No matter where we are in the world, technological advancements have allowed us to maintain family ties and relationships in ways that we never imagined. Long-distance communication is so common, in fact, many countries have adopted “international nomad” visas to attract more young professionals that want to enjoy the benefits of a global economy. Whether someone is living a jet-setting lifestyle or found a more permanent home abroad, estate planning has some caveats that international families need to consider to protect their assets and inheritance.
Differing Tax Jurisdictions
For individuals well-versed in global politics and legal matters, it’s not surprising that there are additional rules and regulations in place regarding estate taxes depending on where someone lives in the world. Tax jurisdictions actually have additional policies depending on where the assets exist and to which country they will be distributed. For estate plans involving U.S. residents, there are 15 countries that have estate tax-specific treaties that make the process cheaper and easier. The countries outside of these jurisdictions may have additional tax implications either from the country of origin or the U.S.
Certain countries also differentiate the tax codes based on whether the beneficiary is a permanent or temporary resident. In the U.S. beneficiaries only have to reside within U.S. territories to be subject to estate taxes. Depending on the location of physical assets, they may be subject to estate or inheritance tax laws wherever those assets are located. For example, if someone inherits a parcel of land in another country, the property may be taxed based on local tax laws as opposed to international tax laws.
Maintaining the Estate Plan
Regardless of whether someone has estate beneficiaries or stakeholders that reside abroad, it’s always important to keep an updated estate plan that reflects current life circumstances. Although keeping up with tax jurisdictions is essential for establishing an international estate plan, it’s equally important to continue paying attention to changes in tax policies and tax treaties, which sometimes change each year. If you’re a jet-setting professional with multiple properties across the globe and have accumulated a large amount of wealth, your estate may have reached a new bracket depending on the tax jurisdiction.
If one lives far from extended family, they may also need to have a revocable living trust in both their country of origin and in their current home country to ensure that their wishes are met. Incorporating guardianship of dependents and their inheritance can quickly become complicated if their guardians reside in another country, or if the other beneficiaries are U.S. citizens.
International or domestic estate planning can be an overwhelming process when there are many assets, stakeholders, and tax considerations to make. Working with legal counsel that is experienced and knowledgeable in both international law and estate planning will make your estate plan more effective and save money so that your beneficiaries can enjoy their inheritance for years to come. For a consultation, reach out to Waserstein & Nunez, PLLC online, or by calling 305.563.1011 today.
Waserstein & Nunez, PLLC
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