Non-US citizens with property in the US face estate planning challenges not encountered by natural-born or naturalized citizens. But immigration status does not affect the importance and need for estate planning. Indeed, critical to estate planning for immigrants is obtaining sound guidance from an experienced estate planning professional.
Estate Planning for Immigrants: Attorney Guidance is Necessary
A US citizen with assets in the US may be able to develop a relatively uncomplicated estate plan. The same is not necessarily true for immigrants. Immigration status, whether or not combined with owning assets in various countries, can complicate the estate planning process drastically. A non-US citizen wishing to develop an estate plan needs experienced guidance on how to meet his or her estate planning goals and manage the legal and tax ramifications for after-death transfers.
Estate planning for immigrants requires consideration of three main factors for the development of a comprehensive estate plan: the immigration status of the testator (the person creating the estate plan); the immigration status of the legatees or beneficiaries (the people inheriting any property or financial assets); and the location of any financial accounts and property that is to be passed through the estate.
Each factor must be considered in light of the appropriate jurisdiction's inheritance and tax laws in order to prepare the most effective and efficient estate plan to transfer your property to your desired heirs after death.
The Effect of the Immigration Status of the Testator on Estate Planning
The citizenship, residency, or immigration status of the testator of a will and estate plan are key factors in immigrant estate planning. US citizens are subject to US estate and probate laws. US citizens with dual citizenship, permanent residents, and non-resident aliens who own property in the US or who will pass property on to residents of the US are subject to US laws as well as laws in their countries of citizenship.
The coordination of domestic and foreign estate planning laws often requires the engagement of an estate planning attorney experienced in such matters. Consulting an attorney with international experience in estate planning for immigrants will ensure that all local and international laws are followed so that property and financial assets pass to your heirs with the least amount of hassle or tax consequences.
How the Residency of Beneficiaries Affects Estate Planning for Immigrants
The residency status of your beneficiaries-the heirs you designate to inherit your property and financial assets-will also need to be taken into consideration when developing a comprehensive estate plan. The beneficiary's citizenship is important to ensure that property and assets are transferred and taxed properly upon death.
For example, when both parties in a marriage are US citizens, one may leave all of his or her estate to the other without incurring any federal estate tax. But, if the surviving spouse is a non-US citizen, the unlimited marital deduction does not apply. This may substantially impact the estate planning strategies used.
Whether foreign tax laws are also implicated, and whether tax credits apply to avoid overlapping levies, requires a detailed understanding of international tax laws and the coordination of laws from different jurisdictions.
Different Tax Treatment for US-Held Assets and Foreign Assets
Your assets include any valuable item, financial account, real or personal property, or business interest you may wish to pass onto your heirs when you die. Assets that are diversified around the world require careful consideration and international estate planning to develop the most cost-effective estate plan for passing your legacy to your heirs.
Several factors determine whether domestic or foreign estate tax laws-or both-apply to transfers of property after your death. These factors include the following:
- The location or situs of the asset;
- The nationality of the testator;
- Whether there is a tax treaty between the US and the testator's country of citizenship; and
- Whether any tax credits can be applied where more than one tax is levied.
Successfully navigating domestic and foreign tax laws requires an appreciation and understanding of those tax laws. Consulting a skilled estate planning attorney with experience in international estate planning is prudent.
Experienced Attorneys for Immigrant Estate Planning
Immigration status and the location of estate assets can complicate immigrant estate planning. If you are a non-US resident wishing to develop and memorialize an estate plan, you want to feel confident that you have the best, most effective estate plan in place. To accomplish that, work with an experienced and trusted international estate planning attorney.
Anna M. Price, an attorney with the firm of Jenkins Fenstermaker, PLLC, specializes in estate planning for immigrants in WV, KY, and OH and can help you with all of your estate planning needs. Contact Anna at the Huntington, West Virginia office at (304) 523-2100 or (866) 617-4736 toll-free. Or, use her online contact form to schedule a consultation.