Estate Planning With a Non-Citizen Spouse

In the United States, foreign-born individuals comprise 14% of the national population, according to 2019 data from the American Immigration Council. Whether you are a non-citizen or have a non-citizen spouse, it is essential to have an estate plan in place.

While non-citizens can and should create estate plans, there are special considerations that need to be made during the estate planning process. As an estate planning attorney at  The Law Office of David G. Bale , David Bale understands the unique challenges non-citizens face when creating an estate plan.

If you need assistance in developing an estate plan for yourself or your non-citizen spouse, reach out to David Bale’s office in Westerville, Ohio, to get started. His law firm also serves clients throughout Franklin County and Delaware County, including New Albany and Worthington.

Can Non-Citizens Inherit Property?

If you are a U.S. citizen who has a non-citizen spouse, you may worry that you will not be able to leave property to your spouse because of their immigration status. However, U.S. law does allow non-citizens to inherit property, which means there is nothing to worry about as long as you have an estate plan in place. Whether you are drafting a will or creating a trust, you can name your non-citizen spouse as your beneficiary to ensure they can inherit your property.

Should My Spouse Create an Estate Plan?

Yes, your spouse should create an estate plan even if he/she currently has no U.S. citizenship. However, it is imperative that you understand the nuances and challenges of estate planning for non-citizens in the United States. You may need to work with an experienced estate planning attorney when creating an estate plan with a non-citizen spouse as the rules and regulations that apply to non-citizens differ from those that apply to U.S. citizens.

U.S. Citizen vs. Non-Citizen: A Different Estate Tax Exemption

In 2023, U.S. citizens and green card holders are entitled to an estate tax exemption of $12,920,000, according to the Internal Revenue Service’s website. Non-citizens are not entitled to the same estate tax exemption, which means they may be subject to substantial estate taxes when they die or their spouse dies.

The estate tax exemption for non-residents is only $60,000, which means they can only transfer $60,000 worth of property located in the United States to their heirs upon their death. Any amount over $60,000 will be taxed.

Any gifts you give to your non-citizen spouse are subject to an annual exclusion of $175,000 (in 2023). At the same time, when both spouses are U.S. citizens, there is no limit on gift giving.

Dual Taxation for Non-Citizens

Non-citizen and green card holders may be subject to estate tax in their home country, which can result in dual taxation. The U.S. signed an estate tax treaty with a number of countries. The treaty helps prevent dual taxation, which means both countries will not tax the same assets when the person dies. You might want to consult with  an attorney  to determine whether your or your spouse’s home country has entered into an estate tax treaty with the U.S. or if there are other ways to reduce or eliminate estate taxes in your particular situation.

Immediate Estate Tax for Non-Citizens in the U.S.

U.S. tax law offers substantial estate tax advantages when both spouses are U.S. citizens. However, when one of the spouses is a non-citizen, it could create additional challenges with immediate estate tax upon death.

When the U.S. citizen spouse dies first, the estate taxes can become due immediately upon their death. This is because the U.S. government wants to protect itself from a situation in which the non-citizen spouse goes back to their home country after their spouse’s death and dies there, making it impossible for the U.S. government to collect an estate tax.

Setting Up a Qualified Domestic Trust (QDOT)

One way to avoid the immediate estate tax is to set up a qualified domestic trust, also referred to as a QDOT. Instead of leaving their assets to their non-citizen spouse, the U.S. citizen spouse would leave them to the trust, which would pay an estate tax-free income to the non-citizen spouse.

However, there are specific requirements that must be met when setting up a qualified domestic trust. You might want to get legal counsel from a skilled estate planning attorney if your goal is to reduce the tax burden on your non-citizen spouse and put other documents in place to make your spouse’s life easier after you are gone.

Protect Your Spouse With Proper Legal Guidance

As you can see, having an estate plan in place can be beneficial for both yourself and your non-citizen spouse. If you’re ready to take your first step towards protecting your family and assets, contact The Law Office of David G. Bale. David Bale assists U.S. citizens, green card holders, and non-citizens in developing estate plans that suit their best interests and needs. Reach out to David Bale’s office today for a case evaluation.


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