Beyond Borders

Sophisticated clients who have built their lives entirely within the United States are increasingly asking a question their advisors haven't had to answer before: does concentrating an entire financial life within one country's legal and tax system still make sense? Andrejs Pilajevs, CFP®, MSFP, a senior wealth advisor at Cerity Partners, frames jurisdictional diversification as an extension of ordinary portfolio theory, the same logic that prevents over-concentration in a single stock applied to banking relationships, custody, residency, and legal structure. Pilajevs walks through real client scenarios, from a tech executive with concentrated company stock to a multinational family managing property and trusts across three countries, and the compliance obligations that come with diversifying abroad, including FBAR, Form 8938, and foreign trust reporting.

Key Takeaways

1. The federal estate and gift tax exemption has risen from $600,000 to $15 million, but Pilajevs notes it remains a likely target for future legislative change.
2. FBAR reporting applies once foreign financial accounts exceed $10,000 in aggregate; penalties range from $10,000 per year for non-willful violations to the greater of $100,000 or 50 percent of the account balance for willful ones.
3. The U.K.'s 2025 abolition of non-domiciled tax status and the Netherlands' 2021 Supreme Court ruling against its "Box 3" deemed-return system show that even stable, mature democracies change the rules on wealth retroactively.
4. A second passport's value for most U.S. families is optionality, not emigration: the ability to relocate quickly and secure residency rights if circumstances change.