Estate Planning for Non-Citizens Living in the US

If you hold a green card or a long-term visa, your estate plan cannot simply copy the one a citizen neighbor signed. The federal estate tax treats you by domicile rather than by immigration status, the unlimited marital deduction disappears if your surviving spouse is not a citizen, and property you still own in your home country answers to that country’s inheritance law. Estate planning for non-citizens is mostly about identifying which of these rules apply to you and drafting around them before they cost your family money or control.

Estate planning for non-citizens starts with domicile

The IRS asks whether you were domiciled in the United States at death, meaning you lived here with no present intention of leaving. A green card is strong evidence of domicile but not conclusive, and a long-term visa holder with a home, family, and business here can be a domiciliary too. A U.S. domiciliary is taxed on worldwide assets and receives the full federal exemption. A non-domiciliary is taxed only on U.S.-situs assets, such as real estate here and shares of U.S. companies, but with a far smaller statutory exemption that has not been indexed for inflation in decades. The difference in outcomes is large enough that we address domicile first in every non-citizen plan drafted through our trusts and estates practice.

Some countries have estate or gift tax treaties with the United States that change the situs rules or extend relief; many do not. Treaty analysis belongs to the specific country, so we ask early where the client is a citizen and where the assets sit.

The non-citizen spouse problem

A citizen can leave an unlimited amount to a citizen spouse free of estate tax. That marital deduction is not available for transfers to a spouse who is not a U.S. citizen, even if the spouse holds a green card and has lived here for decades. Congress worried that a non-citizen spouse could inherit tax-free and then leave the country with the assets.

There are two fixes. The first is a qualified domestic trust, or QDOT, which holds the inheritance for the surviving spouse under a U.S. trustee and defers the estate tax until principal is distributed or the spouse dies. The second is for the surviving spouse to become a citizen before the estate tax return is filed, which restores the deduction. Lifetime gifts to a non-citizen spouse are also capped at a special annual amount, higher than the ordinary annual exclusion but far from unlimited. Our post on lifetime gifting to reduce a taxable estate explains how the exclusions work.

Whether any of this matters depends on whether your combined estate approaches the exemption. For many families it does not, and the plan can note the issue and move on. For a family with a business, several properties, or assets abroad, it drives the structure.

Property in your home country

A U.S. will can dispose of property anywhere, but whether the country where the property sits will honor it is a separate question. Many civil-law countries apply forced heirship, reserving a fixed share for children or a spouse regardless of what any will says. Real estate is governed by the law of the place where it is located. The usual answer is a coordinated set of wills: one for U.S. assets, one drafted by local counsel for assets in the other country, each written so that it does not accidentally revoke the other. The same coordination applies to real estate held in several U.S. states, as our post on planning for property in more than one state explains.

Foreign accounts and entities also carry U.S. reporting obligations during your life, and your executor inherits those obligations. An inventory that lists every foreign holding, with account numbers and local contacts, saves the estate months of guesswork.

Who can serve as your executor or guardian

The people a non-citizen would naturally name as fiduciaries often live abroad, and state law may limit them. New York generally will not let a non-citizen who lives outside the United States serve as sole executor; a resident co-executor solves it. Virginia and DC permit nonresident personal representatives but add conditions, such as appointing a local agent for service of process or posting a bond. Trustees face similar questions, and a trust with a foreign trustee can be treated as a foreign trust for tax purposes, with its own reporting burden. Our wills, trusts, and probate administration team checks these eligibility rules before a name goes into the document.

Guardianship of minor children raises a practical issue rather than a legal bar. A court in Virginia, DC, or New York can appoint a guardian who lives abroad, but the children would then relocate, and their own immigration status, schooling, and the other parent’s rights all come into play. Name the person you trust and name a U.S.-based alternate, and ask about a standby arrangement through our legal guardianship practice if the children’s immediate care would otherwise be uncertain.

Immigration status and incapacity planning

A durable power of attorney and a health care directive matter even more for a non-citizen, because immigration filings have deadlines that do not pause for a hospital stay. An agent with authority to deal with USCIS, sign forms, and manage a business keeps a pending case alive. Make sure the power of attorney specifically authorizes immigration and tax matters, since generic forms often omit them.

What to do before your status changes

Naturalization, abandonment of a green card, or a move back home each reset the analysis. Becoming a citizen restores the marital deduction and simplifies the plan. Leaving the United States after long-term residence can trigger an exit tax regime and affect how gifts and bequests to U.S. family members are taxed. If a change is coming, the plan should be reviewed before it happens, when more options are open.

If you are building an estate plan on a green card or visa, a consultation with Capitol Law Partners can show where the non-citizen rules apply to your family and how to draft around them. Schedule a consultation.

This article is for informational purposes only and does not constitute legal advice. No attorney-client relationship is formed by this communication.

Attorney Sena Sahin. Clear advice for individuals, families, and business owners.

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