecourse,
I don't take offence. However I assure you I am not losing my marbles.

I guess we imagined that there were certain loopholes which could be investigated, such as offshore investing etc. Something that would not necessarily be readily suggested by our belts and suspenders financial planner and estate planning attorney.
We are aware of both the exist tax and necessity of paying income taxes while living overseas. But again, thought the Board members may have certain recommendations for ideas around this.

No need for SSDI attorney (see above). Yes I plan to consult a special needs attorney to discuss Medicaid planning. But he won't know anything about offshore investing.

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investfrugal
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by investfrugal » Thu Apr 25, 2019 7:18 pm

coalcracker wrote:
Thu Apr 25, 2019 6:54 pm
Which is more important to you:

1. Not pay US taxes on principle because you feel the system has failed you
2. Optimize your retirement finances

I ask because I think advice may differ depending on your priorities.
Definitely #2.

Topic Author
investfrugal
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by investfrugal » Thu Apr 25, 2019 7:28 pm

quantAndHold wrote:
Thu Apr 25, 2019 7:10 pm
I'm sorry for your situation.

The same attorney who helped you on the SSDI appeal can probably walk you through your options for Medicaid.

You might be able to cut both your living expenses and tax rate by moving abroad, but your US taxes won't go to zero unless you become a citizen of another country and renounce your US citizenship. The problem with moving abroad in your situation is that if you're disabled, I assume at some point you will want or need more support from family and friends than you and your husband can get living in a foreign country.

You are fortunate to have $3M in investable assets, and expect a large inheritance. My recommendation would be to work with your financial planner to ensure your and your husband's needs are taken care of.
quantandhold,
Thank you. For Medicaid planning I would need to meet with a elder care attorney who will probably work alongside our current estate planning attorney. Im pretty comfortable with that arena.
What I was looking for from the Board was for potential ideas to circumvent the obvious; exit tax and paying income taxes as an expat. Something like offshore planning which is not likely to be raised by our belts and suspenders financial planners and estate plan attorney. Thus far, I don't see anything that I didn't know already....

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investfrugal
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by investfrugal » Thu Apr 25, 2019 7:32 pm

livesoft wrote:
Thu Apr 25, 2019 7:14 pm
More than 40% of US families do not pay federal income taxes. I don't see why you would have to move overseas to be able to have a tax liability of zero.

Maybe as a CPA you did not work on taxes, but you can still learn about income taxes and see how to not have to pay them.

Here is a thread to read for starters: viewtopic.php?t=87471
livesoft,
Thank you. Do you have any input on the question I asked? Options for moving assets abroad, offshore investing, etc.? A way to avoid the exit tax and US income tax?
Last edited by investfrugal on Thu Apr 25, 2019 7:35 pm, edited 1 time in total.

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investfrugal
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by investfrugal » Thu Apr 25, 2019 7:34 pm

123 wrote:
Thu Apr 25, 2019 7:16 pm
investfrugal wrote:
Thu Apr 25, 2019 6:31 pm
...Despite overwhelming medical evidence by my providers, I was denied SSDI (no LTDI). In addition, the delay in processing my claim was quite lengthy and as such, my work credits expired...
To pursue a claim for Social Security Disability benefits there is a requirement that the disabled worker have so many recent credits for work prior to the beginning of the disability. So a person who had a consistent work pattern would have some additional coverage for a disability that begins, or worsens during that subsequent period. So in filing a claim for disability benefits it is essential to pursue a timely appeals process on a denied claim to keep the claim active. If a denial is rendered on a disability claim AFTER the expiration of work credit coverage and the worker fails to timely pursue their appeals process, including administrative hearings and civil court proceedings if necessary the Social Security Administration will consider the time period and disability period closed. No further review of disability would be performed by the SSA until sufficient additional work credits are established to once again meet the recent work credits requirement.

So if the OP is within the regulatory appeals period, as disclosed on the most recent claim decision she has received, she should persue her claim.
Thank you,
Do you have any input on the question I asked? I am looking for legal ways to circumvent the exit tax and having to pay income tax while living overseas. Such as offshore banking etc. Any ideas?

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by hicabob » Thu Apr 25, 2019 7:36 pm

investfrugal wrote:
Thu Apr 25, 2019 7:34 pm
123 wrote:
Thu Apr 25, 2019 7:16 pm
investfrugal wrote:
Thu Apr 25, 2019 6:31 pm
...Despite overwhelming medical evidence by my providers, I was denied SSDI (no LTDI). In addition, the delay in processing my claim was quite lengthy and as such, my work credits expired...
To pursue a claim for Social Security Disability benefits there is a requirement that the disabled worker have so many recent credits for work prior to the beginning of the disability. So a person who had a consistent work pattern would have some additional coverage for a disability that begins, or worsens during that subsequent period. So in filing a claim for disability benefits it is essential to pursue a timely appeals process on a denied claim to keep the claim active. If a denial is rendered on a disability claim AFTER the expiration of work credit coverage and the worker fails to timely pursue their appeals process, including administrative hearings and civil court proceedings if necessary the Social Security Administration will consider the time period and disability period closed. No further review of disability would be performed by the SSA until sufficient additional work credits are established to once again meet the recent work credits requirement.

So if the OP is within the regulatory appeals period, as disclosed on the most recent claim decision she has received, she should persue her claim.
Thank you,
Do you have any input on the question I asked? I am looking for legal ways to circumvent the exit tax and having to pay income tax while living overseas. Such as offshore banking etc. Any ideas?
I think you would have to renounce citizenship to do that. Better have an alternative citizenship ready.

livesoft
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by livesoft » Thu Apr 25, 2019 7:37 pm

I lived overseas. I didn't pay US taxes when I lived overseas.

I think you can fill out "What if?" tax returns with your tax prep software to see various scenarios with your own eyes. Your assets are not particular large, so I don't see a problem with leaving your assets in the US and investing tax efficiently in order to pay no federal income taxes.

I think your thinking appears to be fogged with mild rage because you seem to be proposing unnecessary solutions to a no-tax problem.
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protagonist
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by protagonist » Thu Apr 25, 2019 7:46 pm

I'm a bit confused, OP.

Your situation:
- both about 50 y.o.
- $3M nest egg
- stand to inherit another $2M
- by your accounts, very frugal

In other words, you are rich...many would say very rich..... and set for life if you don't do anything financially stupid (which you probably won't if you are frugal).

Yet you talk about "impoverishing yourself for Medicaid", or leaving the country, not because you want to which is a good reason (with that kind of money you can live wherever you want), but for financial reasons.

And your husband is still working. So he would have to give up his job if you move.

Are your health care bills so high that you will not be able to cover them?

Because if not, your plan sounds pretty crazy to me. Rule one: DON"T PANIC!

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investfrugal
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by investfrugal » Thu Apr 25, 2019 7:53 pm

livesoft wrote:
Thu Apr 25, 2019 7:37 pm
I lived overseas. I didn't pay US taxes when I lived overseas.

I think you can fill out "What if?" tax returns with your tax prep software to see various scenarios with your own eyes. Your assets are not particular large, so I don't see a problem with leaving your assets in the US and investing tax efficiently in order to pay no federal income taxes.

I think your thinking appears to be fogged with mild rage because you seem to be proposing unnecessary solutions to a no-tax problem.
livesoft,
So the answer is no. I appreciate the sentiment but I'll be brutally honest. My bandwith with condescending comments is at all time low. As a former CPA I know my way around taxes and all the minimization strategies. As does our CPA/CFP who now does our taxes. What I don't know, and what I asked was for input regarding offshore investing. I don't need your comments re my knowledge as a CPA nor my emotional state.

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AndrewXnn
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by AndrewXnn » Thu Apr 25, 2019 7:56 pm

Extremely easy to do this legally ...

Just be grateful for what you have and charitable to those far less fortunate than yourself.
Give away a few million dollars and you will have have minimal taxes to pay.

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by CnC » Thu Apr 25, 2019 8:00 pm

protagonist wrote:
Thu Apr 25, 2019 7:46 pm
I'm a bit confused, OP.

Your situation:
- both about 50 y.o.
- $3M nest egg
- stand to inherit another $2M
- by your accounts, very frugal

In other words, you are rich...many would say very rich..... and set for life if you don't do anything financially stupid (which you probably won't if you are frugal).

Yet you talk about "impoverishing yourself for Medicaid", or leaving the country, not because you want to which is a good reason (with that kind of money you can live wherever you want), but for financial reasons.

And your husband is still working. So he would have to give up his job if you move.

Are your health care bills so high that you will not be able to cover them?

Because if not, your plan sounds pretty crazy to me. Rule one: DON"T PANIC!
Exactly. Very very rarely do I pull the you are rich card card but at 5 million in assets you are the top 5 percent most wealthy people in the country. While it is ashame if you are disabled and can't collect disability. You are still better off that 95% of everyone else ±99% of all people on Earth.

If you wish to flee the country and avoid paying the taxes you are obligated to do y suggestion is to spend some of that money and find an attorney to creatively try and try and dodge the taxes you rightfully owe.

You certainly are not going to find any help here because if it was common knowledge nearly all of the rich would do it.

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by ResearchMed » Thu Apr 25, 2019 8:03 pm

investfrugal wrote:
Thu Apr 25, 2019 7:34 pm
123 wrote:
Thu Apr 25, 2019 7:16 pm
investfrugal wrote:
Thu Apr 25, 2019 6:31 pm
...Despite overwhelming medical evidence by my providers, I was denied SSDI (no LTDI). In addition, the delay in processing my claim was quite lengthy and as such, my work credits expired...
To pursue a claim for Social Security Disability benefits there is a requirement that the disabled worker have so many recent credits for work prior to the beginning of the disability. So a person who had a consistent work pattern would have some additional coverage for a disability that begins, or worsens during that subsequent period. So in filing a claim for disability benefits it is essential to pursue a timely appeals process on a denied claim to keep the claim active. If a denial is rendered on a disability claim AFTER the expiration of work credit coverage and the worker fails to timely pursue their appeals process, including administrative hearings and civil court proceedings if necessary the Social Security Administration will consider the time period and disability period closed. No further review of disability would be performed by the SSA until sufficient additional work credits are established to once again meet the recent work credits requirement.

So if the OP is within the regulatory appeals period, as disclosed on the most recent claim decision she has received, she should persue her claim.
Thank you,
Do you have any input on the question I asked? I am looking for legal ways to circumvent the exit tax and having to pay income tax while living overseas. Such as offshore banking etc. Any ideas?
Um, you keep asking about "circumventing taxes (of two types).

Er, there's a name for that, and we cannot discuss ways to do that here.

If you can't get the information about minimizing taxes (NOT "circumventing" them), from a proper attorney, you probably won't be getting particularly sound advice from anonymous internet posters who are offering you "ways to circumvent taxes..."

Sorry to be blunt, but you keep repeating that same request.

RM
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by k3vb0t » Thu Apr 25, 2019 8:04 pm

I would add this, OP:

It can be frustrating to ask Question A and get unrelated answers B, C, and D.

However, I believe the responses you tend to get on BH (answers B-D) attempt to answer the underlying question, or to cause you to pause and think through your original question. More of a diagnosing the disease, not the symptom.

You’ve got an extremely healthy financial situation, but are (understandably) feeling like you got the bait and switch with SSDI. If nothing can literally be done about that, have you considered getting counseling for your anger toward the system?

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by livesoft » Thu Apr 25, 2019 8:12 pm

investfrugal wrote:
Thu Apr 25, 2019 7:53 pm
So the answer is no. I appreciate the sentiment but I'll be brutally honest.
You are welcome! I was brutally honest as well, so that makes two of us. I like that.
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investfrugal
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by investfrugal » Thu Apr 25, 2019 8:22 pm

k3vb0t wrote:
Thu Apr 25, 2019 8:04 pm
I would add this, OP:

It can be frustrating to ask Question A and get unrelated answers B, C, and D.

However, I believe the responses you tend to get on BH (answers B-D) attempt to answer the underlying question, or to cause you to pause and think through your original question. More of a diagnosing the disease, not the symptom.

You’ve got an extremely healthy financial situation, but are (understandably) feeling like you got the bait and switch with SSDI. If nothing can literally be done about that, have you considered getting counseling for your anger toward the system?
Thanks
Yes that's exactly it. Obviously I was not clear in my post what I was looking for. I truly am looking for an answer to the actual question I posed (A). I am quite straight forward, so if ask a question I am literally looking for an answer to that question. So the off topic commentary (B-D) is indeed frustrating (even well intentioned suggestions for counseling) . Hence my constant attempt to minimize distractions and herd back answers towards the question asked (which frankly requires a lot of energy) I am looking for ideas to research before discussing with our advisers. It appears my search is fruitless.
Last edited by investfrugal on Thu Apr 25, 2019 8:27 pm, edited 1 time in total.

Gill
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by Gill » Thu Apr 25, 2019 8:22 pm

investfrugal wrote:
Thu Apr 25, 2019 7:53 pm
What I don't know, and what I asked was for input regarding offshore investing.
As a CPA you must know that offshore investing doesn’t relieve you of US income taxes unless you are looking for ways to evade taxes which we don’t discuss on this forum.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by gougou » Thu Apr 25, 2019 8:25 pm

I don't think you'll trigger the exit tax because your combined net worth is not over $4M (threshold is $2M for each individual).

You can establish residency in a tax haven and renounce your US citizenship. You can keep receiving Social Security when you retire but you won't have access to Medicare because Medicare only works in the US. You'll either leave the 401k in the US and pay US tax when you withdraw, or distribute all of it before you expatriate and pay US tax + 10% penalty.

Unless you have large unrealized capital gains in your $2M taxable account I don't think you'll save much taxes. As a non resident alien you'll be subject to 30% flat tax on US sourced dividend and a punishingly low US estate tax exemption, so you'll most likely need to divest into international stocks.

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by AlphaLess » Thu Apr 25, 2019 8:29 pm

1. Very sorry to hear you have the disability,
2. Very sorry to hear that you were denied SSDI,
3. May I ask what purpose moving out of the USA would accomplish, or you hope would accomplish?

Thanks
"You can get more with a kind word and a gun than with just a kind word." George Washington

mortal
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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by mortal » Thu Apr 25, 2019 8:35 pm

I have cerebral palsy, but I got a degree in computer science and make a living as a software developer. Frankly, I knew when I got my degree that I was 'crossing the Rubicon', so to speak, and would never qualify for disability again. You know what? That's ok! Today, I make about 20x what I made on disability. As long as I can move a mouse cursor, I can code. You seem to still be in possession of your mental faculties, I bet you could still work in some degree if you had some reasonable accommodations and a mind to. Please don't let your anger over your disability hold you back.

Worse comes to worse, heck you have enough for 60-80k worth of retirement income a year, with more to follow. Are you really going to get so angry over peanuts? Take a breath. You'll be ok.

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by Nate79 » Thu Apr 25, 2019 8:39 pm

What is the max SSDI benefit you would have gotten anyways? You are rich, with millions in assets and are worried about a few $k per month?

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by bhsince87 » Thu Apr 25, 2019 8:51 pm

In all honesty, you are not making much sense here.

Could you comfortably transfer financial decisions to your husband?

I realize he might not have the CPA experience that you do.

But, in your own words, "I became unable to properly manage the investments due to my fading cognitive skills. "
Retirement: When you reach a point where you have enough. Or when you've had enough.

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by Elena » Thu Apr 25, 2019 8:51 pm

Just broadly speaking, Europe is not as tax favorable as the US, except for Portugal. My dad complains at the tax brackets, lack of available deductions, cap. gains and div. tax rates, and complicated bureaucracy. He is in Spain, complaining, so he tought about moving to Portugal. However, now the EU has told Portugal it must comform to the EU taxation and not become a fiscal heaven. In case you heard Madonna is moving out, that is why. The UK is complicated too.
My suggestion would be to steer away from Europe. Life quality is excellent, particularly in Spain, but I myself would not put my own money there. No access to low expense ratio. Healthcare system is golden, but it is a crappy investment environment.
Just what I know, in case it helps.

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by Watty » Thu Apr 25, 2019 9:08 pm

protagonist wrote:
Thu Apr 25, 2019 7:46 pm
I'm a bit confused, OP.

Your situation:
- both about 50 y.o.
- $3M nest egg
- stand to inherit another $2M
- by your accounts, very frugal
And the maximum SSDI is $2,861 a month which is a significant amount not to get but with your other assets you could cover that.

I would suspect that being able use Medicare if you were on SSDI is a big part of the problem but that would not cover your spouse even if you could do that so you would still have a problem if he retired early. I assume that you are currently getting health insurance through your husbands work and he is planning on working full time for another five years. Most likely when he leaves his job he can use COBRA for at least another 18 months. If he works for another five years then you have healthcare insurance lined up for another 6.5 years.
investfrugal wrote:
Thu Apr 25, 2019 6:31 pm
An anyone offer any sound advice?
If you do have healthcare like I think for another 6.5 years then it is way too soon to panic.

If there are big problems with ACA then to me it seems likely that at least some states will come up with an alternative. For example before Obamacare Massachusetts has Romneycare. As I recall Hawaii also had a pretty viable healthcare system so before the ACA one of my vague fallback plans(daydreams ?) was to move to Hawaii for a few years if I had a gap between when I retired and could get on Medicare when I am 65.

An alternative to moving overseas could be to move to a different state that has better health plans available.

If you decide to move overseas you not only have to figure out the US taxes but you also need to figure out where you would move to. There may be a very limited number of countries where you could get a visa to live there permanently and to buy into their healthcare system.

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by WildBill » Thu Apr 25, 2019 9:14 pm

investfrugal wrote:
Thu Apr 25, 2019 7:53 pm
livesoft wrote:
Thu Apr 25, 2019 7:37 pm
I lived overseas. I didn't pay US taxes when I lived overseas.

I think you can fill out "What if?" tax returns with your tax prep software to see various scenarios with your own eyes. Your assets are not particular large, so I don't see a problem with leaving your assets in the US and investing tax efficiently in order to pay no federal income taxes.

I think your thinking appears to be fogged with mild rage because you seem to be proposing unnecessary solutions to a no-tax problem.
livesoft,
So the answer is no. I appreciate the sentiment but I'll be brutally honest. My bandwith with condescending comments is at all time low. As a former CPA I know my way around taxes and all the minimization strategies. As does our CPA/CFP who now does our taxes. What I don't know, and what I asked was for input regarding offshore investing. I don't need your comments re my knowledge as a CPA nor my emotional state.

Howdy

My background is as a business owner and corporate manager with many years of overseas experience, including substantial overseas investment experience.

Re your question on overseas investing:

There are many ways to invest overseas, and as a subset of overseas, “offshore”.

Overseas would be the transparent process of transferring assets to an investment firm or asset manager in another country and reporting the results faithfully to the IRS, as required by law. This does not relieve you of the “burden” of US taxes and will likely result in a substantial increase in fees. US firms are generally quite efficient and low cost in terms of the cost of asset management.

“Offshore” is a more ill defined term where you would use some form to of banking haven or an asset manager who would hold assets where you would not report to the IRS, with the objective of avoiding US taxes. If you have done any research at all you will see the indictments of a myriad of Swiss and other banks for these actions, along with asset forfeiture and felony convictions of the individuals involved in the last few year. If you decide to try this, good luck.

A subset of this activity is creating an offshore trust in a tax haven and legally doing business through this trust to sequester income and assets abroad. There are many variations on this theme. Setting it up and getting it going requires a substantial investment in legal fees and etc and a real business. If you have revenue below 10 million it is unlikely to be worthwhile.

There are certainly ways to accomplish what you want to do. In your situation as I read it they will be expensive and counterproductive.

Your ire at the US Govt and SSA are a fact; I would not translate that ire into an unfortunate financial strategy. I am sure there are more productive ways to channel your grievance than illl advised financial maneuvering.

Sorry for your troubles

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by jhendrix » Thu Apr 25, 2019 9:24 pm

Your emotions are going to cause you to make a bad decision. You really want to give up on a country that has allowed you and your husband to amass a fortune of 3million with 5million down the road?

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by EthanAllen » Thu Apr 25, 2019 9:35 pm

You may not want to hear this, but:

1) the costs associated with moving to another country are almost assuredly going to be greater than the costs associated with trying to get a few thousand in SSDI payments;

2) if one of your biggest concerns is trying to minimize taxes, going to almost any other country is a really bad idea for someone in your position;

3) if one of your other biggest concerns is healthcare related, going to most other countries is a really bad idea for someone in your position; and

4) if you are truly disabled, going to most other countries is also a really bad idea, especially as you grow older and need more medical care.

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by GrowthSeeker » Thu Apr 25, 2019 11:35 pm

From what little I know about offshore investing, it may have some utility in making it harder for creditors or lawsuits to get at your money, but as a method of avoiding US taxes, it doesn’t work that way at all. Things were probably different 40 years ago, it may have worked back then.
Just because you're paranoid doesn't mean they're NOT out to get you.

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by Valuethinker » Fri Apr 26, 2019 4:10 am

GrowthSeeker wrote:
Thu Apr 25, 2019 11:35 pm
From what little I know about offshore investing, it may have some utility in making it harder for creditors or lawsuits to get at your money, but as a method of avoiding US taxes, it doesn’t work that way at all. Things were probably different 40 years ago, it may have worked back then.
Yes and FATCA is something which is adhered to by financial institutions, globally - a benefit to the USA of its power in the world and place in the world economy & financial system (the centre).

So perhaps in the past US citizens abroad "forgot" to report some forms of savings & income - they would find it much more difficult to be below the radar now.

There's the world of offshore trusts but unless you have really significant assets, the costs of these are not worth the effort. And in US tax law they may not shield you from tax (don't know, I have never resided in USA)?

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by Valuethinker » Fri Apr 26, 2019 4:27 am

EthanAllen wrote:
Thu Apr 25, 2019 9:35 pm
You may not want to hear this, but:

1) the costs associated with moving to another country are almost assuredly going to be greater than the costs associated with trying to get a few thousand in SSDI payments;

2) if one of your biggest concerns is trying to minimize taxes, going to almost any other country is a really bad idea for someone in your position;
To be specific, under FATCA, as I understand it - a US citizen will always pay the *higher* of the tax of the country he/ she is in, and the tax of their last place of residence in USA.

(FATCA just ensures the information is reported to the IRS)
3) if one of your other biggest concerns is healthcare related, going to most other countries is a really bad idea for someone in your position; and

4) if you are truly disabled, going to most other countries is also a really bad idea, especially as you grow older and need more medical care.
I can think of countries with good healthcare - France, Scandinavia. Perhaps, also, healthcare might be a lot cheaper even if financed privately (thinking Mexico, Costa Rica, Philippines, Thailand etc - medical tourism is a thing.

Most countries that I know of, though, would want a disabled person to prove they were self-supporting, before allowing right to reside for any length of time. Given medical costs, that threshold could be very high.

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by casualflower » Fri Apr 26, 2019 4:43 am

Check out Puerto Rico. Still in the USA, but you can avoid some Federal income tax. It's not totally what you want (only gains accrued after you move are exempt I believe) but it may be as close as you get.

Google it, there's a lot out there.

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by JoeRetire » Fri Apr 26, 2019 5:58 am

investfrugal wrote:
Thu Apr 25, 2019 6:31 pm
Unfortunately, I became disabled several years ago.
Sorry to hear that.
Despite overwhelming medical evidence by my providers, I was denied SSDI (no LTDI).
I have heard that getting on SSDI is very difficult.
In addition, the delay in processing my claim was quite lengthy and as such, my work credits expired.
What does "work credits expired" mean?

I am 50 and spouse is 49. My spouse safely expects to receive an inheritance from his parents of approximately $2M which is currently held in Trust.
So you have $3M now and $2M later. That's good. With those assets it doesn't seem like the lack of SSDI would be that drastic.
My spouse had hoped to go part time within the next 5 years, but that may not be possible now if something happens to ACA and I can't get insurance.
Hopefully, the ACA will continue. Or barring that, some replacement will cover existing conditions.
But at the moment, I want to move ourselves and our assets overseas and never pay a dime of taxes again.
I'm not sure you'll actually be able to achieve the "never pay a dime of taxes again" part. But you certainly have plenty of funds available to move and live well in many parts of the world.

Do you have a new country in mind? Is the healthcare there good and stable?
Alternatively transfer all the assets to my spouse and voluntarily impoverish myself to qualify for Medicaid (something I previously considered unethical).
There are financial planners and attorneys who specialize in that sort of scheme. Make sure you get professional help if you choose that route.

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by JoeRetire » Fri Apr 26, 2019 6:01 am

quantAndHold wrote:
Thu Apr 25, 2019 7:10 pm
The same attorney who helped you on the SSDI appeal can probably walk you through your options for Medicaid.
Medicaid with $3M in the bank?

Or do you mean taking the self-impoverishment route?
You are fortunate to have $3M in investable assets, and expect a large inheritance. My recommendation would be to work with your financial planner to ensure your and your husband's needs are taken care of.
I agree! A good financial planner would help a lot.

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by jhendrix » Fri Apr 26, 2019 8:08 am

mortal wrote:
Thu Apr 25, 2019 8:35 pm
I have cerebral palsy, but I got a degree in computer science and make a living as a software developer. Frankly, I knew when I got my degree that I was 'crossing the Rubicon', so to speak, and would never qualify for disability again. You know what? That's ok! Today, I make about 20x what I made on disability. As long as I can move a mouse cursor, I can code. You seem to still be in possession of your mental faculties, I bet you could still work in some degree if you had some reasonable accommodations and a mind to. Please don't let your anger over your disability hold you back.

Worse comes to worse, heck you have enough for 60-80k worth of retirement income a year, with more to follow. Are you really going to get so angry over peanuts? Take a breath. You'll be ok.
Perfect perspective and an example to all

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by Broken Man 1999 » Fri Apr 26, 2019 8:40 am

Nate79 wrote:
Thu Apr 25, 2019 8:39 pm
What is the max SSDI benefit you would have gotten anyways? You are rich, with millions in assets and are worried about a few $k per month?
You beat me to it!

Perhaps it is the ability to get on Medicare to alleviate some of medical expenses.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by rooms222 » Fri Apr 26, 2019 8:51 am

metrunt wrote:
Fri Apr 26, 2019 4:43 am
Check out Puerto Rico. Still in the USA, but you can avoid some Federal income tax. It's not totally what you want (only gains accrued after you move are exempt I believe) but it may be as close as you get.

Google it, there's a lot out there.

I agree that there is an opportunity to look at the recent incentives for richer people to move to Puerto Rico. This might be better in terms of healthcare options as well.

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by Dottie57 » Fri Apr 26, 2019 9:14 am

You need to look at this - there is an exit tax.

https://americansoverseas.org/en/knowle ... it-tax-us/

I think you are looking for something that does not exist - a way to avoid taxes when you have significant resources.
Last edited by Dottie57 on Fri Apr 26, 2019 9:19 am, edited 1 time in total.

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Re: Disabled, Disillusioned, but Significant Assets - Move Overseas, Offshore?

Post by Mel Lindauer » Fri Apr 26, 2019 9:50 am

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