If you are an expat, you should think about your United States estate planning for a variety of reasons. Not only are U.S. estate taxes complicated and potentially expensive, but you may need U.S. estate planning in place so that your wishes are carried out.
Why Do Expats Have to Pay U.S. Estate Taxes?
The U.S. government taxes U.S. citizens, as well as foreign citizens who own property in the United States. Expats often fall into one of those two categories. Usually, expats live in the U.S. and then choose to relocate to a different country, often leaving relatives and assets behind. They may renounce their citizenship or residency status, or retain U.S. citizenship after moving.
When expats pass away and leave assets behind in the U.S. or keep their citizenship, the U.S. laws may require their estates to pay estate taxes. U.S. citizens’ estates must pay estate taxes if the total value of their estates exceed $11.18 million. Non-citizen and non-U.S. residents’ estates must pay estate taxes if the total value of their U.S. property exceeds $60,000.
Estate Planning in the U.S.
As a result of U.S. estate taxes, expats who have any property at all in the U.S. or who retain citizenship need to do some U.S.-based estate planning. For example, you may want a will in place that follows U.S. laws and disposes of all your U.S. property. The laws of your new country, however, may conflict with U.S. law and result in double estate taxation. Your U.S. estate planning must take into consideration the other country’s laws and the value of your U.S. property.
In the U.S., you may need a will, a trust, a holding company for real estate, or other estate planning structures. Be sure to inform your estate planning attorney of all your U.S. assets. This includes pensions, 401(k) retirement plans, IRAs, bank accounts, and investments such as mutual funds. Discuss with your attorney any plans to renounce your citizenship or return to the United States. You should also alert your family to the existence of your U.S. assets. An executor or other administrator will need to gather and distribute your estate after your death, and to do so, he or she needs to know where the assets are.
Planning your estate? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience will give you confidence and peace of mind. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.