Many people in the Washington, D.C. Metro area are members of “International families” and have family and friends who do not live in the United States or who are citizens of other countries. International estate planning is especially important for you:
The U.S. Federal Government, along with individual states, create rules and regulations regarding the settling, and taxation of estates, the taxation of inheritances and disclosing gifts. These rules can vary, depending on whether you and your spouse are citizens or residents of the U.S, the size of your estate, the value of gifts you have bequeathed during your lifetime, where you are “domiciled” at the time of your death, the nature and location of your assets, and whether an international income or estate tax treaty applies.
Similarly, other countries may have their own rules and regulations with respect to gifts, estates, inheritances, and the nature and location of assets over which they may have taxing rights. Most often, these rules and regulations are neither uniform nor consistent with the U.S. rules.
A lack of awareness and failure to plan properly, and not following the rules in each jurisdiction, can lead to adverse tax consequences, delays in distributing assets to beneficiaries, and even losing potential benefits for you or your future beneficiaries.
Yes! You absolutely must consider and address foreign estate obligations. Unlike some courts around the world, anyone can come before American courts and seek relief – subject to certain rules and conditions. While controversy swirls around the enforcement of international claims in U.S. courts, they still occur. Estate planning is a comprehensive process that should provide certainty if death occurs or other unexpected events. Establishing certainty when dealing with foreign countries is essential to creating a comprehensive estate plan.
Whether you are part of an estate plan which impacts a different jurisdiction or aspects of your estate plan could be recognized in a foreign country, you need to consider the full ramifications of giving or receiving a gift. There are several necessary estate planning inquiries when dealing with international estate planning which features different answers in each jurisdiction, such as:
Finally, and most critically, you need to assess whether the foreign country in question has a treaty with the U.S. which addresses estate planning issues, and which can provide a certain amount of uniformity as to the issues referenced above.
The U.S. has estate and gift tax treaties with a few foreign countries (some European countries, Canada, Australia, Japan, and South Africa). However, the U.S. does not have treaties with most countries in Eastern Europe, the Middle East, Africa, and Latin America. Further, some countries may have different legal systems, and inheritances may be governed by religious laws.
Addressing these questions is often a complex task and requires trusted legal expertise, along with collaboration with international counsel – what works well for U.S. may not work so well in the foreign country and vice versa.
International estate planning is an immensely broad and complex area of the law. Let the experienced international estate planning team of attorneys at Altman & Associates, A Division of Frost Law guide you through this process. We work with clients with families and assets in the U.S., Europe, Australia, India, Israel, Asia, and Africa. Contact us by phone at (301) 468-3220 or online to schedule a consultation.