Globalization is not reserved for massive corporations or government entities anymore. Globalization is occurring on a much smaller level with individuals and families. Americans are living, investing, and conducting business outside of our borders now more than ever. However, little consideration is given to estate laws that may include international assets or property.
You may have pursued buying a little hacienda south of the border and retiring into a different lifestyle and community. With this plan, you may continue to have family or loved ones that live in the United States. These people back home in the U.S. may be your beneficiaries. If you take this route, you want to think about protecting your investment and your family if you become incapacitated or deceased.
Estate laws regarding international assets is another opportunity to protect your legacy, and protect your loved ones after you are gone. Failing to include your international assets or property in your estate plan can cause a significant amount of undue stress on your family or loved ones. By working with a skilled family estate planning attorney, you can reduce the unknown consequences of international estate laws.
Who needs an international plan?
If you are not sure about the need for exploring an international estate plan, here are a few types of people who should consider an international estate plan:
- Property owners in foreign countries – This could include real property, foreign stocks or insurance, or deposits in foreign banks. While the owner may be a U.S. citizen, the laws of the foreign country may make it difficult for property succession to your designated beneficiary.
- Multinational Families – Different tax laws apply to couple consisting of a U.S. citizen married to a non-U.S. citizen. Tax treaties that the United States maintains with many other countries may prevent double taxation in this situation. In addition, you will want to consider guardianship laws if children are present in the family.
- Expatriates or Nomads – A U.S. citizen that has established a place of residence in another country indefinitely may be considered an expatriate, and may be subject to different tax laws. A nomad can be someone who keeps a primary residence in the United States, but also has multiple residences in other countries. Different tax laws may apply to nomads, as well.
- Non-U.S. Citizens with U.S. Beneficiaries – This scenario could include tax implications for the beneficiary if the inheritance is over a certain amount. A secure estate plan can ensure succession to the non-U.S. citizen.
- Non-U.S. Citizen with Investments in the United States – This could include real estate, tangible property, or stock in U.S. corporations.
What do we need to consider?
With international estate planning, typical questions to consider include:
- Where is the deceased located? Inside or outside U.S. borders? Where are they a citizen?
- What is the citizenship of the beneficiary?
- Where are the assets located?
The aforementioned questions can help an estate planning attorney anticipate tax or estate law implications that may cause chaos with your estate plan. An estate plan is an important and necessary part of protecting your legacy and your loved ones. When considering international assets, there needs to be complete research to protect and secure your estate plan. The right estate planning attorney can put you at ease during the planning process with international assets.
