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What do international couples need to know about estate planning?

Finding love across cultures and across national borders is a beautiful thing. It takes special people to overcome your differences…and all the paperwork. Unfortunately, like most things related to citizenship, estate planning if you or your spouse is not a U.S. citizen requires careful preparation.

What complications do non-US citizen spouses face?

In the US, when a spouse dies, they can leave their property and assets to their spouse who is a US citizen as a gift tax-free or inherited tax-free at an unlimited amount. Sadly, this is not true if your spouse is not a U.S. citizen.

As of 2019, if you are a non-citizen spouse you might expect the following:

  • Every year, you can receive up to $155,000 from your US citizen spouse or their estate (if they die before you) tax-free. A trust could help you accomplish this.
  • After $155,000, you will need to file a gift tax return where you may face heavy taxation.
  • Individual states can have their own estate and inheritance tax laws on top of federal ones. These may also affect the tax laws in the country where you claim your citizenship.

These are only some of the many considerations you may bring up with a financial planner to arrange a plan to support your spouse in the event of your death. Leaving it to the courts, as many people do when they don’t believe they have “enough money” to make an estate plan “worth it,” is a financially dangerous idea.

How does citizenship affect international marital property?

Another difficult point in many estate plans is the transfer of property across national borders. Inheritance of property through marriage can have unique challenges. Some countries have residency or citizenship requirements regarding property, others may require extensive legal paperwork.

The emotional and cultural considerations that go along with it are no small matter. This can be especially true when there are children or step-children involved, and their citizenship status with their ability to inherit.

With so many complications and legal considerations, estate planning across international borders requires an extensive knowledge of both federal and international taxes, customs and legal processes. If this is your situation, you may want to explore your legal options.

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