Can a Non-Citizen Spouse Have an Estate Plan?

Speak to an estate planning attorney with in-depth experience in cross-border tax and estate planning. He or she will have deeper insight into the various transfer tax rules between the specific countries.

In addition, different rules apply to different family situations. For instance, if the wife is a U.S. citizen, all of her assets—regardless of whether they’re in the U.S. or Mexico—are subject to U.S. federal estate tax. However, for non-resident aliens, only certain assets held within the United States are subject to federal estate tax.

Those in this situation should also be aware of the lifetime estate/gift tax exemption. U.S. citizens have a lifetime exemption amount of $11.18 million per individual. Therefore, the first $11.18 million of their assets aren’t subject to estate tax. However, for non-citizens and non-residents, the exemption amount is just $60,000.

U.S. citizens also can transfer an unlimited amount of assets to their U.S. citizen spouse at death, without any estate tax consequences. If married to a non-resident, that unlimited marital deduction isn’t always applicable. However, you can gift up to $152,000 per year during your life to your non-citizen spouse.

It’s also worth noting that there are some strategies which can be used during a person’s lifetime to mitigate estate taxes. However, the right estate planning techniques depend on the specific situation.

This is a special situation that requires the knowledge of an estate planning attorney and accountant with experience in estate planning and tax for non-citizen residents. You’ll want your advisors to work together to make sure your plan is in place and to minimize any tax liabilities.

Reference: nj.com (August 13, 2018) “Not a citizen? These estate planning rules matter”