For U.S. citizens married to a non-citizen, estate planning can be a confusing process. This article discusses some of the most important aspects of estate planning for foreign nationals.
In many ways, the estate planning process is the same for U.S. citizens and non-citizens, but there are a few critical ways that they differ. Some special legal rules may affect your estate plan if you are married to someone who is not an American citizen.
Regardless of your spouse’s citizenship, you should both create an estate plan that includes wills or living trusts that protect assets that you have in the United States. You should also be sure to name beneficiaries for your retirement accounts and designate a durable power of attorney for both healthcare and financial purposes.
If you want to protect your family, you should speak to an estate planning attorney. In the meantime, here are a few things you should know about estate planning for foreign nationals.
What Happens to Assets?
For married couples in which both spouses are both U.S. Citizens, there is not a limit on how much they can leave each other. Known as the unlimited marital deduction, this exemption is in addition to the $11.7 million exemption that everyone gets before they are required to pay an estate tax.
When your spouse is not a citizen, however, the unlimited marital deduction does not apply if you leave them your assets. This means that if you leave more than $11.7 million to your non-citizen spouse, your estate will be subject to the estate tax.
Gift Giving
Similarly, any gifts you give your non-citizen spouse during your life are subject to a limit of $159,000 per year. Married couples where both spouses are citizens have no limit on gift giving.
QDOT Trust
One way you can avoid paying an estate tax when leaving your assets to your non-citizen spouse is to create what is known as a Qualified Domestic Trust, or QDOT Trust. Instead of leaving your assets to your spouse, you would leave them to the trust, which would pay an estate tax-free income to your spouse.
As with any estate plan that you create to protect your spouse and family, you should consult with a qualified attorney to make sure that your plan aligns with your needs. A QDOT Trust may or may not be right for you, depending on your situation.
We Handle Estate Planning for Foreign Nationals. Are You Prepared?
Now that you understand how estate planning is different for your non-citizen spouse, it’s time to take the necessary steps to protect your family. You only have to answer one question to get started—are you prepared?
Contact the estate planning experts at Casal & Moreno today. We specialize in estate planning for foreign nationals, so you can rest assured that your family will be taken care of, no matter where you are from.