The United States has a global economy that draws many from abroad in search of wealth or a better life. However, not all will become citizens and acquire privileges when it comes to tax treatment of estates which could prove expensive. Foreign nationals receive a limited estate tax exemption, $60,000, compared to the $5 million plus that is granted to citizens. In addition, the yearly gift exclusion to a spouse, while remaining $14,000, is capped at a lifetime $147,000 after which tax will be applied. While planning techniques such as trust and offshore investments are available, only the relatively wealthy will truly benefit which leaves many non-citizens in a tough spot. But there is a silver lining for some, Canadians get preferential tax treatment due to a treaty between the countries which goes to show that sometimes being a neighbor has its privileges.
See Miriam Rozen, Special Estate Planning Needs for Foreign Clients, Financial Planning, August 18, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
