California Estate Planning Attorney
International Estate Planning Attorney
Expertise In “u.s. Situs” Asset Protection
Complex estate and gift tax rules apply to your estate planning if you are not a U.S. citizen and you own assets in the United States.
The rules vary depending on whether you are a non-resident alien (NRA) – someone who is present in the United States on a temporary basis, such as a visitor, a student, or a on work permit (for example, an H-1 or a B-1 visa), or a resident alien (a “green card” holder).
These rules become even more complex if you die owning “U.S. situs” assets. Without getting overly technical, U.S. situs assets include stock options in a U.S. company, stock ownership in a U.S. company, a U.S. company’ corporate bonds, and real estate located in the U.S. Other items are included, too, but these are the most common.
For example, many people think land in Silicon Valley is very cheap right now. They are flocking to Los Altos, Palo Alto, Atherton, and other San Francisco Bay Area communities to purchase houses and condominiums.
These real estate investors may be quite right … some of the real estate in the Bay Area is at its lowest price in years.
But they are overlooking an important consideration: if they are not U.S. residents and something were to happen to them, they are only entitled to a $60,000 exemption from U.S. gift and estate taxes – non-resident aliens (NRAs) pay a much higher rate of gift and estate taxes than U.S. citizens.
Since international estate planning can get complicated very quickly, it is often necessary, and advisable, to secure legal services to complete the process. An overview of what to expect and the benefits of international estate planning legal services is provided below.
Janet helped me to resolve a very difficult situation with a family member who was sadly appointed as an executor and who fell off the radar screen for more than two years with a substantial amount of money to be distributed to his siblings. Janet was brilliant and efficient and came through very admirably.
- Karen A.
What is involved in an international Estate Plan?
Depending upon the complexity of your unique situation, immigration status, and type of assets, different elements may be incorporated in your estate plan. While international estate planning contains many of the same components, financial strategies, and tools as domestic estate planning, some aspects require additional attention, including:
- International Tax and Inheritance Regimes
- Residency, Citizenship, and Domicile Status Differences
- Situs and its Application
- Tax Treaties and Foreign Tax Credits
- Estate Planning Tools and Their Portability
- Non-U.S. Citizen Spouses
- Gift and Inheritances from Foreigners
- Optimizing a Cross-Border Portfolio
These considerations and their related complexity are best handled by legal experts.
Janet was recommended to me [as] one of the best.
- Nick
How can a Palo Alto California legal team benefit my international estate plan?
There are many benefits in securing legal expertise while creating an international estate plan. These benefits include, but are not limited to, the following:
- Navigating U.S. Taxation – Taxation in this country is considered “exceptional” in reach and scope. Taxation rules – including transfer taxes, and estate taxes – are levied regardless of geographical location. Ensuring compliance with these rules is essential.
- Assistance with estate planning challenges – Challenges often arise for expatriates and multinational families. Legal professionals can help navigate the multi-jurisdictional rules that may impact surviving family members.
- Understanding governments with deferring law foundations – The U.S.’s estate system is based upon English common law, which starkly contrasts the civil law system that is in place for the majority of Europe, Latin America, and Africa. Civil law systems are generally much more detailed and less open to interpretation. Planning for these differences is crucial.
- Flexibility in common law –Since the U.S. system is based upon common law, and therefore, much more open to interpretation, legal professionals understand how to leverage the appropriate tools (wills, trusts, etc.) in a way that ensures property transfers occur as intended.
- Succession/forced heirship – For countries based upon civil law, traditional estate planning tools may not be valid, and the concept of forced heirship will be favored. This requires that an international estate plan account for the different legal structures.
- Citizenship, Residency, and Domicile concepts – A person’s legal immigration status in their home country or country of residence can have a substantial impact on how taxes are levied. These distinctions and their associated short- and long-term implications can be successfully navigated by legal professionals. Failure to account for these differences can result in unforeseen liability.
- Rules governing transfer tax situs and the impact of treaties and foreign tax credits – Situs is Latin for “position” or “site,” and it refers to the location of the property for legal purposes. Essentially, assets located in the U.S. are subject to federal estate tax, but the status of intangible property and personal investment funds can become complicated. International estate planning services can take into account how transfer tax situs will impact all of the individual’s property based upon its location.
Planning and protection for everything you own and everyone you love
Why should international estate planning documents be prepared in advance?
Preparing international estate plans in advance is crucial – this is especially true when some of the assets, or the individual, is located in the U.S.; it is true even for residents who only spent a brief period of time in the U.S. Since the U.S.’s legal foundation in common law is open to interpretation and subjectivity, providing a prepared plan in advance removes the uncertainty of how your intentions may be ultimately interpreted. It also decreases the likelihood that your assets will end up in probate, a process that can be fraught with complications and family disagreements.
Contacting a legal professional in the U.S. is also advisable for foreign individuals who may be subject to domiciliary status. This status may result in unforeseen U.S. estate and gift taxes. Domiciliary status is subjective, and can be based upon several factors (e.g., length of time in the U.S. and other countries, the location of the primary residence, visa status, where the individual votes and how other legal documents reference status). All of these factors contribute to intent, which may have an impact on possible taxation. Garnering legal advice as to domiciliary status, and how to account for any physical assets that may be located in the U.S., is advisable for any foreign residents that may be unsure of their status.
Janet is right on top of the basics, as well as more complex things that relate to your particular situation.
- Mr. T
Advanced U.S Gift and Tax Law Expertise
The rules that are applied to estate and gift taxes are much more complicated for those who aren’t American citizens, and they can vary depending on the person’s residency status. Even if non-US citizens have their “green cards,” they may still be subject to the extremely high gift and estate tax rate that non-resident aliens pay – a person can be a US resident for income tax purposes but a “non-domiciliary” for gift and estate tax purposes. While US income taxes are based on “residency,” US gift and estate taxes are based on “domicile,” which is a very different concept.
There are ways in which a “non-domiciliary” can legally avoid having to pay high gift and estate tax rates. However, not many estate planning lawyers are aware of the planning opportunities for non-US citizens and non-residents.
Work with an attorney familiar with the effects of U.S. estate and gift tax law
It’s crucial that you work with an attorney who is familiar with the effects of U.S. estate and gift tax law on you and your family – and who also knows how to deal with the fact that your country of birth may tax you, too.
About a quarter of the work Janet does involves international estate planning. She’s always had a keen interest in this niche area. Janet is a member of STEP, an international society of trust and estate practitioners specializing in international estate planning. And she regularly attends seminars taught by renowned experts in the field, which keeps her tapped into innovative estate planning ideas and cutting-edge approaches.
Call today to find out how the Law Office of Janet Brewer can help you plan your estate so that your family does not pay hundreds of thousands of dollars in estate taxes that could have been avoided by knowledgeable international estate tax planning.
Please call (650) 405-0190 today to let us know your needs.
