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Question for the Money Doctors

Question submitted on Feb 26, 2014.

Question

We are a family holding green cards. How does the law impact us on estate planning?

Answer

Families where one or both spouses are holding green cards need to pay attention to planning for estate taxation. The good news is that through proper planning, estate taxation can be mitigated, and through the attainment of citizenship, the estate tax issues unique to green card holders can be mitigated at the death of one of the spouses. One key issue is that there is no unlimited marital deduction for non-citizen spouses. Another issue is the potential devastating impact of holding life insurance in the wrong ownership. How a home is owned is important to consider as well. Resident green card holders are generally taxed on global assets, and under certain circumstances may pay significantly more in estate taxes than their country of citizenship.

If a resident green card holder moves outside the United States and is no longer a resident green card holder, there are additional considerations on the impact of estate taxation on property that remains in the United States, such as a condo in Manhattan.

Because facts and circumstances vary widely, and the solutions are dependent upon the specific circumstances, it pays to seek the professional guidance of a CPA/Financial Planner that has expertise in cross border planning as well as an attorney that likewise has that same expertise. Visit www.findacpapfs.org to find a CPA/PFS near you.


For additional information visit http://www.360financialliteracy.org/