If you are a Latin American family thinking about moving to the United States for business, investment, or a better quality of life, tax planning should be one of your top priorities. You have likely worked hard to build and protect your wealth. The last thing you want is to lose part of it to U.S. taxes just because you did not plan ahead.

Pre-immigration tax planning is a necessary step that can help you protect your legacy. Without proper planning, you could face tax problems that reduce the value of what you have built. Once you become a U.S. tax resident, your worldwide income and assets may be taxed. This includes income from your home country, foreign trusts, real estate abroad, and more.

At Saltiel Law Group, we know what works and what does not. We have years of experience helping high-net-worth Latin American families move, invest, and grow in the U.S. We understand the process and the risks. This guide will walk you through the most important things you need to know before making the move or investment.

U.S. Tax Implications for Foreign Trusts

Foreign trusts can be a great tool in Latin America for wealth protection, inheritance planning, or tax efficiency. But once a grantor or beneficiary becomes a U.S. tax resident, the IRS has very specific rules on how foreign trusts are taxed and reported.

Most Latin American families don’t realize that the U.S. considers some foreign trusts to be “grantor trusts,” which means the income of the trust is taxed directly to the grantor. Even worse, if you don’t report these correctly on IRS Forms 3520 and 3520-A, you could face steep penalties. In some cases, up to 35% of the gross value of distributions or contributions to the trust.

We’ve seen families with sophisticated estate structures walk into serious tax issues simply because they didn’t restructure or disclose their foreign trusts properly before becoming U.S. persons for tax purposes.

What to do before immigrating:

• Have your trusts reviewed by a U.S. international tax attorney.
• Consider converting or unwinding non-compliant structures.
• Understand what “control” means under U.S. tax law because it’s not always obvious.
  
• File the right forms from the start.

Common Mistakes in Cross-Border Estate Planning

Cross-border estate planning is more than just writing a will in your home country and hoping it applies in the U.S. Different countries have different inheritance laws, and U.S. rules occasionally don’t recognize foreign documents or arrangements.

Common mistakes we see include:

• Not updating wills to align with U.S. law.
• Assuming local powers of attorney or healthcare directives apply in the U.S.
• Leaving assets titled in a way that causes U.S. probate.
• Overlooking U.S. gift tax rules when transferring property.

Without proper planning, your heirs could face double taxation, court delays, or even lose access to inherited assets due to jurisdictional conflicts.

Best practices:

• Draft U.S.-compliant estate documents that reflect your new status.
• Align ownership of assets (especially real estate and bank accounts) to avoid probate.
• Create a U.S.-friendly structure for inheritance, especially if your children will remain abroad.

What Is Double Taxation? How to Avoid It

Double taxation can slowly reduce your income if you are not careful. This means you might have to pay taxes on the same income in both your home country and the U.S. This is a real risk, especially if your country does not have a tax treaty with the U.S.

For example, Brazil and the U.S. do not have a full tax treaty. This means there are no clear rules to avoid double taxation. The same is true for countries like Argentina, Colombia, and Peru.

So how do you protect yourself?

Strategies to reduce double taxation risk:

• Understand foreign tax credits and how they apply to your income.
• Time income realization before you become a U.S. tax resident.
• Consider legal entity restructuring (e.g., holding companies) that align with U.S. tax rules.
• Leverage tax treaties, if available, in countries like Chile, Mexico, and Venezuela.

We recommend mapping out all income sources with a qualified advisor before you immigrate. Once you are in the U.S., your flexibility shrinks.

U.S. Estate Tax for Non-Residents

Even if you are not a U.S. citizen or resident, if you hold U.S. assets at the time of death, your estate may be liable for U.S. estate tax. 

This includes:

• U.S. real estate
• U.S. stocks (even if held in a foreign brokerage)
• Business interests in U.S. entities

As a foreigner, you will only have a $60,000 exclusion towards federal estate tax; compare that to U.S. citizens and residents, who currently have an exclusion amount of over $13.99 million (as of 2025), and the difference is massive.

Solutions to consider:

• Hold U.S. assets through non-U.S. entities, such as foreign corporations.
• Explore insurance and trust-based planning to offset estate tax.
• Reposition assets to non-U.S. holdings before establishing residency.

Failing to plan can mean your heirs are hit with up to 40% in estate taxes.

International Business Reorganizations

If your Latin American family business plans to expand into the U.S., there are significant tax planning opportunities, but also risks. Moving too fast or structuring deals improperly can result in layered taxation in both countries.

Some typical issues we see:

• Without adequate planning, you could be triggering U.S. tax residency for your entire business group, resulting in unintended worldwide taxation for your business entire global income, not only for revenue generated within the U.S.

Proactive steps to take:

• Review the current corporate structure with a U.S. tax attorney.
• Consider setting up a U.S. subsidiary instead of migrating the parent entity.
• Optimize transfer pricing and intercompany agreements to avoid audits.
• Know your treaty benefits (if applicable) for business income.

A thoughtful reorganization plan can save millions in taxes and streamline operations across borders.

Probate in the U.S.

In the U.S., when someone dies owning assets in their name, those assets typically must go through probate, which is a court-supervised legal process. For international families, this process can be long, expensive, and public.

Probate laws vary by state, and in places like Florida or California, it can take up to a year or more. If your assets are spread across multiple states, it could involve multiple courts.

Avoid probate by:

• Using revocable living trusts
• Titling assets properly (e.g., joint tenancy or pay-on-death designations)
• Setting up LLCs or corporations to hold U.S. real estate
• Avoiding direct ownership of U.S. assets by foreign individuals

By planning ahead, you not only avoid court but also give your family peace of mind.

Investing in the U.S. (Capital Markets and Real Estate)

If you’re looking to invest in the U.S., you’re not alone. Many LATAM families are drawn to the security and opportunity of U.S. real estate and capital markets.

But the U.S. tax system can be unfriendly to foreign investors who aren’t prepared.

Here’s what to watch for:

• U.S. capital gains tax applies when you sell real estate.
• FIRPTA requires a 15% withholding over the sale price (i.e., not over the gain – beware the withholding also applies if selling at a loss) on the sale of U.S. real estate by foreigners.
• Dividend income from U.S. stocks is typically taxed at 30%, unless reduced by treaty.
• Rental income is taxed differently depending on whether you make an election to treat it as effectively connected income (ECI).

Structuring tips for LATAM investors:

• Use foreign corporations or U.S. LLCs to hold investments.
• Set up tax-efficient ownership and exit strategies.
• Consult with advisors on withholding tax planning.
• Build a diversified portfolio that factors in currency and legal exposure.

The key to smart U.S. investing is not just picking the right assets, but owning them the right way.

Ready to Move to or Invest in the U.S.? Here’s How Saltiel Law Group Can Help You Do It Right

If you’re thinking about relocating to the United States or investing in U.S. real estate, capital markets, or business ventures, don’t take chances with your wealth. You need a legal team that understands both the U.S. tax system and the unique financial realities of LATAM families like yours.

At Saltiel Law Group, we help you plan before you step foot in the U.S. Our pre-immigration tax planning services are designed to:

• Identify tax risks before they become costly mistakes
• Restructure your assets and trusts to stay compliant
• Avoid double taxation between your home country and the U.S.
• Preserve your legacy through smart cross-border estate planning
• Set up your U.S. investments for long-term tax efficiency
• Help your family business expand into the U.S. without overpaying taxes

You don’t have to figure this out on your own. From the first call, we bring clarity to complex decisions so you can move forward with confidence.

Contact Saltiel Law Group today at 305.735.6565 to speak with our international tax planning team.