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Estate Planning with a Non-Citizen Spouse

Nashville Attorneys Helping You Protect the Future of Your Loved Ones

Depending on your situation, planning your estate may be extremely complex or relatively simple. However, some additional considerations may be necessary when one spouse is not a United States citizen. The Nashville estate planning lawyers at Martin Heller Potempa & Sheppard PLLC offer seasoned and dedicated legal advice for any estate planning matters that are unique to your situation. Estate planning with a non-citizen spouse, for example, may involve certain tax considerations. Our attorneys have extensive experience advising clients regarding these specific issues, as well as making sure that the proper documents are in place to serve their best interests. If you need assistance in executing a trust or will, or you need any other estate planning service, contact our office today to find out more about your options.

Estate Planning with a Non-Citizen Spouse

When planning your estate, fundamental decisions must be made. Regardless of citizenship, both spouses should execute either a will or a trust that designates which beneficiaries will receive assets upon their death. Additionally, appointing powers of attorney for both financial and health decisions is important in making sure that proper decisions regarding these matters are made. In Tennessee, executing powers of attorney in combination with a living will creates an advanced care plan that comprehensively carries out individuals’ wishes in the event that they become incapacitated.

The first question that many people may have when considering an estate plan involving a non-citizen spouse is whether or not that spouse is entitled to inherit a U.S. citizen’s property. Any individual, regardless of citizenship, may inherit property when named as a beneficiary. Life insurance policies, trusts, and retirement funds may all be designated in a non-citizen spouse’s name. However, assets left to a non-citizen spouse may be subject to certain taxes.

Pursuant to the unlimited marital deduction, property left to a surviving spouse is not subject to federal estate taxes, regardless of their worth, as long as the surviving spouse is a United States citizen. However, this deduction is not available for non-citizen spouses, even if they have status as a permanent resident. Gifts are also treated differently for U.S. and non-U.S. citizens. Usually, gifts given between spouses are not subject to the federal gift tax. But, when one spouse is a non-citizen, that tax-free status is limited to an amount of $149,000 per year.

If estate taxes are an issue given your income, there are options available to minimize the costs of such a burden. One option is for a non-citizen spouse to become a U.S. citizen, which must be done by the time that an estate’s tax return is due, which is usually nine months after a decedent’s death. Sometimes, the Internal Revenue Service will grant a six-month extension to this deadline, depending on the circumstances. Additionally, estate taxes may be avoided by establishing a qualified domestic trust. If assets are distributed to this type of trust, instead of going directly to a beneficiary-spouse, they are not subject to the same tax requirements. These matters may become quite complex, especially if a significant amount of money is involved. Consulting a knowledgeable trusts and estates attorney is advisable to ensure that the proper instruments are in place to protect your family.

Explore Your Estate Planning Options with a Nashville Lawyer

Planning your family’s future is an important endeavor, and it may require additional considerations when international parties are involved. The Nashville attorneys at Martin Heller Potempa & Sheppard PLLC are well-versed in estate planning with a non-citizen spouse. We can help you determine which legal protections may be right for you and ensure that they are carried out properly. Our firm represents individuals throughout Williamson and Davidson Counties, including in Franklin, Hillsboro Village, West Meade, Hermitage, Brentwood, and Cool Springs. If you need assistance with planning your estate, contact us online or call us at 615-800-7096 to learn more about the services that our probate lawyers provide.