The Hidden Risks of Keeping Your U.S. Accounts While Living in Israel
You’re sipping coffee in Tel Aviv, enjoying the view when an email from your U.S. brokerage hits your inbox. The subject line? “Important update for international clients.” You click it… and just like that, your account’s on the chopping block. No warning. No phone call. Just a countdown clock and a rising wave of stress.
If this sounds like a nightmare, you’re not imagining things. It’s a growing problem for Americans living in Israel who still have U.S. brokerage or IRA accounts. The markets may be the same, but the rules have changed—and not in your favor.
When “set it and forget it” backfires
Plenty of people keep their old U.S. accounts after making aliya. It feels easy, familiar, and besides—who wants to deal with paperwork during a cross-continental move?
But that “I’ll sort it out later” approach? It can backfire. Big time.
Brokerages are dropping non-U.S. residents more often than you’d think. I’ve spoken with folks who had strong, long-term relationships with their brokers… until one day, a letter arrived saying, “Sorry, we can’t serve you anymore.” One person I helped had nearly $600,000 in his IRA. He was told to transfer his account out within 30 days. That’s not a gentle nudge; it’s a financial earthquake.
Cross-border couples, double the trouble
Now let’s add another layer: what if your spouse isn’t a U.S. citizen?
You might think you’re covered. The account is in your name, you’ve kept it active, and things seem fine until something happens. And suddenly, your spouse can’t access the funds. The account gets frozen. The tax rules change. The estate plan unravels. I’ve seen it happen and it’s not pretty.
Worse, the U.S. doesn’t offer the same estate tax protections to non-citizen spouses. If the surviving spouse isn’t a U.S. person, the estate tax exemption drops to just $60,000. The rest? Potentially taxed at up to 40% of the principal value.
RMDs: The ticking clock you don’t want to ignore
Here’s another curveball: Required Minimum Distributions (RMDs). Sounds straightforward, right? Once you hit a certain age, the IRS says, “Time to take some money out of your IRA.”
But what happens if your account is frozen because you don’t have a U.S. address? You can’t place a trade. You can’t withdraw funds. And now you’re staring down a 25% penalty just because your mailing address has a country code.
This is a massive, yet preventable headache.
Simplicity and peace of mind
You don’t need to overhaul everything overnight. You don’t have to sell off your portfolio or make dramatic moves. But you do need to take stock of where things stand.
Start by asking:
- Where are your accounts?
- Who can access them if something happens to you?
- Does your financial setup actually match your current life?
I met with someone recently who called his accounts a “game of Whac-A-Mole.” Every time he fixed one issue, another popped up. But with a little clarity, a few smart adjustments, and the right custodian, things started to click into place. Less stress. More sleep. That’s the goal.
Disclaimer: This article is for educational purposes only and does not constitute financial, legal, or tax advice. Please consult with a qualified professional regarding your specific situation.
If your financial life feels messy or uncertain, now’s a great time to fix it. Don’t wait for an emergency letter or a frozen account to force your hand.
Book your free Cross-Border Financial Evaluation at www.profile-financial.com/call. We’ll talk about your setup, what’s working, what’s risky, and how to bring it all in line. You’ll walk away with clarity and maybe even a sigh of relief.
