The United States offers many different types of visas for people from other countries to spend time here, and your visa status can affect your estate planning. For tax purposes, the Internal Revenue Service distinguishes among people with citizenship or residency status and people without it.
Why Does Citizenship Status Matter for Estate Planning?
In the United States, people who are citizens or who are lawful permanent residents (meaning they have green cards) receive more beneficial estate tax exemptions. If you are here on any kind of visa, have a visa waiver, are an alien visitor, have been granted or are seeking asylum, or are a refugee, you unfortunately do not receive the beneficial exemption.
Having a larger estate tax exemption in the United States matters if you own any property here and then pass away. For example, many visa holders or refugees get married in the U.S. and purchase a home or car here. Gaining a green card or citizenship may take a very long time, so they do not want to put their lives on hold while waiting.
If someone who is not a U.S. citizen or green card holder passes away while owning property in the United States, his or her estate may (1) owe estate taxes to the IRS and (2) need to begin a probate proceeding in the U.S. state where the property is located. Whether this is necessary depends on:
- What kind of property the deceased person owned
- How much the property was worth
- Their country of origin and any treaties it has with the U.S.
- Marital status and citizenship of their spouse
- Any estate planning they did before their death
How Can an Estate Plan Help?
Making an estate plan in the United States can not only reduce the likelihood that your estate will owe U.S. taxes, but also potentially eliminate the need for a probate court proceeding in the U.S. Achieving these goals may require sophisticated estate planning structures such as a QDOT (qualified domestic trust) or other kinds of trusts.
If you are on a visa or do not have permanent resident status and you plan to purchase any kind of property in the U.S. (including securities), you should consider making a U.S. estate plan. Talk to a U.S. estate planning lawyer with international planning experience for advice.
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.