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Estate planning as a non-citizen in America

On Behalf of | Jul 5, 2017 | Blog

Here in California, we enjoy a large number of non-U.S. citizens as a significant portion of our state residents. This reflects well on California as a progressive state that values people of all backgrounds, but also implies a number of legal issues when it comes to estate planning that one should not overlook.

This is not to say that non-citizens cannot create effective estate plans, but rather that such a plan contains slightly different components than an estate plan for a fully fledged citizen.

Estate planning is rarely simple in the most basic circumstances, but estate planning for non-citizens requires very specific attention. If you are a non-citizen who wishes to create an estate plan, it is crucial that you get proper help from an estate planning attorney who can walk you through the process and help you navigate around various legal pitfalls.

Don’t delay creating a plan to protect the ones you love

One big problem with estate planning in general, and estate planning for non-citizens specifically, is that many people neglect to create an estate plan at all, and then pass away before they ever get to it. If you are already considering these matters, let that serve as enough motivation to get the matter settled.

The largest obstacles for non-citizens are the federal and state laws that may affect how large an estate a non-citizen can amass before triggering taxation. In general, non-citizens face federal taxation on estates that exceed $50,000.

This is a fairly low threshold anywhere in the country, but in California it is exceptionally low. This cap does not even allow for a person to own a home in almost any circumstance.

Furthermore, if you have intangible assets like stocks or bonds, the legal location of those assets may seriously affect your estate plan because of local taxation or regulations on property you own in other countries.

Other various state-level laws may also take a chunk out of your estate, but you do have some options for protecting your assets.

Consider using trusts to protect yourself and your assets

One of the most effective tools available to an estate planner is a trust. There are many kinds of trusts, each with its own purpose and advantages, but they all operate in the same basic way.

In broad terms, a trust is an instrument that allows you to take property out of your personal ownership and place it in the ownership of another person or entity. This is exceptionally useful to non-citizens, because it allows you to place property in the ownership of a citizen and out of the reach of many laws that target non-citizens.

Of course, the protections you enjoy vary from trust to trust, so be sure to create exactly the trust that best serves your needs.


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