Estate planning involving a citizen of another country may complicate matters.
You met someone from another country.
You fell in love.
You got married.
And you are living happily ever after until the end of your days.
But have you prepared your affairs in case one of you dies before the other.
According to a recent Trust Advisor article titled “Foreign Spouses Need Strong Trust Planning,” when estate planning involves international considerations it becomes more complicated.
Why is this important?
How are these individuals divided?
Those who establish residence and are not U.S citizens are resident aliens.
Those who do not establish residence and are not U.S. citizens are nonresident aliens.
Nonresident aliens often hold personal or real property in the U.S. itself.
If you are someone you love is a not a citizen of the U.S., then you will need to include this consideration in your estate planning.
Estate taxes will be imposed by the U.S. on estate and gift taxes of U.S. citizens and resident aliens for assets held worldwide.
Translation? All of your stuff regardless where located.
When it comes to estate planning, you will need to consider citizenship for you and your spouse.
Although there are a number of factors contributing to estate and gift taxes on foreign individuals, a key one is the defining the residency and domicile of the individual.
How is residency determined?
If an individual lives in the U.S. when she gives a gift, it is subject to U.S. gift tax rules.
If an individual dies while in the U.S. without an intention of leaving the country, his or her estate is subject to U.S. estate tax laws.
How is “intent to leave” determined?
The IRS will review tax returns, length of U.S. residence, visa status, religious and social affiliations, driver’s license issuance and voter registration.
Is merely having a green card enough to establish intent to stay?
More factors will be considered when determining residency for tax purposes.
If you or your spouse are from another country, be sure to contact an experienced estate planning attorney to determine where you stand and what your next steps should be.
So, how do you find an "experienced" estate planning attorney?
First, ask around. Friends, family and other professional advisors are trustworthy sources.
Second, conduct an "organic" search on "Google" for "estate planning" near you (e.g., "Estate Planning Anytown MoKan").
Third, either way, verify! Check out the education, experience, ratings and client reviews of any attorney before you contact him or her.
In fact, I use both of these services to thoroughly vett attorneys before referring members of our "client" family for legal help in other areas of law or for matters in jurisdictions outside Kansas or Missouri.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Trust Advisor (April 24, 2017) “Foreign Spouses Need Strong Trust Planning”