Last update on May 21, 2019

Expats may find their wealth ‘suspended’ between two cultures. A financial expert advises expats on how to deal with issues such as tax, retirement and repatriation planning.

Those who grew up in a country different than their birth country are called third culture kids. The term indicates a life that is suspended between two cultures: being at home and being a stranger in both cultures at the same time. As an expatriate, your wealth may be suspended between two cultures as well; expat financial planning can be difficult, especially as your family ages and your assets grow.

Those who live abroad can enjoy the richness of another culture, create lasting memories, and share altruistically with those who are less fortunate. Financially, a life abroad can be rewarding, but it can also be complex. The components of managing and protecting wealth while abroad are often very different than while at home.

We recently interviewed a number of expatriate families and those who serve their needs to understand their greatest financial challenges. In our interviews, we found that the financial goals of expatriate families centre around two main issues:

  • the growth of wealth to allow for freedom to return home financially improved, or
  • the preservation of wealth to ensure the ability to continue the international lifestyle they have chosen.

However, a long list of hurdles were voiced that must be navigated to accomplish those financial goals. For expatriates to grow and preserve wealth, these issues should be deliberately addressed. Here are a few of the hurdles which were voiced in our interviews:

Tax, tax, tax

The added dimension of tax planning and avoidance while abroad (especially for US citizens) can be mind-boggling. Tax issues are influenced by the tax equalisation policy of the employer (or lack of one). For US citizens, restrictive and ever-changing US tax law makes short and long-term tax planning a byzantine effort.

Retirement planning

Eligibility for retirement plans in the host country or the home country is not always clear. If employment status does not allow for either, it is sometimes possible to take advantage of tax-deferred retirement opportunities without the employer. Knowing when and where the expat family will retire is not always clear which makes retirement planning difficult, although there are some investments tips that can prepare for this and UK expats can always consider a QROPS scheme.

Trailing spouses

Many trailing spouses we talked with expressed a general lack of empowerment caused by a range of issues such as the inability to continue a personally and financially rewarding career, the fear of the breakdown of the marriage, or the complexity of managing the household in the host country. While these are not directly financial issues, they are issues that should be addressed in a wealth management plan to make sure financial resources are alleviating these issues rather than exacerbating them.


Going home can be as complex as moving abroad; even more so in some cases. The financial cost, ‘reverse culture shock‘, and difficulty of re-establishing an identity are sometimes more difficult than when moving abroad.

Finding advisors who understand

To manage wealth effectively, a network of experts and vendors is often needed to coordinate the major components of a wealth management plan. To do so abroad is even more important, but the supply of professionals who have a complete understanding of the expatriate financial experience is thin.  Not only is an accountant needed for home country tax compliance, but a resource that understands the tax implications of the host country as well. An estate planning attorney in the US can easily prepare documents in the state of domicile, but an understanding of the implications of having no domicile, custodial issues, probate issues and death tax can make estate planning like solving a Rubik’s Cube. Brokerage firms may not be proficient in serving the needs of their customers while they live abroad. Insurance companies may not understand the risks you face. Financial planning firms may have a full understanding of their clients at home, but they may not know what you need for living abroad, creating a hodgepodge of advice that creates a less than optimum wealth management plan.

A word about choosing financial advisors: In the US, attorneys and accountants are required to act as a fiduciary on behalf of the client (putting the client’s interests first). However, most of the financial industry is driven by the sale of financial products. We suggest finding a financial advisor who will act as a fiduciary and is only paid by the client (and does not accept commissions of any kind). We also suggest finding an advisor who is an expert in the country in which you live. This will create a pristine relationship between you and your advisor.

If your wealth is suspended between two cultures, seek to manage your financial resources as a whole, considering all aspects of your situation. Seek advisors who understand the expatriate experience, and if one is an expert in one component while another is an expert in another area, seek to have your panel of experts work together to coordinate the advice given to you.