There’s no doubt that life insurance is an invaluable estate planning tool, but there are some common mistakes that Mexico residents often make when purchasing policies in the United States. If you don’t plan ahead, it’s possible that your policy won’t provide your loved ones with the inheritance they deserve.
In our complimentary whitepaper, How Should Mexico Residents Hold Life Insurance Policies in the United States?, we explain that the U.S. tax code exempts policies from income and inheritance tax in the U.S. if the policy is issued by an American insurer and the owners are insured Mexicans. However, Mexico’s tax code indicates beneficiaries of U.S. life insurance policies may be subject to income tax when they live in Mexico.
To work around these limitations, trusts can be used to characterize the death benefit as an inheritance. Our whitepaper explores revocable and irrevocable trust options that can be used to limit tax liability.
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If you’d like to learn more about your options for purchasing and holding life insurance policies in the United States, simply complete the request form to receive your complimentary whitepaper. If you have additional questions about the best way to reach your estate planning goals, call our toll-free number at (800) 694-6604 to learn how we can be of assistance.