How to Collect the US Bank Account of a Deceased Foreigner
Do you have a family member who recently passed away and left behind a US brokerage account? If the deceased was not a US citizen and did not live in the United States at the time of death, as the heir to these accounts, you may face a long and difficult process to collect the funds.
Have you tried contacting the US brokerage online or via phone to no avail? Because this is a somewhat unique situation, many banks’ customer service departments will end up bouncing you from person to person, not sure of how to handle it. So you try to handle it on your own, but every time you complete one step, you end up speaking to another bank representative who tells you to start over and do something entirely different. The lack of information available on this process makes it hard for loved ones, who may also live overseas, to deal with it alone.
Marie found herself in this exact situation, and set out to try and collect the US account on her own. Based on her research, she knew she was required to do something involving US taxes, but otherwise she was lost. After making numerous phone calls with the bank and her accountant, she realized to do it on her own would require money and time she did not have! Plus, the court documents and legal filings intimidated her. She was worried she would do something wrong and lose even more time in the process.
Marie is not alone. More and more non-US resident aliens are opening accounts in America. Sometimes because they have businesses that receive, to hold some US dollars for currency, and sometimes for basic international tax planning. Over the years, the we’ve helped many overseas heirs recover their deceased loved ones’ accounts in the United States.
Can I Do This on My Own?
You can try, but it usually doesn’t end well. More often than not, clients come to us after wasting months of struggle and stress, only to end up realizing they need professional help. Still, if you’re determined to try, this outline should help:
First, you need legal authority, usually letters testamentary, over the US estate. Probate in the New York Surrogate’s Court is the ideal jurisdiction because (a) all major US banks have offices in New York; and (b) New York’s probate process is relatively straightforward compared to other US states.
Choose an Executor
You then need to decide on an executor for the US estate. Remember that non-citizens who live outside the US are not legally permitted to serve as executors. So in the absence of trusted friends and family who are eligible (and willing) to serve, you may need to reach out to a professional executor.
Get Tax Clearance
Once you’ve named an executor, you must obtain tax clearance for the estate. Without the proper tax clearance, the US bank will not release the funds. To receive this crucial clearance, either file a non-resident estate tax return or file an application for federal transfer certificates. After receiving tax clearance, you will be permitted to collect the account and transfer the funds to a US estate bank account.
Pay Debts & Close the Estate
After the funds have landed in the new estate account, you must ensure that all debts and taxes have been paid and officially close the US estate with the local court. It is only when this is completed that you will be able to withdraw the funds.
If you decide to go through this process without professional help, remember to be patient. This process usually takes between 9-18 months, but can take two or three times as long without professional guidance.
How Do I Get Professional Help Collecting These Funds?
Contact a US professional executor or probate attorney for help collecting the funds from your relative’s US accounts. I’ve had the privilege of serving many overseas clients, particularly from the UK, in similar situations. Many non-resident heirs have reached out to us in dire need of assistance, and have been pleased with how smoothly the funds were delivered.
Native to London, Rose recently contacted us after her husband passed away. As she worked on settling his estate in London, her UK attorneys discovered her husband, Peter, also owned a few US bank and brokerage accounts that she would now inherit. After months of working with her UK attorneys to resolve this issue, Rose was still without the funds she was entitled to receive. Rose was pleasantly surprised when she found our office and we immediately began to set up Peter’s US estate and move forward with the process.
While working with Rose and her UK attorneys, we faced a number of complications, but preserved through each of them to deliver Rose’s inheritance. First, our team was tasked with obtaining an exemplified copy of the court records from the UK, a lengthy process due to the differing technical terms and procedures between the US and UK.
Although initially Rose wanted to name a friend or family member living in the US as the executor, they each politely declined because of the complications and time required to take on such a responsibility. She quickly realized our team was the best choice to act as professional executor, and officially appointed us.
Soon after, we began to file the paperwork for the estate’s federal transfer certificates, but ran into another complication along the way. Because Rose had filed a UK inheritance tax return for Peter’s estate in London, our team had to file additional reporting to the IRS so they could view copies of the UK returns as well.
Despite these roadblocks, our team was successful in recovering the funds for Peter’s US estate and transferring the money directly to Rose. Not only was Rose ecstatic that we delivered, but she also felt a sense of peace knowing it was time to move on and she would not be presented with lingering debts, taxes, or other fees in the US, thanks to our team of professionals.
Our office is staffed with experienced New York probate attorneys and professional executors with many years of providing guidance to heirs overseas. Attempting to retrieve funds from the US can be a time-consuming and frustrating process for folks who have never been in this situation before. Save yourself time and trouble by allowing our team to act as your US executor and handle all legal and tax issues.