Hui-chin Chen, CFP®, is the managing partner of Jade & Cowry and has spent her career working with globally mobile families across Asia-Pacific; including her own, as the spouse of a US diplomat who has lived across multiple countries and tax systems. She is one of a small number of practitioners who understands both the technical US tax obligations that reach across borders and the cultural dynamics that make compliance so difficult to achieve.

This episode covers the compliance traps that consistently catch non-US citizens, US-connected individuals, and globally mobile families who never anticipated owing anything to the IRS.

In this episode

• Accidental Americans and the US tax net - how people become subject to US taxation through birth, the substantial presence test, green card status, or a US spouse, without ever identifying as American
• Planned citizenship and generational wealth in Asia - how affluent Asian families deliberately acquire US citizenship for the next generation and why, without comprehensive cross-border planning from the beginning, that decision creates compounding reporting obligations for decades
• The $60,000 US estate tax threshold for non-citizens - why a non-US citizen holding US stocks, real estate, or RSUs from a US employer faces a 40% estate tax above $60,000, how that threshold has never been indexed for inflation, and why almost no Asian countries have estate tax treaties with the US
• The non-US spouse filing trap - how a US citizen claiming a non-US spouse as a dependent or filing jointly to reduce tax liability can unknowingly pull that spouse's entire foreign financial picture into the US reporting system, creating obligations the non-US spouse never agreed to and may not know exist
• Joint accounts, family business signatory authority, and FBAR - why common Asian estate planning structures (joint accounts with parents, signatory authority on family businesses) trigger US reporting requirements the account holder never considered
• Territorial tax regimes across Asia-Pacific - how Singapore, Malaysia, Taiwan, and other territorial systems interact with US citizenship-based taxation, and why holding assets in the US for diversification can create estate tax exposure that offsets the investment benefit entirely
• The four-to-six month pre-move planning window - why cross-border planning needs to begin months before a move, not after arrival, and why a full financial audit including family account involvement is the mandatory starting point

Resources

• Connect with Hui-chin on LinkedIn
• Are you a qualified professional serving US expats in France or Europe? Apply to passporttowealth.com/join
• Subscribe to the Passport to Wealth newsletter: passporttowealth.com/contact
• Find a vetted cross-border advisor: passporttowealth.com/directory

Mentioned in this episode:

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Hi, my name is Arielle Tucker and you're joining us on Passport to Wealth.

Today, I'm joined with Hui-chin Chen, who is a cross-border financial planner and

managing partner of Jade and Cowry, where she specializes in working with

globally mobile individuals and families, particularly those navigating complex

financial lives across Asia, Pacific and beyond.

She's also lived this lifestyle firsthand as this, as this spouse of a US

diplomat, moving across countries and seeing up close how different financial

systems and tax regimes interact in ways most people never anticipate.

Hui-chin Chen, thank you so much for joining me on Passport to Wealth today.

Thank you for having me, Arielle.

OK, let's start off because before we hit record, we were talking about all

these different potential ties that you have to the US, right?

You could be a non-citizen abroad and still have some potential US tax

exposure. We can, we talk all the time about accidental Americans.

Who are those and what does that mean?

Can you kind of break down those definitions for us?

Yeah, I think even going back to the label of extender American, that's, you

know, everybody probably has different definition of, you know, who would they

think that is.

But I think it's just the unique part of the US tax system, obviously, is if you're

a US citizen, you're taxed wherever, wherever you live.

And that applies to if you have a green card, whether you stay in the US for the

purpose of having a green card.

So people have green card cans still have residents overseas and spend some time

there. And then you have people who are perhaps married to a US citizens and

visit, you know, with their spouses back to their family spent enough time in the

US to cross their thresholds.

I think on the show, I talked about a substantial presence test and everything.

So there are multiple ways someone can be ensnared.

If that's a word into the US tax system, you may not even think that you're

American as a label, right?

Cause that's a very, like sometimes I don't necessarily think I was American

until I have a passport.

I was married to American, even though at the time I was living in the US already.

Right.

So that's a label that perhaps you don't necessarily associate with, but we're

just trying to get to the point of you don't have to feel American to have

US tax exposure.

Yeah.

And I think that goes to the theme.

US connected individuals aren't necessarily US citizens.

Right.

And that's kind of like the setting the stage for today's conversation is

understanding like, how can you potentially get ensnared into the US tax

system without maybe even realizing it, which I think goes to like, okay, that's

that gets to this theme of accidental Americans, even though you and I kind of

know that from like more of a, like a, I want to say legal, but it's not even a legal

standpoint, but that's just such a common phrase in our industry.

So what are some of the most common ways that you may become unexpectedly

entangled into the, into the US for financially or from a tax perspective?

I think there are many multiple categories.

If you're coming from the point of view of Asia, where US citizenship often is

planned, it's not probably not as accidental.

But a lot of time you would perhaps not planned by you, right?

It could be planned by your parents, by your family.

So you, you perhaps were born in the US and then you moved back to your home

country, you have no memory of ever living in the US.

But your family deemed that it's good to have a separate passport just in case,

right? So you're never really thought about, you know, having to file taxes.

For the more affluent and perhaps higher net worth family, like that would be

something they plan for, hopefully, like when they thinking about, okay, having

our next generation, having US passport, they have planned kind of family

wells around that already.

But not necessarily sometimes we still run into people who is like,

Hey, happy US passport.

I've never been to the US.

And then they have no idea that there is US tax obligations.

Sometimes spend on this idea a little bit, this idea of planned citizenship.

What, like, what does that mean?

What does that entail?

I mean, are people getting pregnant and then going to the US to have their

children very intentionally?

I mean, it's a concept that I've actually never thought about.

So I'm really curious what this plan means.

It could be, you know, there is still people that do that and plan to give birth

in the US.

And obviously there are ways for you to do it.

Sometimes you're from a visa waiver country.

Sometimes you already have a visa.

So you could stay in the US for whatever reason that the visa was for.

And, you know, you just happen to give birth.

So it's just how the US system works.

But when I said planned, it usually means that it's not, we're trying to

contrast to this idea of accidental, like you have no idea what you're doing.

I just happen to get a citizenship.

And I think a lot of more Americans who are born in the US, lived in the US and

now probably actually doing the same thing, right?

We're, I'm sure in your business, well, we're seeing a lot more people actively

looking for a second, you know, residency or a second passport.

So it's exactly the same thing.

It's just citizens from countries in Asia has started as much, you know, earlier

because it is a developing area.

So it's always seen as, you know, a step up if you can have a long term residency

or even citizenship in the developed world.

Yeah, we've been, we've been seeing this trend for a while now.

In the eighties, it was the Mercedes parked in the suburban driveway.

And now it's the second passport.

People are being really intentional about where can I go?

What's my easiest path to citizenship?

What's my exit plan if I no longer want to be in this country or just like that

freedom of travel?

And I don't know if you're seeing this with your clients, but like I know a lot

of our clients are feeling this like the borders are tightening.

It's harder to get the work visas.

It's harder to immigrates.

Harder to just show up and expect that they, that everyone wants you here.

And so thinking about that very intentionally is something my own

family is doing, right?

We're thinking about where are we going to have our second citizenship?

Yeah.

is the optionality by seeing this word, you know, being thrown out much more

just in general conversation in, you know, sort of the cross border or the

globally mobile community where having the optionality to be where you want to be,

not just in your home country, but somewhere else becomes something very popular.

It's so, I mean, it is so freeing to not feel like you're in a, in a box.

You have freedom of movement.

That is, that's a couple of years ago, right?

You could just pick up and walk right at what I crossed any border.

So we're definitely seeing that trend.

I have a, I have a question around the Asian families who are kind of planning

for this, this citizenship idea.

Is it because, I mean, it's political, developing countries, but is there any

like tax planning around this idea that like we are going to get, you know, this

child, US citizenship, and that way when they inherit all the wealth, they're a US

resident and they're not a, you know, name a country in Asia resident where we

have wealth tax considerations or higher tax considerations.

Is it going that intentional or?

I just, I don't know.

I don't know if the taxes, if I can generalize Asian tax systems, that seems really

dangerous.

I don't, I won't try to do that.

But I am curious, like, are there themes or trends that are very common in Asia that

maybe we don't see in the same way in Europe or in the US?

I would say that it's kind of sort of, I would say opposite, but the, the European

side, you know, when people are moving from US to Europe, you're usually going up, you

know, kind of the tax rate, right?

Like in terms of what, but hopefully you're getting more from actually living there.

But if you don't, then you're paying more tax and not getting the benefits.

So in Asia, it's kind of like sort of similar, but like going into the US system, you, you

are paying a lot of times you are paying more taxes just because on the, on, on the more

Asian countries, it's a residency based taxation.

And also a lot of them is territorial based taxation.

So they don't even tax investment income from outside of the border.

So a lot of people, because of that also have assets, you know, like they want the

optionality of living somewhere else, but also have assets in perhaps in countries

where they deem more politically stable.

I know a lot of people might laugh at that.

It's like, US is not political stable.

But if you're compared to a lot of developing nation, you know, for all the turmoil and even

it's fighting for democracy, right?

Like all of those things, if you think about that, US is still relatively stable.

You can be sure, relatively sure that your money is there if you want to access it

compared to your home country.

So that's also another consideration.

It's not necessarily just citizenship or a permanent residency.

It's also a place that seeing is relatively safer than their home country to put wealth.

Mm.

Okay.

And do, do you see like any trends with how they approach investing then?

Is it more investing through real estate or businesses or just access to US markets?

Like what is it that they're looking for?

Yeah.

So real estate is quite common.

Even if you just kind of like you never, for someone who never even like have no nexus to the US,

they could, you know, go through a broker and buy, you know, a vacation property in the US.

And if they have Esta or some kind of visa, they can go stay there or they can rent it out.

Right.

So that's quite common access direct access to US market as well.

Um, a lot of the, um, kind of US based brokers, like interactive brokers or Schwab, you know,

they open access to quite a few Asian countries, not all of them, but, you know, if you're a citizen

of that country or resident of that country, you can open in US based, um, uh, brokerage account

to have direct access to US individual stocks ETFs.

And because of territorial based taxation regimes, sometimes people choose to hold stocks that way.

So they don't pay tax locally.

Um, they can direct whole tax, which is a great planning opportunity, right?

If you are holding a US passport also, like, yeah, yeah, but then there's a US tax at US estate tax

exposure, as you know.

So it's kind of like you're, uh, yeah, no income tax, but estate tax.

And so at what point, uh, you kind of switch your focus on the estate tax planning part of it.

Yeah, that's a great point.

Are there, I don't even know off the top of my head.

Are there, do a lot of the Asian countries have treaties with the US or no?

There are quite a few treaties compared to Europe, not like, you would feel like most of the,

the countries have treaty that the on the Asian side, it will also work with Pacific.

So we also Australia and New Zealand.

So there are, I would say that the more developed countries, right?

Do you buy a Singapore, especially is like ones like you feel like there should be a treaty, but

there is no treaty.

Yeah.

So every country has different rules.

We talked about territorial and there's also the gradually entering into the taxation.

So kind of transitional tax regime, which Australia and New Zealand and Japan all have.

So if you just move there, then you don't necessarily pay tax immediately on what you can come to the

transitional period.

Yeah.

So that's the other, and you know, the other way around, see if you're moving from other places.

And just, I think just throw out a number there, the threshold for hitting US estate tax, which

goes up to what 40% is $60,000.

And that's not indexed for inflation.

And it's super, super low and it catches a lot of people off guard.

So if you end up having assets in the US and there is no estate tax treaty, it's something

that you need to be paying attention to so that you don't end up paying a lot of tax.

And they're not that many is that tax treaty.

I don't think they're any in Asian countries.

No, they're very few.

I think there was like 16, right?

So yeah.

Yeah.

So the one common thing that I've actually heard about is kind of more from, if you'll

work for US employers and you get our shoes equity, and you don't think about that as,

oh, I have, you know, US estate tax exposure because you never go to the US and the only

US stock you hold is your R shoes.

But because of that, and if most people don't think about it because you're not going to

die any day, right?

But like that happened, you know, I've heard situation where that happened.

And then you're a surviving family spouse, you know, is trying to get access to, you know,

all the heart or an R shoes and realize that, oh, yeah, they actually have to pay 40% tax on that.

So it's not something you necessarily can do too much about it.

If you, if your goal is to amass whole bunch of your company stocks, but if you now know that

that's an exposure, you know, amassing a lot of company stocks may not become your goal, right?

Yeah. Yeah, exactly.

What are some of, I mean, this is a good example of a trap that you see in working with those

globally mobile families.

Like what are some of the other issues that you see pop up that people are like, they're trying

to ask the right questions or trying to do the right thing.

But they're like, I said this before, you know, a lot of the stuff is not logical.

Right. You are not a US person. You have no ties to the US.

Why would you think that you're holding company stock and a company that you work for in a foreign

country would trigger potentially 40% taxation, right?

It's just what are some of the other gotchas that you come across?

I've seen examples of kind of interestingly, so this is perhaps not necessary just a cross-border

issue, but kind of like a, how do you manage finances with your spouse issue?

I'm sure you've seen a lot of couples where one of them is US citizens or a green card holder

and the other has no connection whatsoever and they don't live in the US, right?

So if you have a family where the US person is handling, you know, the US side of things and,

you know, there are ways where, oh, I can pay less tax if I claim my spouse.

You know, as a dependent or things like that, join filing or whatever in the US.

So I paid less tax and then you didn't think about, oh, you're pulling in your spouse's entire foreign

finance into US tax reporting system. I've seen that accidentally done many times and the foreign

spouse doesn't even know because, you know, that's the US side. I don't care. Like, I don't, I never plan

to go there. And so that's the part where beyond just thinking about the US taxation system is like,

if your spouse is a US person and you're not, is a really good kind of reminder just to check in

and see how it's being done, like on your end, there's definitely should be planning to make sure that,

you know, if you, if there's no benefit for you to be entangled on the US side, make sure that's not

happening. Oh my gosh, that is such an excellent example. I'm laughing because I'm thinking about a

case that we just had come across our desk. This happens. I don't see this a ton in Europe,

generally, right? Because we live in a high tax, we have generally more than enough, you know,

foreign tax credit. I don't see it as much here, but we had someone who was moving from Dubai into

Germany. And when they were living in Dubai, no tax, right? It made sense. Like whoever their

tax advisor was like, look, you, you work, you're paying all this tax, you make too much money.

It would be great if you pull your spouse into the tax return to save a couple of thousand dollars a

year. But then she ended up making a lot of money at a separate venture. And now all of a sudden,

they're like both entangled and they totally don't understand what's actually happening. And

this is, I see this all the time, the theme is we're looking at one year in order to save,

you know, a couple hundred dollars or a couple thousand dollars for that one year, we're making

these elections. And then we have to unwind those because it doesn't make sense later.

That's really, really important to understand. I always try to get the non US connected,

the non US connected person on the call, because you want, you need to make sure they understand

and hear some of the stuff because it's, you know, the IRS is like very scary, right? And,

but you need to understand you can't just be on autopilot because if your US spouse passes

away, you might be dealing with the IRS. You might still have to deal with US financial

institutions. These are these are still things to stay engaged in. Yeah. And one thing I also

see is that you're making that decision based on income alone and not all the reporting requirements

and perhaps kind of like family, like your spouse may have family investments that you don't know

about, right? Like, because you're not part of the local family situation. So like you're basing

your following US following decision, 100% on oh, my spouse doesn't work. So hey, you know,

that's extra deduction. Great. And you know, but you didn't have full picture of your

necessary, your spouses, like family finances, like if she's getting her

account and all of those things that you may not know about.

Oh, that's like something I hadn't even thought about before this conversation. But you're right,

like culturally Asia, very different than the US, right? And so I would imagine like,

do you are there like kind of themes that rise when we again, I know Asia is a big place? But are

there certain themes or certain countries that you see these issues like popping up all the time

about how finances are handled and that having maybe surprising consequences on the US tax return?

I think it's the general again, Asia is huge. But I think in general, there is

the sense of if you don't report it, the government doesn't know.

Okay. Yeah. So and also think like some part like there's not necessarily a high trust in

government, right? And I think some people in the US might feel like, oh, yeah, now I have no trust

in government. But I think that's a very big distinction of whether you have a general

trust in government is doing the right thing with your tax money, or you don't trust a government

that wants to disclose all of your financial information that they're just going to come after

you for no reason, right? So I do feel culturally there is more hesitancy of whether US system is

demanding is requiring a taxpayer to do is very not fitting in, right?

Like you must declare all the foreign bank accounts, like all of your like foreign assets,

all of your foreign holdings and basically everything. It's so much information, right?

Correct. Crazy. Yeah. Yeah. And if you, your general sense of you don't trust a government,

then you're, you tend to look at it as what's the minimal I can report as possible. And that's

often you will run into that kind of kind of like a cultural clash when, especially if you have a

US tax person trying to handle this for you, right? And I've seen people who were just,

when they try to come into compliance, and if they weren't previous compliance, that is a big deal.

And we talked about earlier, the whole family finances, like there, there's also tighter kind of

family control companies, but by more of those things in Asia. But they also want to have,

want their kids to have a better life. So there is more citizenship planning outside of your home

country. And then if those are not done, well, eventually we'll be like, Oh, the next generation,

like, Hey, you're, you're the person that get me a US passport. Now I have to report everything

related to the family business. But then the next, the upper generation is like, they don't need to

know about our family business. Right. So a lot of those things needs to be planned.

Almost like if you if the Asian family decided, you know, for political reason,

economic reason, our next generation should have a second passport. And you they decided that the US

is the best place to get it. Then the entire family finance planning starts then really.

Yeah, I mean, and that I think the realization of that, and I'm curious, like,

are they picking the US just because of the citizenship laws are the the very, I mean,

you're born in the US, you're a US citizen, that is our citizens, the chip laws. I talk to people

about this all the time, my daughter's born in Switzerland, she is not a Swiss citizen, she will

be, but not currently. So in most of the world, we don't have that automatic right to citizenship.

I think Canada, I think Canada has it as well. I'm not sure if the top of my head.

I don't think I don't think I know. Okay. No, they had for a while.

Germany had it a long time ago, but yeah, a lot of countries have changed. Like it's just not,

the US is one of those special places where we still have it. Very interesting, very, very

interesting. When you think about, I mean, again, because you work with all these different countries

in Asia, Asia Pacific, are there any favorite countries that you have from like, maybe attacks

planning or immigration standpoint? Like, is there anything that pops into your mind that

you're like, oh, this is really cool. And I know you talked a little bit about like this transitional

tax period, which I think sounds really interesting as well.

Yeah. So it really has a huge range. You have from kind of Singapore, Malaysia, where

they is territorial, they don't tax anything arising outside of the border. You still have

not citizenship based, but more like residency based and tax on worldwide income. So in Taiwan,

it's like that China, Hong Kong. And then you have the transitional regime. So it's so for people

who are going into the country, it's applied like, yeah, Australia and New Zealand and Japan,

like they have a transitional period where you don't pay tax on foreign investment income,

and gradually transition into paying tax on worldwide income. So that's what the UK was

transitioned into as well. They basically kind of copy the New Zealand, Australia model there.

Yeah. And basically get out of the remittance regime. Yeah. So there are many different

possibilities for taxation. And dependent, if you're talking about people who are originally from,

you know, some Asian countries, like Singapore, Malaysia. So it's very popular for them to whole

investments overseas. Because the idea is that, you know, then you don't pay tax, right? Like,

there is like a zero prison, send tax incentive. It's similar. Like in Taiwan, there is similar

thing. We don't we still have tax on worldwide income, but there is a large exemption on investment

income arising from outside of the territory. Now we have wealth tax here in Switzerland.

I'm curious, is that something that you see in Asia?

That not that I know of, I haven't really seen wealth tax in general. We talked about general

slightly distrust of the government. So there is also in terms of visibility. Normally people

don't want government to know about everything. So it's difficult for government to tax based on,

you know, self disclosed data. Okay. Final question for today. If someone is living this globally

mobile lifestyle, and at some point, right, that's probably going to take them to the US,

even if they're not US persons. So what would be one piece of advice that you would share with

that person as they prepare to move into the US or maybe out of the US? Like, what would you do

if you were working with those with those individuals? Talk to someone at least four to six months

before you actually make the move. So you have time to make plans or to actually execute some of

the plans before you leave. But before then even a huge part of it is a true

comprehensive understanding of your finances. Coming from Asian point of view, what we've seen a lot

is the family connection. So you may have a true understanding of your personal, you know, like,

these are my account. These are my investments and everything. You just probably didn't think

about, Hey, I'm also a signatory on my family business, right? Or like, I can, you know, I'm already

a joint account owner with my parents, which are very, very common in Asian families. That's how

we do estate planning. A lot of times in our home country is that you have some kind of

signatory or joint, joint custody accounts or so that doesn't necessarily translate well into a

Western, you know, financial system and routine. So especially if you are in that situation,

you probably need at least definitely more than six months and think about work with someone to

think about all the angles because sometimes it's easy to say, Hey, this is everything I know I'm

just doing the best I can. But there will be something that you don't know. And that those,

that field is kind of constantly changing. So yeah, such great advice. I love that so much.

And I do think like getting setting that timeline of expectations, it does take time to do a whole

financial audit. And again, if you are having these joint accounts, these discretionary access points

somehow involved, unnamed on the family business for planning purposes in your home country,

that isn't immediately like, of course, that needs to be reported in the US.

Which on you do fantastic work. Thank you so much for joining us on Passport to Wealth as well today. I really

appreciate you sharing your time and expertise. Thank you for having me is fun talking through all

of these important but also interesting things that happen in our lives. Absolutely. Talk to you

soon. Me too. The content shared in this podcast is intended for informational and entertainment

purposes only and should not be considered financial tax or legal advice. We encourage you to consult

with a qualified financial advisor, tax professional or other licensed expert before making any decisions

based on the topics discussed. Everyone's financial situation is unique and personalized guidance

from a trusted professional is the best way to ensure your choices aligned with your individual

goals and circumstances.