How Immigration Status Impacts Estate Planning in the U.S.
On Behalf of Coughlon Law Firm, PLLC. | Oct 22, 2024 | Immigration
Estate planning can be a little complicated when it involves immigration. If you or your spouse are not U.S. citizens, some specific tax rules and regulations will apply to you. Immigration status impacts how your estate is taxed and what you can pass down to your family. Understanding these details is important so you can avoid extra costs and complications.
Tax Issues for Non-Citizen Spouses
One major difference for non-citizens involves taxes. Normally, U.S. citizens can transfer assets to their spouse without paying estate taxes, thanks to the unlimited marital deduction. However, if your spouse is not a U.S. citizen, this rule does not apply. That means assets over $185,000 (the limit as of 2024) might be taxed if left to a non-citizen spouse.
Qualified Domestic Trust (QDOT) can help you avoid paying taxes right away by delaying them until the assets are withdrawn or when the non-citizen spouse passes away. This is a good option for those with non-citizen spouses to consider.
Inheritance Rights for Non-Citizens
In general, immigration status does not stop someone from inheriting property in the U.S. Even if you are not a citizen, you still have the right to inherit assets. However, things can get complicated when you have properties in more than one country or if your heirs are outside the U.S. Managing these assets might involve dealing with different laws, which is why it is a good idea to plan carefully.
Cross-Border Assets and Taxes
If you own property or have family members in another country, you will have to deal with more complex estate planning. Other countries may have different rules about passing down property, and some do not recognize U.S. trusts. There is also the possibility of double taxation if both countries tax the assets you pass down. This is why working with legal experts who know both U.S. and foreign laws is important.
Plan Ahead to Protect Your Estate
Estate planning for non-citizens can be complex, but the right strategies can help avoid high taxes and legal issues. If you need help understanding your options, including setting up a QDOT or planning for cross-border assets, contact Coughlon Law Firm, PLLC, today for guidance.
