Non-Citizen and International Estate Planning

Johnston, Kinney & Zulaica LLP has extensive experience working on international estate planning.

International estate planning refers to:
• Planning for non-resident aliens (NRA) investing in the United States;
• Planning for NRAs with U.S. beneficiaries;
• Planning for U.S. citizens investing abroad on living abroad, or with foreign properties.

In each of these cases, there are more complex issues that must be taken into consideration than with domestic estate planning. The United States tax rules applicable to NRAs are different than those applicable to U.S. Citizens. Furthermore, when there are multiple jurisdictions at play, taxes and intestacy rules - i.e., forced heirship - must be considered as well. We often work with co-counsel in foreign countries to examine these issues and sometimes concurrent estate plans are developed in each jurisdiction. It is extremely important that these documents work together both from a planning and tax perspective.

There are huge planning opportunities for NRAs with U.S. beneficiaries. NRAs who wish to make gifts to U.S. beneficiaries are not subject to taxes in the U.S. on the transfer of non-U.S. assets if planned properly.

Estate Planning for Non-Citizen Spouses

An important planning tool for married couples is the unlimited marital deduction for estate and gift taxes. This deduction allows for the tax-free transfer of assets between spouses during life and defers any estate taxes that would otherwise be due at the death of the first spouse. While the unlimited marital deduction is available for transfers to spouses who are citizens of the United States, it is not available for transfers to non-citizen spouses even if they are permanent residents of this country.

Special rules apply for spouses who are non-citizens. There are limits on how much can be transferred to a non-citizen spouse tax-free, both on an annual basis and at death. For maximum flexibility, we encourage those of our clients who are married to non-citizens to establish qualified domestic trusts through their revocable living trusts.

Some non-citizens (and U.S. citizens) may also have foreign assets and careful consideration of how to plan for those assets is important to avoid inadvertent tax consequences. We work with families from around the world and with assets in many countries. We offer all of our services in English and Spanish.

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