Cross-Border Estate Planning
US estate tax, QDOT for non-citizen spouses, foreign situs assets, treaty relief, and dual-jurisdiction succession planning.
Estate Details
Key Concepts
🏛️ QDOT — Qualified Domestic Trust
If your spouse is NOT a US citizen, the unlimited marital deduction doesn't apply. Assets must pass through a QDOT to defer estate tax. The QDOT trustee must be a US person or bank. Tax is assessed when distributions are made from the QDOT.
💵 Unified Credit (2025)
$13.99M estate/gift tax exemption per person ($27.98M married). This is set to sunset to ~$7M in 2026 (absent Congressional action). Use it or lose it.
🌍 Foreign Situs Assets
US citizens are taxed on worldwide estate regardless of where assets are located. Foreign real estate, bank accounts, and business interests all included. FTC available for foreign estate/inheritance taxes paid.
Forced Heirship: Many civil law countries (France, Germany, Spain, UAE) have forced heirship rules that override your will. This creates conflicts with US estate planning. A cross-border will strategy is essential.
Step-Up in Basis: US estate assets receive a step-up to fair market value at death, eliminating unrealised capital gains. This is a powerful planning tool for appreciated foreign assets.