The Management Of Foreign Wealth Entering The United States

In many ways, the United States is one of the safest domiciles for private wealth. Consequently, the country is attracting significant monies from the ultra-wealthy worldwide. Aside from investing in the United States, foreign families are increasingly looking for ways to manage and oversee their U.S. investments. Along these lines, there is a pronounced trend to leverage the family office expertise of leading U.S.-domiciled providers.

According to A. Todd Kesterson, Director of Family Office Services at CPA and advisory firm Kaufman Rossin and an authority of working with ultra-high-net-worth families, “We are seeing a growing number of foreign families selectively investing in the U.S. In these cases, they are not personally moving here preferring instead to live in their own countries, but they are looking to have a sizable portion of their wealth in the U.S. and the oversight of these assets done in this country. There are a multitude of reasons for this including trust and security concerns.”

Another variation of wealth coming into the United States is where the foreign family is heavily investing in and acquiring U.S. assets and needs expert support to manage those investments. “For some very affluent foreign families, the U.S. provides a safe shelter and an exceptional investment opportunity. These families tend to concentrate on real estate and privately-held businesses,” explains Adam Venokur, partner of Tarlow & Co. and Director of the Tarlow Family Office. “They regularly rely on professionals to help them coordinate other resources such as banks and realtors as well as address all the tax and legal implications of their investments. Very often we provide oversight of the properties or businesses. We also make sure everything is prepped for the families when they travel to the U.S.”

A third version of foreign money coming into the United States is when most everything is moved over, including the family itself. “The motivations vary, but when ultra-wealthy foreign nationals transition their holdings and themselves to the U.S., it requires a lot of specialized expertise and a very strong attention to detail,” explains Kesterson, who is based in Miami, a hotspot for wealthy foreign investors. “For example, inbound planning tops the list of ‘to do’ items. There are different ways to address tax matters depending on the particular circumstances of the ultra-wealthy foreign family. By understanding all the issues involved, we can work with the family to meet their goals and minimize their tax burden. Other considerations include how they want to manage and oversee their wealth once they are in the U.S. This can entail setting up their own family office or leveraging the skills of various professionals.”

What is clear is that exceptionally affluent foreign families are increasingly looking at the United States as a safe haven replete with high quality investment opportunities. Those foreign families that are taking steps to move substantial monies in the country are often relying on leading U.S. authorities to assist in the process as well as provide oversight. There are very strong indicators that this trend will only intensify in the near future.

Todd Kesterson, CPA, is a Family Office Services Principal at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S.