Estate planning is always a highly involved process but for cross-border families, estate planning can be rife with difficulties. Those who own assets in foreign countries or are married to a non-citizen spouse have additional issues to consider when estate planning, such as double taxation and foreign intestacy laws. For these families, the importance of being represented by a qualified estate planning attorney who has experience with cross-border estates cannot be overstated. Without proper estate planning, cross-border families run the risk of a bequest, or even their entire will, being invalidated, leaving the distribution of their assets to foreign or domestic intestacy laws.
The following list, though not exhaustive, highlights common examples of when special estate planning for cross-border families is necessary:
- A U.S. citizen who owns property in a foreign country
- A U.S. citizen married to a non-citizen spouse
- A non-citizen who owns property in the U.S.
- Other cross-border families where international assets are at issue
Families that possess one or more of these characteristics will greatly benefit from hiring an estate planning attorney who has experience with cross-border families in order to avoid the common pitfalls associated with international bequests. For example, one common problem that coincides with international assets is double taxation. When a U.S. decedent transfers foreign property, it is likely that U.S. estate tax will apply. However, in certain countries, foreign estate tax may also apply, resulting in double taxation. An experienced estate planning attorney can draft estate documents in such a way as to minimize, or completely avoid, double taxation of international assets.
There are several possible solutions that your attorney may propose in order to protect your international assets with an estate plan. The first is to prepare two different wills: one for the U.S. and the other for the foreign country, in which citizenship exists or the assets are located. This can be an effective solution if done carefully: the U.S. lawyer you hire must either be familiar with the estate laws of both countries or work closely with an attorney in the other country in order to avoid conflicting clauses that may invalidate a bequest or, in extreme cases, cause a will to be revoked. The other common solution to international assets in estate planning is to prepare an international will. An international will allows an asset-holder to have one valid will that will be recognized in both the U.S. and the foreign country in which citizenship exists or assets are located. When properly drafted, an international will is considered valid in any of the numerous countries that have signed the Uniform International Wills Act. Thus, an international will saves time and money as well as preemptively avoiding potential pitfalls that can occur when two different wills exist.
Estate planning for cross-border families involves special considerations and experience in order to be done properly. If you have a cross-border family and are interested in estate planning, the dedicated legal team at Milvidskiy Willis LLP has the expertise and knowledge to provide your family with effective estate planning and protect your assets at home and abroad. Contact us today to schedule a consultation with an estate planning attorney.