Since the ib joint account is for avoiding estate tax only
A joint account does
not avoid estate tax! Estate tax is either owed or it isn't, based on tax laws. U.S. estate tax liability (if any) is entirely and irrevocably determined on the date any account holder dies.
A joint account might, in certain circumstances, effectively double the U.S. estate tax exemption from US$60,000 to US$120,000, but not always. A joint account approximately doubles the risk of triggering an estate taxable
event since there are two people who could die at any moment in time, not just one.
boroangel said:
1. Based on what you mentioned above, how safe are buying treasury bills say through Charles Schwab? Specifically, can one lose his treasury bills if say Charles Schwab is to fold one day / bankrupt / close down with no other brokerage taking over, since the treasury bills are held by Charles Schwab and not in our name?
Quite safe, but there is that theoretical risk. If you're concerned about that risk, then keep your total custodial holdings at any SIPC-insured broker at US$500K or below.
2. Are Treasury Bills estate taxable?
No. U.S. Treasury bills, notes, bonds, and securities directly held are NOT counted toward your U.S. estate tax exemption. They are not U.S. estate taxable.
What if I place them as separate treasury bills of 60K USD each....
The US$60,000 exemption is per decedent. It doesn't matter whether you have 5, 10, or 58 separate accounts, or whether those accounts are at DBS Vickers, Standard Chartered, HSBC, or Schwab. The US$60,000 is a blanket, total, single exemption across all your U.S. estate taxable assets.
If you don't want U.S. estate tax liability, then there's only one solution: don't hold more than US$60,000 of U.S. estate taxable assets at any one time.
To repeat, if you hold individual U.S. Treasuries directly (bills, notes, bonds, and/or securities issued by the U.S. Treasury), those are NOT U.S. estate taxable assets. Shares of U.S. listed companies, U.S. domiciled funds, and cash in any currencies held at a U.S. broker are among the assets that are U.S. estate taxable and that do count toward your single US$60,000 exemption.
3. I am a Non-US person but what happens if I move to the US next year? How would that impact my holding of the T bills and any other taxes involved?
It would depend on your visa status, but if you were to become a U.S. person then you would become subject to U.S. tax rules. Some terms are more favorable, some are not.
Strictly
before you physically enter the United States it's highly recommended to adjust your assets to prepare for U.S. personhood. This post isn't the place to elaborate on how you would do that, but there are a few basic steps you will probably want to take. That's PRIOR to your physical entry into the United States, to repeat.
Anything in particular I should note with regards to my account in Charles Schwab and additional taxes?
Not for U.S. Treasuries. While you're a non-U.S. person Schwab is unlikely to be attractive for most other investments, although there are a few possible exceptions. Naturally you should put a W-8BEN on file with Schwab, then switch that to a W-9 if/when you become a U.S. person.
