I am an American living in France for a few years, recently married to a European with no ties or legal status in the United States. I have a few questions about choosing how to deposit with my new partner and setting up some financial accounts.

I understand that our/my US filing options are 1) Non-resident alien (married, separate filing, so I only get a standard deduction, but the partner doesn’t need to file anything either in the United States = nice); 2) Resident Alien (Married Filing Jointly, so we get double the standard deduction, but partner must report income, FBAR, etc.).

Additional Background: My partner won’t be making a lot of money for the foreseeable future, and we’ll both be living off my investments/savings in the US for a few years.

We plan to open a life insurance under his name, financed by my employment income. We will only keep the life insurance open for a few years, before selling off with minimal risk-free gains of around 1% per year (euro funds).

A few questions arising from this:
1) Can I just transfer (i.e. give) money to my wife to finance her life insurance, without any tax obligation on the transfer? Suppose I earned 100% of that money while we were married.2) If the life insurance were in my name, it would be considered a PFIC, and I would have to pay the very high rate of tax on those instruments, in addition to filing an 8621 form. If, however, it’s in his name exclusively, can we avoid US taxation? Is there a caveat because the initial funding source of the life insurance is my job (and I’m American)?3) Does the standard deduction, or standard deduction for married people, apply to US investment gains we’ll live off in the next few years?4) Y is there anything preventing us from going from one status – filing married separately – and then changing it to filing married jointly in a year or two? Thank you very much to everyone on this forum. You have already helped me a lot with the questions that led to the above. And good luck to all the American expats trying to follow all these rules!!- Sapphire Party