Cross-border and expatriate planning questions we hear most often.

US persons with foreign financial accounts exceeding $10,000 in aggregate at any point in the calendar year must file an FBAR (FinCEN Form 114) annually. This reporting obligation exists regardless of whether the accounts appear in your estate plan, and failure to file carries substantial civil and, in some cases, criminal penalties.

The FBAR is filed electronically with FinCEN by April 15, with an automatic extension to October 15. The threshold is $10,000 in aggregate across all foreign accounts, not per account. FATCA (Form 8938) requires additional reporting for specified foreign financial assets above thresholds that vary by filing status and residence. These reporting obligations do not create estate planning documents on their own, but they affect how foreign assets should be owned and transferred. If you have unreported foreign accounts, consult a tax attorney about voluntary disclosure options before pursuing estate planning that would further organize those assets.

FATCA (the Foreign Account Tax Compliance Act) requires US persons to report specified foreign financial assets on Form 8938 if they exceed filing thresholds that vary by residence and filing status. FATCA applies to assets held directly and to interests in foreign entities. It operates alongside, not instead of, the FBAR requirement.

FATCA thresholds are higher than FBAR thresholds. For a US resident filing a joint return, FATCA reporting applies when the total value of specified foreign financial assets exceeds $100,000 on the last day of the tax year or $150,000 at any point during the year. For single filers living abroad, higher thresholds apply. An estate plan that involves holding assets in foreign accounts or foreign entities must be designed with these reporting implications in mind. Edison Legal advises on the estate planning structures and works alongside your tax counsel on the annual reporting obligations.

The penalty for a non-willful FBAR violation is up to $10,000 per violation per year. For willful violations, the penalty can reach the greater of $100,000 or 50 percent of the account balance per year, and criminal prosecution is possible. These penalties can exceed the value of the unreported account.

The IRS has operated several voluntary disclosure programs over the years for taxpayers with unreported foreign accounts. The terms of available programs change, and a tax attorney should evaluate the current options before any disclosure is made. An estate plan that includes foreign assets should account for FBAR compliance from the outset. If you discover that you have unreported foreign accounts while planning your estate, the first call should be to a tax attorney experienced in international compliance, who can assess your exposure and the disclosure options available.

An expatriate estate plan is designed for US citizens or green card holders living outside the United States. Because US citizens owe US federal estate tax on their worldwide assets regardless of where they live, an expatriate plan must address US estate tax exposure, foreign asset reporting obligations, and how the country of residence's inheritance laws interact with the US plan.

Key issues in expatriate planning include which assets are subject to US estate tax (all worldwide assets for US citizens; generally US-sited assets for non-citizen green card holders), whether a tax treaty between the US and the country of residence reduces that exposure, how a US will is enforced in the country of residence, and whether a US power of attorney is accepted by local financial institutions. For US citizens retiring to Mexico, the planning spans both countries and requires US and Mexican attorneys working from a shared understanding of the overall plan.

A Texas trust can describe Mexican assets within the trust document, but a Texas trust does not have automatic legal effect over Mexican real estate. Mexican property requires Mexican legal mechanisms to transfer at death, and a separately retained Mexican attorney must address that side of the plan.

The practical coordination challenge: a Texas revocable trust may be designed to receive all of a person's assets at death, but Mexican real estate held in a fideicomiso passes according to the fideicomiso beneficiary designation, not the US trust. Aligning the US trust with the fideicomiso requires updating the fideicomiso's beneficiary designation and, in some cases, restructuring how the Mexican property is held. Edison Legal designs the US trust to account for that coordination and identifies what the Mexican attorney needs to address to make both sides work together.

Dual US-Mexico citizens are subject to US federal estate and income tax on their worldwide assets as US citizens, and also to Mexican inheritance law for Mexican assets as Mexican citizens. An estate plan that accounts for both sides of citizenship prevents conflicts between the two legal systems at death.

For a dual citizen based in Houston with assets in both countries, the US estate plan handles the US-sited assets and the overall tax planning framework. A Mexican attorney handles the Mexican succession instruments. The two plans should be coordinated so a beneficiary does not have to navigate conflicting instructions from a US will and a Mexican succession document that address the same assets differently. Edison Legal handles the US side of that coordination.

Retiring across the US-Mexico border requires planning for both jurisdictions before you relocate. On the US side: updating your will and powers of attorney to reflect your new residence, reviewing beneficiary designations on US financial accounts, and confirming your FBAR and FATCA compliance for any foreign accounts you open. On the Mexico side: engaging a Mexican attorney for the residency and property issues.

US citizens who retire to Mexico retain their full US estate tax and income tax obligations. Your US estate plan should be reviewed and updated before the move, not after. Key US-side questions include: Does your current power of attorney work in Mexico if you become incapacitated there? Are your US financial institutions willing to follow instructions from an agent acting under a US power of attorney while you are in Mexico? Does your US will address Mexican assets adequately, and have you coordinated the fideicomiso beneficiary designations with your overall plan? Edison Legal addresses the US planning layer; a Mexican attorney addresses the residency and Mexico-side property questions.