Specific Issues for Foreign Residents
SPECIFIC ESTATE PLANNING ISSUES FOR FOREIGN RESIDENTS
For most U.S. citizens, planning and drafting a will may be a simple task since, for most of them, only the law of their domicile will determine how the will should be written and executed as well as to whom the assets could be devised and how much estate and inheritance taxes would have to be paid.
For foreign individuals residing in the United States. the task is often more complicated due to the fact that some of their assets or beneficiaries may be located abroad. Questions have to be answered before drafting the will as to which law should apply to determine
- whether the will is in the proper form and properly executed,
- whether the testamentary dispositions are legal and
- what inheritance and/or estate tax must be paid. Should it be the law of the jurisdiction where the will was executed, where the testator was domiciled, where the assets are located, where the testator died, or where the beneficiary is located? Determining the applicable law is crucial considering, for example, that a handwritten will may be valid in France but not in the United States, that one can disinherit one’s children in the United States but not in France, or that a substantial part of an estate can be transferred free of any federal tax in the United States.
Fortunately, there are now international treaties between the United States and certain countries, including France, that provide the necessary tools to determine with a reasonable degree of certainty what law should be applicable to each of these questions.
For example, the convention Providing a Uniform Law on the Form of an International Will between the United States and France provides the means to create only one will, in either language, that both countries will validate as to its form. A second treaty, the Convention between the United States of America and the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Estates, Inheritances, and Gifts, enables the testator to anticipate, and, with some planning, to choose which law will determine whether testamentary dispositions are legal and under which law they will be taxed.
We invite you to set up an initial consultation to review your particular situation and to address your specific needs, such as:
- How to ensure that your testament will be valid in the United States and in another country?
- How to ensure that your testament will be found when needed?
- How to minimize the restrictions on your freedom to dispose of your assets as you wish?
- How to minimize U.S. and foreign taxes?
- How to ensure that a transfer to a non-U.S. citizen spouse will be free of U.S. taxation?