Although once uncommon, marriages between a U.S. citizen and a non-citizen are increasingly common today. Being married to someone from a different country and culture can bring happiness and joy along with legal concerns and considerations, especially when it comes to estate planning. The U.S. tax code treats married couples differently depending on the citizenship status of the spouses. For couples where one spouse is not a U.S. citizen, estate planning must be handled with particular care to ensure that tax benefits are preserved and that wealth transfers occur smoothly and in accordance with your wishes. With that in mind, the Los Angeles attorneys at Schomer Estate & Wealth Advisors explain five important estate planning considerations to keep in mind if your spouse is not a U.S. citizen.
- The Unlimited Marital Deduction Does Not Automatically Apply. One of the biggest advantages of being legally married in the United States is the unlimited marital deduction which allows a U.S. citizen to transfer an unlimited amount of assets to their spouse during life or at death without incurring federal estate or gift taxes. Unfortunately, this benefit does not apply if the receiving spouse is not a U.S. citizen. As a result, any assets transferred to a non-citizen spouse, either during your lifetime or upon your death, may be subject to federal estate or gift tax. This means that without proper planning, a sizable portion of your estate could be lost to taxes. To prevent this, you must consider alternative strategies that allow you to protect your assets and reduce the potential tax burden on your surviving spouse.
- A Qualified Domestic Trust (QDOT) May Be Necessary. A Qualified Domestic Trust (QDOT) is a special type of trust that can be used to preserve the benefits of the marital deduction when your spouse is not a U.S. citizen. When you leave assets to a QDOT instead of directly to your spouse, those assets are not immediately subject to federal estate tax. Instead, the tax is deferred until distributions are made from the trust or until your spouse passes away. Creating a QDOT is a critical step in protecting your surviving spouse from a heavy tax burden while still preserving your estate for the future. The QDOT must meet specific legal requirements, including:
- At least one trustee must be a U.S. citizen or a U.S. corporation.
- The trust must comply with IRS regulations.
- An election must be made on the decedent’s federal estate tax return to qualify the trust.
- Gift Tax Exclusion Limits Are Lower for Non-Citizen Spouses. Another significant difference in how the tax code treats citizen and non-citizen spouses appears in the rules governing tax-free gifts. U.S. citizens may give their spouses an unlimited amount of money or property without triggering the gift tax. For gifts made to a non-citizen spouse, however, there is an annual limit on how much can be transferred tax-free. As of 2025, the annual exclusion amount for gifts to a non-citizen spouse is $190,000 (adjusted periodically for inflation). Gifts above this threshold may be subject to gift tax or require the use of your lifetime gift tax exemption. This limit can have long-term implications for your wealth transfer strategy, especially if you plan to make significant gifts during your lifetime. Careful tracking and planning are essential to avoid unintended tax consequences.
- Tax Residency and Domicile Impact the Entire Estate Plan. The tax consequences of an estate plan involving a non-citizen spouse can also depend heavily on the spouse’s tax residency status and domicile. If your spouse resides in the United States but is not yet a citizen, the IRS may treat them differently based on whether they are considered a resident for tax purposes. Residency status can impact gift tax, estate tax, and income tax obligations. Additionally, domicile, where a person intends to reside permanently, may affect how state laws apply to your estate. If either spouse owns property or maintains connections in another country, this can further complicate the estate administration process and may subject parts of your estate to foreign laws. For couples with international ties, it is often necessary to coordinate planning strategies across multiple jurisdictions to ensure that assets are distributed in the most efficient and legally compliant manner.
- Consider Dual Wills or International Planning Tools. If you and your spouse own property in another country or plan to retire abroad, you may need to consider international estate planning tools, such as dual Wills, one for the United States and one for the foreign country. This approach can help ensure that each Will complies with the specific legal requirements of the country in which the property is located. You may also wish to consider creating an “International Will” with the help of an experienced estate planning attorney. Without country-specific planning, probate in a foreign jurisdiction can be both time-consuming and costly. Dual Wills or an international Will can streamline the process, reduce delays, and provide clarity about which assets are governed by which estate plan. It is also wise to consider the implications of treaty agreements between the United States and your spouse’s country of citizenship, as these treaties can sometimes impact tax treatment, asset transfer rules, or legal rights of the surviving spouse.
Do You Have Questions about Estate Planning When Your Spouse Is Not a U.S. Citizen?
For more information, please join us for an upcoming FREE seminar. If you additional questions about estate planning when your spouse is not a U.S. citizen, contact the experienced Los Angeles estate planning attorneys at Schomer Estate & Wealth Advisors by calling (310) 337-7696 to schedule an appointment.
A graduate of Boston University School of Law, Scott P. Schomer is a frequent lecturer on estate planning and elder law issues, having discussed these important issues on local and national television. A seasoned courtroom advocate, Scott has obtained combined judgments and verdicts in excess of twenty-five million dollars for his clients. Read More!
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