International estate planning is increasingly important for many individuals, particularly those with assets across multiple countries. Whether you are a U.S. citizen with international property, a resident alien with assets abroad, or a non-resident alien with U.S. holdings, understanding how to manage your estate across borders is crucial. Here’s a breakdown of the essential types of international estate planning and why legal support is vital.
Estate Planning for U.S. Citizens with International Holdings
Owning international assets as a U.S. citizen necessitates a comprehensive approach to estate planning. A standard U.S.-based estate plan may not suffice to effectively manage these assets. Instead, additional estate planning in the country where your international assets are located is often required to ensure your wishes are honored and your loved ones are protected.
For example, many European Union (EU) countries have complex forced inheritance rules that differ significantly from U.S. law. These rules can dictate how your assets are distributed, regardless of your wishes. Additionally, some countries do not recognize trusts, which are a common estate planning tool in the U.S. These differences underscore the importance of having a will and/or trust that is valid in both the U.S. and the countries where you reside or own property.
Working with an attorney experienced in international estate planning can help ensure your plans are cohesive and comprehensive. Proper planning can help you avoid or minimize exposure to the probate process in both the U.S. and other jurisdictions.
Estate Planning for U.S. Resident Aliens
U.S. Resident Aliens, or Green Card Holders, often maintain property and loved ones in their native countries. This situation presents unique estate planning challenges. While Resident Aliens benefit from a larger U.S. gift and estate tax exemption compared to non-resident aliens, they do not qualify for the unlimited marital deduction available to U.S. citizens. This limitation can lead to estate tax liabilities upon the death of a spouse.
To mitigate these issues, U.S. Resident Aliens should consider establishing a Qualified Domestic Trust (QDOT). An international estate planning attorney can help you maximize the benefits of a QDOT and navigate other estate planning tools effectively.
Estate Planning for Non-Resident Aliens
Non-Resident Aliens with U.S. assets must be aware of their potential estate tax liabilities. Unlike U.S. citizens and Green Card Holders, Non-Resident Aliens only qualify for a $60,000 estate tax exemption on their U.S. assets. Assets exceeding this amount are subject to a 40% estate tax rate.
Real estate investments are particularly popular among Non-Resident Aliens, making estate tax planning essential. If you own U.S.-based assets, planning ahead with the help of an international estate planning attorney is crucial to avoid unnecessary tax burdens.
Estate Planning for Non-Resident Aliens Seeking U.S. Residency or Citizenship
If you are a Non-Resident Alien considering U.S. residency or citizenship, there are important estate planning considerations to address before applying for a U.S. visa. Understanding the tax implications of changing your status can help you make informed decisions about your estate and gift tax liabilities.
An experienced international estate planning attorney can assist in limiting your tax exposure for assets owned both inside and outside the United States, ensuring a smooth transition in your estate planning strategy.
Your Trusted Partner in International Estate Planning
Navigating international estate planning can be complex, but you don’t have to do it alone. At the Law Offices of Charles L. Kurmay, our skilled attorneys specialize in managing the intricate estate and gift tax issues associated with international assets. We are committed to helping you protect your global estate and ensuring a seamless transfer of your assets.
Contact us today to discuss your international estate planning needs. Call us at (203) 380-1743 or schedule a consultation.
