Mixed US & non-US couple
A couple can share the same financial objectives while being subject to very different tax systems.
Where one spouse is a US citizen or otherwise a US taxpayer and the other is not, investment ownership, retirement accounts, gifts, estate planning and beneficiary arrangements can all require additional care.
Josh Clancey works alongside US CPAs, tax advisers, estate-planning attorneys and other professionals where a mixed US and non-US couple needs a coordinated cross-border financial plan.
The household should be planned together, but the tax analysis may need to be individual
A US citizen or resident alien can remain subject to US tax on worldwide income even while living abroad.
The non-US spouse may not be subject to the same US tax regime.
That can create important differences around:
- investment ownership
- non-US funds
- joint accounts
- retirement accounts
- gifts between spouses
- estate planning
- foreign-account reporting
- trusts
- beneficiary arrangements
- future residence
The objective should not be to treat the spouses as two unrelated clients.
It is to build one family plan while recognising that the tax treatment of each person may differ.
Common planning areas for mixed US and non-US couples
Investment ownership
An investment that is efficient for the non-US spouse may be problematic for the US-connected spouse.
Ownership can therefore materially affect the household's overall position.
PFIC exposure
Locally held mutual funds or collective investments may create PFIC issues if owned by the US-connected spouse.
Gifts between spouses
US gift-tax treatment can differ where property is transferred to a spouse who is not a US citizen.
For 2026, the IRS annual exclusion for qualifying gifts to a non-US-citizen spouse is $194,000.
Retirement accounts
401(k)s, IRAs, Roth IRAs and pensions may have different beneficiary and tax consequences depending on which spouse owns the account.
Joint accounts
Jointly owned non-US financial accounts can create reporting obligations for the US-connected spouse.
For FBAR purposes, each joint owner is generally treated as having a financial interest in the whole account, subject to the specific spouse-filing exception.
Estate and beneficiary planning
Different citizenships can affect estate planning, gifts, inheritance and the way assets pass between spouses.
Questions to ask when one spouse is US connected
Which spouse is the US taxpayer?
Citizenship, Green Card status and residence should be established before investment planning begins.
Who owns the existing investments?
Ownership can materially affect US tax and reporting treatment.
Are any non-US pooled investments held by the US spouse?
That may require PFIC analysis.
Are the couple's accounts joint or individually owned?
Joint ownership can create US reporting consequences even where the funds are primarily associated with the non-US spouse.
Are significant gifts being made between spouses?
The US tax adviser should confirm whether gift-tax reporting or limits are relevant.
What retirement accounts does each spouse hold?
Pensions, 401(k)s, IRAs and other retirement assets should be considered individually and at household level.
Where do the couple expect to live long term?
Future residence can affect tax, custody, estate planning and investment structure.
Useful resources for advisers working with mixed US and non-US couples
The Professional Adviser's Guide to Mixed US and Non-US Families
A broad guide to investment, retirement, estate and beneficiary issues affecting families subject to more than one tax system.
The Professional Adviser's Guide to US-Connected Clients
A wider guide to financial planning for US citizens, Green Card holders and internationally mobile families.
US Citizens Holding Non-US Investments
A focused technical brief covering the investment issues that can arise for US taxpayers living abroad.
PFIC Exposure: What Professional Advisers Need to Recognise
A technical resource covering the circumstances in which non-US pooled investments may create US tax complications.
US Retirement Accounts and Non-US Beneficiaries
A practitioner-focused resource covering beneficiary-planning issues where US retirement assets pass to internationally resident or non-US beneficiaries.
US-Connected Client Red Flag Checklist
A practical checklist for identifying investment, tax, estate and retirement-account issues requiring coordination.
Ownership matters more in a mixed-status household
A mixed US and non-US couple should not assume that identical ownership produces identical tax outcomes.
For example, a local investment account held by the non-US spouse may have very different US implications from the same account held by the US-connected spouse.
Similarly, joint ownership may expose an account to US information-reporting requirements.
US citizens and resident aliens abroad remain generally subject to US tax on worldwide income and can also have foreign-asset and foreign-account reporting obligations. IRS
This does not mean assets should automatically be shifted to the non-US spouse.
Ownership changes can themselves create tax, legal, matrimonial or estate consequences.
The correct sequence is:
- establish the legal ownership
- establish the US and local tax treatment
- consider estate and family-law implications where relevant
- then determine whether changing ownership actually improves the household's position
Gifts and inheritance between spouses need separate analysis
US tax law does not treat all transfers between spouses in the same way.
For gifts to a spouse who is not a US citizen, the usual unlimited gift-tax marital deduction is restricted, although a larger annual exclusion is available for qualifying gifts.
For 2026, that annual exclusion is $194,000.
Estate planning can also require specialist analysis where one spouse is not a US citizen.
The relevant US estate-planning attorney and tax adviser should establish:
- gift-tax treatment
- reporting
- estate-tax consequences
- appropriate ownership
- beneficiary structures
- whether specialist structures are required
Josh can then ensure pensions, investments, protection and liquidity reflect that advice.
When should the referral happen?
A referral can be useful where:
one spouse is a US citizen and the other is not
the couple holds non-US investments
the US spouse has PFIC exposure
substantial assets are jointly owned
one spouse is considering transferring assets to the other
the family has US retirement accounts
beneficiaries have different citizenships
the couple is moving country
estate planning spans the US and another jurisdiction