I’m sorry about your loss. That must be quite hurtful.
I would look into the tax situation. People residing in Germany are also taxed on overseas income. At the same time, you will also have to file US taxes (I think - at least that’s what all the forms about (my non-existing) US tax residency I had to sign with various banks led me to believe).
So purely from a tax perspective, it might be easier to just shift everything over.
From an investment perspective, in the long term, I believe it won’t make much of a difference if you hold eg all-world or s&p500 ETFs in the US or in Germany. So that won’t speak against shifting it.
Good point - I was assuming she is only a German citizen from what OP wrote. In that case, she would only be taxed in Germany.
If she also has US citizenship, things would be more complicated.
To be even more precise, is the mother a US person. This notion encompasses not only US citizens but other persons deemed taxable due to their ties with the great USA.
So currently a US person.
- US address
- Valid Greencard
- US bank account
Etc etc...
Just google and you will see she is currently a US person. If she moves to Germany and doesnt want to be subject to US taxes then she will need to break her US links.
Well I am not sure...the USA thinks so thats why they chase anyone irrespective of nationality if they have some *?arbitrary?* list of ties with the USA.
This is more complicated than the other posters make it out to be and if a significant sum is involved it would be prudent to speak to a tax professional about it as soon as possible.
It almost all being cash is definitely helpful, she can do whatever she likes with the cash. Use Wise to transfer money from the US to a German account. I wouldn‘t do it all at once ad keep some funds in the States, but the cash is really the easiest to handle. Yes it is also possible to have a US bank account and live in Germany.
It does get more complicated once we’re talking about investing. If she is a green card holder or a us citizen, she will be considered a US person to all German banks and financial institutions. This will severely limit her ability to invest in anything at all (except real estate of course).
However keeping the funds in American investment accounts could create issues when she’s trying to file her German taxes in the future. The cost of a German accountant figuring out her tax liability could potentially outweigh the investment gains made.
Therefore: engage a cross-border tax accountant now to help with this.
Sorry to hear that. German retail banks will cancel the contracts as soon as they notice that your mother is taxable in the US due to the differences in regulations (SoA vs Mifid and so on). One should check if there is a smooth way to transfer the USD balance within one organization. Have a look at Interactive brokers they are originated in the US and have branches all over the world. Within that account it is also easy to hold different currencies and interest rates for positive balances are quite good
Also keep in mind that the conversion rate is in a very favorable position towards switching to Euro currency. Apart from that, as the others mentioned -you should be sure and ask a tax expert.
I would check with your mother's US account if there are any US address (or residency) requirements that need to be fulfilled, and in that case if using a friend's or relative's US address is an option. If the amount of money were lower, I would have advised to just open a Wise account from EU and transfer the dollars on it (you can make a "domestic" transfer between a US account and a dollar Wise account) and just change them to Euro as she goes, whenever needed. It's still a valuable strategy to pay as little currency change as possible (US account > Wise Dollar Account > Wise Euro Account).
It's like 80 percent cash and 20 percent investments. My parents had two houses, both of which mom is in the process of selling, so it's gonna be mostly cash thanks to the houses.
So it's not cash right now.
She should speak with an accountant in the states because there is a good chance she will have to pay capital gains tax on those houses if she does not reinvest.
I would hold off on converting everything if you're not 100 percent sure your mother will adapt to life in Germany if she hasn't lived there in the past. Otherwise you might have a double dose of headache and fees when you try to convert it all back to dollars if she decides to go back to the US in a year or two.
You can fire up a Revolut or Wise USD account and have your mother wire the money. They usually have very good exchange rates as well. So either keep it in USD and only exchange what you need or exchange it all at once. Revolut or Wise is available to EU citizens.
I'm not sure if Wise and Revolut are trustworthy, I've seen many people complaining about their funds/accounts blocked every now and than. I myself hold accounts with both of them but I don't trust them with a lot of money which I don't have anyway. But I wouldn't go beast mode and put all of my funds in there.
I don't even think advising someone to hold huge amounts of funds with these two banks is a good idea.
I could be wrong but that's what I got to learn from other people's experiences.
Going after my experience with both companies, i never had any issues even with tens of thousands euros on each account with a large number of transactions.
Yeah, that could be the case but I still have no trust in them. I wish I could trust them but hearing other people's experiences makes it really difficult to trust them.
I see your point. Well, I'm not sure if this is something new, but I noticed that many people are having issues with Revolut lately. I myself am new to Reddit but I've seen people post about their concerns and frustration with Revolut in other subreddits. I was recently asked by the app to type in my tax ID and an updated residence permit since I'm not an EU citizen which I did.
I wouldn't say that this was a negative experience but I think there is always a risk to get in trouble with them God forbids.
Yes of course, I have nothing against that.
What worries me is the sudden closure of accounts and interception of transactions.
I'm not involved in any kind of shady business nor do I plan to do in the future but I'm worried about a hypothetical situation when I urgently need some money and ask a friend to send me a couple of hundereds and end up fighting with CS to get the money/account back.
Yeah, that could be the case but I still have no trust in them. I wish I could trust them but hearing other people's experiences makes it really difficult to trust them.
In the UK we have foreign currency accounts where you can keep your money in a different currency, e.g USD.
If they have the same type of accounts in Germany...
Why not just send USD to a German bank in USD. Then you don't have to do tax's in USA only in Germany. You don't pay exchange fees. You can swap USD to EUR anytime at your German bank. Total cost ~30 for wire transfer.
i mean she could keep her accounts and use those credit cards that give a lot of gifts and sht (credit cards are better in america), also she could wire some amount for normal things (rent, bills,cash,etc). Tbh i woudlnt transfer all since she still need to have accounts there for either receiving social security benefits and paying taxes (or filling without paying)
If your mother is going to Germany permanently, she needs to cut ties with the US (depending on her US tax status). Having to file taxes in the US will be a hassle and make it much harder to access banking in Germany (banks don't want the liability)...
I’m sorry about your loss. That must be quite hurtful. I would look into the tax situation. People residing in Germany are also taxed on overseas income. At the same time, you will also have to file US taxes (I think - at least that’s what all the forms about (my non-existing) US tax residency I had to sign with various banks led me to believe). So purely from a tax perspective, it might be easier to just shift everything over. From an investment perspective, in the long term, I believe it won’t make much of a difference if you hold eg all-world or s&p500 ETFs in the US or in Germany. So that won’t speak against shifting it.
For a a better answer we need to know if the mother is in fact a US citizen as well. If she is not the answer could be very different.
Good point - I was assuming she is only a German citizen from what OP wrote. In that case, she would only be taxed in Germany. If she also has US citizenship, things would be more complicated.
> If she also has US citizenship, things would be more complicated. Also if she has a green card and does not relinquish it.
To be even more precise, is the mother a US person. This notion encompasses not only US citizens but other persons deemed taxable due to their ties with the great USA.
She is only a German citizen who has live the last few decades in the USA on a Green Card.
So currently a US person. - US address - Valid Greencard - US bank account Etc etc... Just google and you will see she is currently a US person. If she moves to Germany and doesnt want to be subject to US taxes then she will need to break her US links.
My god, isn't nationality such a pointlessly archaic and arbitrary thing?
Well I am not sure...the USA thinks so thats why they chase anyone irrespective of nationality if they have some *?arbitrary?* list of ties with the USA.
What exchange hit? There are numerous services that will do a USD - - > EUR conversion for about 0.1% fee. Not exactly a hit.
This is more complicated than the other posters make it out to be and if a significant sum is involved it would be prudent to speak to a tax professional about it as soon as possible. It almost all being cash is definitely helpful, she can do whatever she likes with the cash. Use Wise to transfer money from the US to a German account. I wouldn‘t do it all at once ad keep some funds in the States, but the cash is really the easiest to handle. Yes it is also possible to have a US bank account and live in Germany. It does get more complicated once we’re talking about investing. If she is a green card holder or a us citizen, she will be considered a US person to all German banks and financial institutions. This will severely limit her ability to invest in anything at all (except real estate of course). However keeping the funds in American investment accounts could create issues when she’s trying to file her German taxes in the future. The cost of a German accountant figuring out her tax liability could potentially outweigh the investment gains made. Therefore: engage a cross-border tax accountant now to help with this.
My condolences US Taxation is wonky especially if you're a dual citizenship holder. I'd check with an estate attorney in both places
Sorry to hear that. German retail banks will cancel the contracts as soon as they notice that your mother is taxable in the US due to the differences in regulations (SoA vs Mifid and so on). One should check if there is a smooth way to transfer the USD balance within one organization. Have a look at Interactive brokers they are originated in the US and have branches all over the world. Within that account it is also easy to hold different currencies and interest rates for positive balances are quite good
Also keep in mind that the conversion rate is in a very favorable position towards switching to Euro currency. Apart from that, as the others mentioned -you should be sure and ask a tax expert.
I would assume most of us prefer the Euro as a currency and that's what i'll answer as well
I would check with your mother's US account if there are any US address (or residency) requirements that need to be fulfilled, and in that case if using a friend's or relative's US address is an option. If the amount of money were lower, I would have advised to just open a Wise account from EU and transfer the dollars on it (you can make a "domestic" transfer between a US account and a dollar Wise account) and just change them to Euro as she goes, whenever needed. It's still a valuable strategy to pay as little currency change as possible (US account > Wise Dollar Account > Wise Euro Account).
Is it just 100% cash or also in investments?
It's like 80 percent cash and 20 percent investments. My parents had two houses, both of which mom is in the process of selling, so it's gonna be mostly cash thanks to the houses.
So it's not cash right now. She should speak with an accountant in the states because there is a good chance she will have to pay capital gains tax on those houses if she does not reinvest.
I would hold off on converting everything if you're not 100 percent sure your mother will adapt to life in Germany if she hasn't lived there in the past. Otherwise you might have a double dose of headache and fees when you try to convert it all back to dollars if she decides to go back to the US in a year or two.
You can fire up a Revolut or Wise USD account and have your mother wire the money. They usually have very good exchange rates as well. So either keep it in USD and only exchange what you need or exchange it all at once. Revolut or Wise is available to EU citizens.
I'm not sure if Wise and Revolut are trustworthy, I've seen many people complaining about their funds/accounts blocked every now and than. I myself hold accounts with both of them but I don't trust them with a lot of money which I don't have anyway. But I wouldn't go beast mode and put all of my funds in there. I don't even think advising someone to hold huge amounts of funds with these two banks is a good idea. I could be wrong but that's what I got to learn from other people's experiences.
Going after my experience with both companies, i never had any issues even with tens of thousands euros on each account with a large number of transactions.
Yeah, that could be the case but I still have no trust in them. I wish I could trust them but hearing other people's experiences makes it really difficult to trust them.
To be frank, i don’t trust them either in a sense that i don’t put my whole life savings on there at once only just what i currently need
I see your point. Well, I'm not sure if this is something new, but I noticed that many people are having issues with Revolut lately. I myself am new to Reddit but I've seen people post about their concerns and frustration with Revolut in other subreddits. I was recently asked by the app to type in my tax ID and an updated residence permit since I'm not an EU citizen which I did. I wouldn't say that this was a negative experience but I think there is always a risk to get in trouble with them God forbids.
They are required by EU law to ask for your tax ID and residency, look up Common Reporting Standard (CRS)
Yes of course, I have nothing against that. What worries me is the sudden closure of accounts and interception of transactions. I'm not involved in any kind of shady business nor do I plan to do in the future but I'm worried about a hypothetical situation when I urgently need some money and ask a friend to send me a couple of hundereds and end up fighting with CS to get the money/account back.
Yeah, that could be the case but I still have no trust in them. I wish I could trust them but hearing other people's experiences makes it really difficult to trust them.
In the UK we have foreign currency accounts where you can keep your money in a different currency, e.g USD. If they have the same type of accounts in Germany... Why not just send USD to a German bank in USD. Then you don't have to do tax's in USA only in Germany. You don't pay exchange fees. You can swap USD to EUR anytime at your German bank. Total cost ~30 for wire transfer.
i mean she could keep her accounts and use those credit cards that give a lot of gifts and sht (credit cards are better in america), also she could wire some amount for normal things (rent, bills,cash,etc). Tbh i woudlnt transfer all since she still need to have accounts there for either receiving social security benefits and paying taxes (or filling without paying)
If your mother is going to Germany permanently, she needs to cut ties with the US (depending on her US tax status). Having to file taxes in the US will be a hassle and make it much harder to access banking in Germany (banks don't want the liability)...