International Tax Planning for Marriage, Divorce, and Inheritance

Arielle Tucker (00:01.932)

Welcome back to Passport to Wealth. The US government just created a new child savings account with a $1,000 federal and seed deposit for eligible American babies born between 2025 and 2028? That sounds great until you're raising a child abroad and start wondering: does this actually apply to us? We all love free money, right? Can a US citizen child born outside the United States qualify? Can parents with a foreign address open the account? And how does this compare to other accounts that may be available to you?

Today, Christy Deschateau of BNC Tax joins me to break down what US expat parents need to know before Trump accounts are open. Christy, thank you so much for joining us today.

Christie DuChateau (00:51.5)

Hi, thanks. Thanks for having me.

Arielle Tucker (00:54.038)

Okay, so I am so excited to talk about Trump accounts. These just went into effect. There's been a lot of talk coming up in coming up to July 4th. We're talking on July 13th. So we've had now enough time to both kind of go on, log in, play around, see what our clients are doing, see what other people are are hearing and asking of us to know that okay, you can actually open up these accounts. So we're gonna talk about all of that. I also have some

screen screen shares and screen grabs that we're gonna pull up during this interview. So if you're watching this on video, you're actually gonna be able to see what the process to open up the account looks like if you're doing it on your phone. So I'm gonna show you all of that as we're talking along about Trump accounts today. So Christy, let's start off strong. What exactly is a Trump account?

Christie DuChateau (01:45.954)

Great. So yeah, so in plain English, a Trump account is a special type of traditional IRA that's available to a child under 18 years old. And, you know, for those who can't get past the name, while there's a historic precedence for politicians naming special legislation after themselves, I know we get a little tired of hearing the Trump name since we get to hear it so much. you can also call the account a 530A.

The 530A account is the special legislation that was created to allow this account type to go forward. So we can call it a Trump account, we could call it a 530A account, but it's the same thing. It's a traditional IRA available to a child under 18.

Arielle Tucker (02:31.968)

Okay, great. thank you for explaining that. Can you talk to us about the free money that everyone wants to know about? We're all here for the free money. So there is a thousand dollar seed deposit. One where is that coming from and who is actually eligible for this money?

Christie DuChateau (02:48.917)

Yeah, the $1,000 seed deposit is probably the most attractive thing about the Trump account. So it's coming from the Treasury. It was allocated during the One Big Beautiful Bill Act that was passed July 4th, 2025. And so that's why we're getting it now July 4th, 2026, one year later. It is for any child who is born between January 1st, 2025 and December 31st, 2028. And

Originally they talked about it being an automatic deposit into one of these special Trump accounts, but the Treasury decided that wasn't practical. So what you have to do now to be able to claim it is to file a certain form, which is called 4547, and that will allow you to get the $1,000 deposit. But the only children who are actually eligible for that deposit are US citizens. So even if you know, under different types of accounts,

There are some types of accounts that you can get even if you're not a US citizen. But for this specific $1,000 seed deposit, you must be a US citizen. And you have to be born between that time period, January 1st, 2025 to December 31st, 2028.

Arielle Tucker (04:04.14)

And I've also heard there's some other corporate matching available. So you may actually be able to get more money in that account depending on when your child was born and what zip code you live in. Now, that likely does not apply to anyone that we're talking about today, which are American citizens, US citizens abroad, because they're not gonna have a US zip code. So therefore they're not going to be eligible for that secondary deposit if if that does actually apply to them.

Christie DuChateau (04:20.161)

Mm.

Christie DuChateau (04:31.465)

It's true, and it's one of the open questions that I have because I probably, like many tax advisors, have some clients who are still using a US address, even if it's just a care of address for convenience. So I'm curious how the treasury is going to deal with that because a lot of this stems from the address that you actually have on file with the IRS right now. And there are corporations that are funding this. There's special requirements for that. So a lot of it is going to go towards low-income families in certain zip codes. So

It's great if you get a match, but it's there's nothing you can really do to prompt or receive that match on your own.

Arielle Tucker (05:08.366)

Okay, so let's talk through what it actually looks like to open one of these accounts. What is the process?

Christie DuChateau (05:16.619)

There's a couple of ways to do it. And if you're abroad, you probably have to do the more complicated route. But if you are a US person with a US telephone, you can download the app. And it's called the Trump Account app. It's available on the App Store. It is not available on the in on certain foreign app stores. So for example, I wasn't able to get it because my phone is tied to a Netherlands Apple account and that app doesn't exist.

So if you don't have yeah, go ahead.

Arielle Tucker (05:46.669)

Okay, so weird. I'm gonna interrupt you because it's so interesting that it wasn't available on your app store. I actually also opened these accounts leading up to these interview this interview, and I was able to get it even though I have a Swiss phone number. So what I did was I just logged into I have two Apple accounts. I have like a a my a US-based Apple account from

Christie DuChateau (06:08.075)

Mm-hmm.

Arielle Tucker (06:12.694)

when I was in college, and then I have a Swiss Apple account. And I can toggle between those two. And I know a lot of people do that because they may have certain apps that they want to get off the US store versus like the foreign store. So if you still have that ability to do that, you can actually download the app and you could use your foreign phone number. So to verify my account, I put in my Swiss phone number and I got the text messages to my Swiss phone number confirming my account, which I

Christie DuChateau (06:18.987)

The who?

Arielle Tucker (06:42.608)

was shocked by. I was shocked that that worked.

Christie DuChateau (06:43.989)

Yeah. Yeah. In in some ways, some of this seems very expat friendly. And in other ways, it's a bit confusing or gray. So I don't have that ability to toggle. I've never set that up, but it's a good tip. so in my case, I I didn't, I wasn't able to get the app because of the foreign. It's not on the foreign, at least not on my i Apple store. but you can get it another way. If you go to trumpaccounts.gov, you can create an account online on your computer there.

Arielle Tucker (07:14.486)

Okay. And do you are you do have to create one account per child or do you just create one like parent account and then you have multiple children underneath that parent?

Christie DuChateau (07:25.781)

You at least on the web version, you create one parent account and you toggle between the two children's accounts. There's a drop-down that you can toggle between your children's account and it actually even walks you through the process quite simply where it's you add one dependent and then you can add another dependent. In my experience, and I'm sorry I didn't take any screen grabs, that would have been a good idea, but on the web version, the when I went to sign in to the Trump account, it pre-filled my information.

from my most recent tax return, including the children's names. it did not include the children's addresses, which I thought was a little bit strange. I had to fill those in myself. And it did not allow me to use a foreign address for my children. So even though on the main page when I created an adult account, like a a a login, it pre-filled my foreign address and allowed me to use that. Once we got to the step with the children, I couldn't move past until I had a

US ty five digit zip code.

Arielle Tucker (08:28.204)

Okay, this is so interesting. I'm so glad that you did it on the web version and I did it on the we didn't even plan this, like I did it online, on the app. I was shocked when I went through

Christie DuChateau (08:34.559)

Ha ha ha.

Arielle Tucker (08:39.806)

I had to complete, I had to enter my address, right? So our Swiss address is is on files, our last address. It did not pull any of the information. I entered our Swiss address, and then it asked me question, is the children's address the same with like a little checkbox? I checked yes, and then it pre-filled the address for the kids with my Swiss address.

Christie DuChateau (08:54.219)

Mm-hmm.

Christie DuChateau (08:59.733)

Wow. So it sounds like the for at least for expats, it sounds like the app version is better if you can get the app on the US Apple or or put I assume the Google store would be the same. and then have it pre-filled with the foreign information, you might be able to bypass some of these issues. Did you also have to do login with ID me?

Arielle Tucker (09:22.122)

No, I didn't. And I ID me is a way, like basically a secure way for you to access your IRS.gov account, your social security dot gov account. It's a second like verification.

So I have set that up before. I tell all of our clients to set that up because it is a bit of a lift to get it set up. But once you have it set up, it gets you access to US government websites rather easily without having to worry about having a US phone number, which is a big headache for a lot of US expats. But it didn't ask me for anything with my ID.me. I did it all through the app and I was I was

Honestly shocked at how easy it was. It was very user-friendly. And I was thinking, wow, this is easier. I don't know you have 529 accounts for your kids or if you back in the day we had the Coverdell accounts were really popular. I had set all of those up myself years ago for our children. Nothing has been this simple. So I will I will give credit where credit is due. And the process for me on the app was so simple. I'm kind of left left like speechless at how how great it.

it has worked so far. Now, that being said, you are one step ahead of me. I finished getting my account set up this weekend. I still actually have to make the contribution. You and your clients have already made the contribution. So why don't you talk us through what that process looked like.

Christie DuChateau (10:47.595)

Yeah, so once we get through the registration process, then then there was a link to Robinhood. And the account basically brought us to a Robin Hood account because BNY has been chosen as the

Christie DuChateau (11:11.383)

Custodian, I think, but then BNI allows the account or BNY allows the account to be managed by Robinhood. So those are the chosen platforms so far. So what happened was the Robinhood is the actual account, you know, that holds the money. And when you go to make a deposit, it brings you to a Robin Hood account.

Arielle Tucker (11:11.714)

The custodian? Yeah.

Christie DuChateau (11:36.702)

You can make the contribution through the Robin Hood account. At least that's how it works on the online platform. I'm so curious how it works on the app. And the contribution required a connection to a US bank account to make the contribution. So you had to be able to transfer money in from a US bank account. And then once that contribution was made, I think it took about a day or two before you were before we were eligible to actually buy something.

But the the money there's only one option available and it's the SP I'm just looking now because it's S P Y actually on the Robin Hood account. So the Robin Hood version allows you to to invest only in the SPYM, which is an S and

Arielle Tucker (12:15.423)

S P.

Arielle Tucker (12:26.446)

did I just lose your audio?

Arielle Tucker (12:58.048)

I can hear something.

Christie DuChateau (13:01.303)

Can you hear me? Okay, sorry about that. I'm gonna have to start over.

Arielle Tucker (13:02.284)

I can hear you. Yep, you're back. Okay. I'm gonna I'm gonna clap a bunch so the editor knows and then just go back to answering what just say the it's it's a spy State Street S P okay okay, clapping editor Marwan.

Christie DuChateau (13:15.168)

Okay.

Christie DuChateau (13:21.195)

The only account available to actually buy inside of the platform is SPYM, which is a State Street S P five hundred index.

Arielle Tucker (13:31.555)

Yeah. And this is a you know, a broadly diverse, it's it tracks S P five hundred, it's an ETF, right? So it's one fund that holds

Hundreds of companies, right, all that have exposure to the US market. So that's also a consideration. Another thing that I am impressed with by picking this one fund, the expense ratio is 0.02%, which is incredibly low. And when we're talking to our clients about investing long-term, building wealth, right? If you've read any books on investing, you know that fees will eat into your returns. So

I was quite happy to see that this fund is like such a low expense ratio. I think that's really important, especially when we're talking about kids with their first, you know, couple thousand dollars. It doesn't need to be complex. It doesn't need to be expensive. To me, this was a great choice.

Christie DuChateau (14:28.639)

Yeah, you know what? This is actually one of the things that's baked into the legislation because it the legislation requires that these investments be held in US mutual funds or ETFs that are tracking a broad index of primarily US equities, and they have to have their fees capped at 0.1%. So this was actually a great choice for the legislation.

People, you know, one of the questions that I hear people ask a lot is, is this just some sl kind of slush fund or funnel to Trump's favorite corporations? And in this case, we can definitively say that it is not. This is really a broad index that President Trump does not have any control over. It's it's funded through State Street and their investments.

Arielle Tucker (15:10.648)

Well, not to make this political, this is not a political conversation, but I was reading an article that President Trump had invested in Robin Hood leading up to selecting the custodian. So I don't know if it's a if it's a hundred percent a clean deal and that no interests were misaligned. But again, I think Robinhood has made their their case in the US market as being a low-cost custodian, especially for early investors. So that

it fits really well with this you know, serving kids under eighteen. And then of course, looking at this low cost ETF again, I think it's a great choice. And when I log in, it really is almost like logging in, like if you had like an online Robin Hood account. If you ever did that years ago I had one in college. That's kind of what it feels like when I'm on my phone. It's like you're just kind of logging into like the app and it feels as clean as like what it

Christie DuChateau (15:56.343)

Mm-hmm.

Arielle Tucker (16:07.906)

you know, what you would expect from a large US company, a financial services company to be providing you with an app. Great service. So I'm I'm initially excited about it. but let's go to like some of the other considerations for families who are living abroad. So it sounds like either you can maybe get access to the app or you can go and you can you can f complete the form online. That's great. You can get the account opened. You have to have a US bank account

Very quickly for US bank accounts. I know that there are some US expats that have not kept any open bank accounts. And if that's the case, there's a couple workarounds that you can try. You can open up a State Department Federal Credit Union account. That account always allows Americans abroad with foreign addresses to open up an account and that is a US account. You can also work with like an online currency exchange platform like WISE or Revolute.

something like that where you can actually get a US account number and make the transfer that way. So even if that account is held in Belgium, they're routing through their New York branch to be able to provide you with that US bank account and routing number so that you can make that deposit. So there are workarounds if you if this is important to you. Now, here's what I'm hearing from a lot of people, but should you actually make this contribution? And to me what's

The most interesting is the fact that these are kind of coded as IRA accounts for kids. And I'm wondering if that means there is potentially more tax protection for for these accounts in our treaties with other countries. And I'm sure you have thoughts on this, so I'm going to just open the floor up to you.

Christie DuChateau (17:51.224)

Okay, so I think what's helpful is to consider the entire tax picture, and you really must consider your personal tax picture when deciding if it makes sense to fund this. My first level of decision making with my clients is does the thousand dollar seed money apply to you? Because we can really not argue with free money. If you're able to get it and you're eligible for it, and by the way, I didn't mention this when we were talking about who's eligible, but you must, the child must have a

Social Security number. So if you have an American citizen child born abroad, but you've never got a US social security number for the child, that child will not be eligible for the seed money. So assuming you're eligible, assuming you're able to activate the account, to be the thousand dollar seed money is kind of a no-brainer. like Ariel mentioned, there's it's a very low-fee account. You can put that money in an investment and you can just never touch it again, and you'll have gotten your thousand dollars.

For the rest, I like to think about what are the alternatives because as we are parents investing in our children's future, grandparents, friends, family, there's a lot of choice out there already. So why is a Trump account better than any of the other choices? And it isn't necessarily. It's really about the trade-offs and about what fits best with your family and your the future plans for your family.

So the options that already exist are a custodial account, which is just a regular brokerage account for minors, sometimes called a UTMA account. And in that type of an account, no earned incomes needed. Children can fund it. Parents can fund it if the children are under 18. You can buy anything. So your investment choice is much broader. When the children take money out of that account at some point in adulthood,

It's subject to the lower capital gains tax bracket. So that's already a really strong choice. But the growth is not tax deferred. It's taxed annually, potentially under kidney tax rules. Another alternative is a Roth IRA for kids. This is another really great tax deferred account because the contributions are post-tax, but the growth is tax-free forever. So all withdrawals are tax-free.

Christie DuChateau (20:12.331)

There's no, you know, $1,000 seed deposit with that. And the big sticking point is that the child itself needs to have earned income to be able to contribute to a Roth IRA. That's very different from a Trump account. The other big alternative is a 529 account, which does not require any earned income. The growth is never taxed as long as it's qualified. So the withdrawals are tax-free. Sometimes there can be free money that goes into it.

In some certain cases, there's certain kinds of seed deposits or deposits that can be tax free for the children. But the qualifier is that 529 money has to be used for education. And I'll talk about what can happen to these accounts later, a little after. So those are kind of our our alternatives. So where does a Trump account fit in?

The Trump account's big selling point is that there is no earned income requirement for the child under 18 years old. So basically, you start funding a retirement account for a child that does not have any earned income. The growth is tax deferred. So when the child does take a distribution from the account, presumably in retirement, so you know, some 60, 70 years from now, all of that growth, there's been a huge time period of growth that has not

Been eaten into by having to pay tax during the contribution or the growth phase. But the distributions are going to be taxed at ordinary income rates. So if you expect your child to be in the top income tax bracket someday in retirement, that's much higher than the long-term capital gains tax rate of 15%, let's say. At current tax rates, you could be taxed up to 37%, but you have a very long trajectory of growth in between.

And of course the biggest benefit is the thousand dollar seed deposit. And I actually really like that there's little choice in the index funds because of that low fee. You don't have to go investigating what you're gonna buy. You don't really even need to rebalance your account or do anything with the account. So this is really a set it and forget it type of account. So under that framing, who is this best for?

Christie DuChateau (22:30.485)

I do think that especially for as expats, we do need to consider our home country and what the tax rules are going to look like. I'm in the Netherlands, which we've talked, I know you've had guests talk on your podcast before about the wealth tax implications. And this is where there's still a lot of open questions and where it gets really interesting for a planning opportunity.

some of the Dutch tax advisors that I've talked to have said that this should not be taxed in wealth tax because it is essentially a traditional IRA. There are massive restrictions. You cannot take the money out before retirement without be it being subject to penalty. So under that logic, this would make sense in a country like the Netherlands where we want to protect money from the wealth tax that cuts into our growth.

And the other consideration that might apply in other countries where expats are living is that it's very hard to invest for retirement when you're abroad. So your foreign pensions are generally problematic from a US tax perspective. So this gives an American citizen living abroad an opportunity to participate in the retirement market in a way that they might not actually be able to in the country that they live because of all of the

undue burden that the IRS puts on foreign retirements.

Arielle Tucker (23:57.667)

Yeah, thank you for sharing all all of those points. I want to kind of build on a couple other points that I've been thinking about as well. so one,

The custodial accounts, the UTMA accounts that you talked about, again, I think those are great, but they fall under state law. So especially when we're talking about those babies that have been born 2025 to 2028, you're abroad. Likely you're not going to be able to open up those new accounts. So if you don't have existing Utma accounts set up for your children, you might not be able to access new ones. Maybe a pa a grandparent or an aunt or uncle or close friend could do that on your beh your

Christie DuChateau (24:12.769)

Mm-hmm.

Arielle Tucker (24:35.593)

behalf or on your child's behalf, but you actually can't.

Christie DuChateau (24:39.382)

Mm-hmm.

Arielle Tucker (24:39.82)

And when we talk about Europe, we're also talking about the MiFID regulations. So unless you're working with a professional like a financial advisor who's able to buy US ETFs or mutual funds on your behalf, you yourself are likely not going to be able to just open up this account and then buy US ETFs and hold them in that account, right? Same with the 529 accounts. They're also under state law. There are state tax benefits. But again, if you're not a state resident, you're not getting those.

Christie DuChateau (25:00.428)

Yeah.

Arielle Tucker (25:09.804)

Benefits. So again, we're bringing in a grandparent who's maybe holding those funds. Having grandparents who are US-based hold those funds, I like that for a number of reasons, right? We're not dragging the money, you know, abroad and trying to figure out how is this country going to tax this money. I like all of those things for that. but I think it is still very unique that a US citizen child.

can buy a US ETF abroad. That is very unique, especially when we're talking about Europe. Other countries, we don't have the same regulation, we don't have the same considerations. So maybe you're like, I can already access you know USD U USD ETFs. What are you talking about? In Europe, it's very difficult. We just did a a a podcast with Blair in Austin talking about investing in Germany when you're just getting started and we were talking about how to buy and sell shorts.

Christie DuChateau (25:41.003)

Mm-hmm.

Arielle Tucker (26:04.642)

Right, as like workarounds. So it's just important to understand like those restrictions are really a weight on Americans abroad still.

Christie DuChateau (26:12.287)

Yeah, it's such a good point. And it's again a reason why you have to look at what is your family's situation and whether this fits well into that planning opportunity. I'll give an example of my own situation. I live abroad, but so do my parents. So we don't even have the option of a grandparent to open a 529 or a UTMA account. my kids are two, are three and five, so they don't work yet. We can't do the Roth account. So for us.

Arielle Tucker (26:27.886)

Mm.

Arielle Tucker (26:39.394)

Come on, you can't get them in the office, you can't get them at BNC doing some accounting.

Christie DuChateau (26:43.696)

When I when I was five years old, I was sorting checks in my mom's office. So I'm, you know, we don't have that kind of physical labor these days, but maybe. But in any case, in our situation, it did make sense to do the Trump account, especially given what I can think about the box three. and what's also nice is that you don't have to do this every year. This is one of those optional things. So you can take the seed money and then leave it alone. You can fund it in years that make sense.

You don't have to fund it if it doesn't make sense for you. I do still have an open question about how exactly it is that Robinhood is allowing European residents to buy the ETFs. So, you know, I don't know how they are getting around this. And I don't know if they're going to at some point say, oops, looks like you have a foreign address. We're no longer gonna allow you to invest in this account. But it appears to be available at the moment.

Arielle Tucker (27:23.83)

Yes, same.

Arielle Tucker (27:39.725)

Yeah.

Christie DuChateau (27:39.893)

And by the way, it's not illegal in right, and maybe you can explain this better than I can. It's not illegal from a taxpayer point of view. It is the responsibility of the financial institution to determine where the person is is a resident.

Arielle Tucker (27:54.317)

Yes.

Arielle Tucker (27:58.222)

Exactly. thank you so much for coming on and sharing this. I think the other big takeaway I have in our last moment here is these accounts just came into effect July 4th, 2026, which means you don't need to figure this all out right now. You have until the end of the year to make your contribution. So it's okay to take some time, make sure you understand the process, talk to your accountant, talk to your financial planner, make sure it's actually a good fit for you.

Make sure you understand, are there any local considerations that are gonna impact my decision, right? Where do I live and how is my local country going to view this account? Because if they're going to tax it punitively, maybe you don't even want to deal with it. So take the time, do your research, talk to your professional team, and go from there. Christy, thank you so much for joining me on this. I really appreciate you coming in and getting this episode out so quickly for our listeners.

Christie DuChateau (28:52.053)

It's great to talk to you again and I can't wait to hear more feedback about how these go more broadly.

Arielle Tucker (28:57.391)

Okay, thank you. Bye.

Christie DuChateau (28:59.042)

Bye.