Saving for children across multiple jurisdictions
International families often want to save for education, property or future financial support while living in a different country from the one where the child may eventually study or settle.
That can create questions around ownership, investment structure, tax, currency and future access.
Josh Clancey works alongside tax advisers, US CPAs, private-client lawyers and other professionals where a family's savings for children need to work across more than one jurisdiction.
The planning should start with the purpose of the money
A family may be saving for:
- university
- private education
- a first property
- postgraduate study
- future relocation
- general financial support
- long-term family wealth
The right structure depends on what the money is for, when it may be needed and where the family and child are likely to be living at that point.
A product that works well in one country may become inefficient if the family moves or the child studies elsewhere.
That is why the planning should begin with the objective rather than the account.
Common planning areas when saving for children internationally
Education funding
The expected cost, timing and likely country of study should shape the savings strategy.
529 plans
US-connected families may already hold a 529 plan or be considering one for future education costs.
Investment ownership
Savings may be held in a parent's name, a child's name, jointly or through another structure.
Each can have different tax and control implications.
Currency
Future education or property costs may be in a different currency from the family's current savings.
US-connected children
US citizenship or other US tax status can materially affect what investments are suitable.
Future mobility
The family's current residence may not be where the child ultimately studies, works or settles.
Questions to ask when families save for children across countries
What is the money actually for?
Education funding, a house deposit and general family wealth require different time horizons and levels of flexibility.
When is the money likely to be needed?
The investment strategy should reflect the expected date of use.
Where is the child likely to study or live?
That can affect currency, tax and product suitability.
Who should legally own the investment?
Parental ownership, child ownership and trust structures can produce different outcomes.
Does the child have US citizenship or another tax connection?
That can materially affect which investments are appropriate.
Is the family likely to move again?
Long-term products should be reviewed for portability and cross-border suitability.
How much control should the parents retain?
The desired age and circumstances for access should be considered before transferring ownership.
Useful resources for advisers working with international family savings
529 Plans for Families Abroad
A focused technical brief covering education savings where a US 529 plan is retained or used while the family lives internationally.
The Professional Adviser's Guide to Mixed US and Non-US Families
A broader guide where parents or children are subject to different tax systems.
US Citizens Holding Non-US Investments
A useful resource where a US-connected child or parent holds locally domiciled investments.
The Professional Adviser's Guide to Cross-Border Financial Planning
A wider guide to financial-planning decisions for internationally mobile families.
Client Moving Country Checklist
A practical checklist for reviewing savings and investment arrangements before an international relocation.
Cross-Border Referral Checklist
A practical resource for identifying where tax, legal or financial-planning input may be needed.
Ownership can be as important as investment performance
The same investment may have very different consequences depending on who owns it.
A family may hold savings:
- in a parent's name
- jointly
- in the child's name
- through a trust or other structure
- through a dedicated education account
Ownership can affect:
- control
- taxation
- reporting
- access
- gifting
- estate planning
- financial aid or education planning in some jurisdictions
The legal and tax advisers should establish the appropriate ownership structure.
Financial planning can then determine how the assets should be invested and funded.
Currency and time horizon should shape the investment strategy
A family saving for university in ten years has a different problem from one expecting to pay school fees next year.
The investment strategy should reflect:
- how long the money can remain invested
- the expected currency of future spending
- how certain the future liability is
- whether other assets are available
- the family's capacity for investment risk
As the date of use approaches, the family may want to reduce reliance on short-term market movements and large currency swings.
The objective is not to predict exchange rates.
It is to reduce the risk that the money is unavailable or materially lower in value when the child needs it.
When should the referral happen?
A referral can be useful where the family:
is saving for university in another country
has children with different citizenships
holds a US 529 plan
is moving internationally
wants to invest for a child over the long term
is unsure who should own the assets
expects future costs in another currency
wants to provide a substantial future gift
needs to coordinate children's savings with wider family wealth