Cross-Border Estate Planning

Top 5 Concerns for Families to Consider When Holding Property in Multiple Countries

When families own assets in both the United States and other countries, there are several estate planning issues that can arise that may come as a surprise to those who have not planned ahead. As a law firm with experience in both Estate Planning and Immigration, the Gunderson Law Group has prepared this short checklist of issues to consider when evaluating your own estate plan.

Consider whether any of the following issues apply to your family’s situation. If they do, discuss with your attorney how best to update your estate plan to account for these issues:

Dual Jurisdiction

Families with assets in multiple countries need to navigate the complexities of estate planning laws and regulations in each jurisdiction, which can vary significantly. This may include preparing estate planning documents to govern assets in each jurisdiction (such as by preparing a Will for U.S. assets and a separate will for foreign assets).

Tax Considerations

Taxation is a critical issue when it comes to estate planning across borders. Families must understand the estate and inheritance laws of each country and consider strategies to minimize potential tax burdens. For example, the U.S. has tax treaties with many countries that dictate which assets will be subject to U.S. estate taxes and which assets may be exempt from taxation. If your family has assets in multiple countries, do those countries have treaties in place that will affect your estate’s taxation requirements?

Competing Succession Laws

Each country has its own succession laws that determine how assets are distributed upon death. Understanding and addressing these laws is crucial to ensure that the intended beneficiaries receive their inheritances. For example, some countries have forced heirship laws that prohibit individuals from disinheriting certain family members. In the United States, this is less common, but many states have similar laws that provide statutory protections to disinherited spouses or minor children. Understanding the nuances of these succession laws may impact whether your estate plan is enforceable or not. It is always best to work with an attorney who is experienced with the laws of your jurisdiction. Families with assets in multiple jurisdictions may benefit from a team-based approach to estate planning, where experts from multiple jurisdictions can collaborate on an overall plan.

Foreign Account Reporting

Compliance with reporting requirements for foreign financial accounts and assets is crucial. Here again, it is important to work with a team of experts to ensure you are compliant with applicable laws. For U.S. taxpayers with assets abroad, you may be required to report foreign accounts under the Foreign Account Tax Compliance Act (FATCA), including submission of the FBAR (FinCEN Form 114) or FATCA Form 8938. U.S. persons who inherit foreign accounts are often unaware of these requirements. Working with an experienced attorney and/or tax advisor is essential when dealing with international estates and inheritance issues.

Cross-Border Family Dynamics

Complex family dynamics can always present unique challenges in estate planning. This is especially true for cross-border families. For young families with minor children, who do you want to take care of your children if you are unable to care for them? If your chosen guardian lives in a different country, what barriers may prevent that person from obtaining legal custody over your child or from obtaining the proper visas?

These examples highlight some of the legal issues that may arise in planning for cross-border families but, of course, this is not an exhaustive list. As you reflect on your own life situation and estate planning goals, you may consider other issues that are important to you and your family. If you have questions or concerns about your estate planning options, consult with a knowledgeable estate planning attorney. You can contact us at contact@gundersonlawgroup.com.