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5 Estate Planning Tips for Non-U.S. Citizens

By Christopher Coble, Esq. on May 25, 2017 4:00 PM

This post was updated on March 30, 2022

Estate planning, although necessary, is never fun. Between federal estate taxes and state inheritance laws, designing a plan for your property after death — and drafting the essential documents — can be a major headache. Those arrangements can only get harder for non-U.S. citizens.

While navigating estate and immigration laws may seem overwhelming, here are five tips that can help simplify the process.

1. Figure Out Federal Laws

Federal estate taxes apply to all U.S. citizens and the estate of any deceased person who leaves property located within the United States. So if you are living here on a green card and make enough to owe federal estate taxes, your estate will be taxed in much the same way as U.S. citizens' estates. The United States also imposes a tax on the gross estates of nonresident immigrants if the estate is larger than $60,000. The value of your estate includes any property you own in the United States, such as a house and vehicle. It can also include investments, such as stocks in U.S. corporations.

As such, it's also important to determine where property is located for legal reasons. While the location of real property, like land or a home, is easy to determine, personal property like stocks, bonds, cash, automobiles, and other personal effects can be more difficult, especially for non-citizens. Additionally, depending on applicable state law, the location of property for the purpose of probate administration often differs from the property's legal location for the purposes of federal and state death taxes.

2. Study State Statutes

In the past, states would forgo their own estate taxes for a piece of the federal pie. But more states are imposing their own estate taxes, which can vary from state to state. And while the trend has been moving away from taxing property passed on after death, there are still states that enforce inheritance taxes. It is important to familiarize yourself with these laws, as it may be possible to gift some property tax-free before your death.

3. Trust a Trust

While many U.S. citizens' go-to estate planning document is a will, it may not be beneficial to non-U.S. citizens. Trusts can help avoid property administration via probate, even if property held in the trust may still be subject to federal estate taxes and state inheritance taxes.

4. Familiarize Yourself With Other U.S. Estate Planning Documents

If you are not a U.S. citizen, but your life is here, your estate plan must go beyond a will or trust. It is important to learn about other documents that most people include in their estate plans. These include a financial power of attorney, which designates someone to manage your financial affairs if you cannot do so on your own because of an incapacity. It can also include a health care directive and living will, which spell out your wishes for health care in certain situations when you cannot make your own decisions and designate someone to make some health care decisions on your behalf.

5. Link Up With a Lawyer

Estate planning can be a complex process with overlapping and sometimes conflicting legal concerns. And there are many things an estate planning lawyer can do that you can't. If you're a non-U.S. citizen or nonresident alien with questions about estate planning, contact an experienced attorney today.

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