tax ramifications of noncitizen married to citizen
i understand there is a tax liability for the
surviving member of a marriage if one partner is not a
u.s. citizen. is this so? what is the liability?
can the liability be avoided by becoming a u.s.
citizen? is the liability avoided at the time one
applies for u.s. citizenship or would the benefit only
be realized once citizenship had been obtained? we
are married 25 yrs. wife is natural u.s. citizen;
husband has been resident alien since 1971 and is a
physician; they have 3 children (1 adult, 2 minors).
2 Answers from Attorneys
Re: tax ramifications of noncitizen married to citizen
Right ... by default, a foreign citizen does not qualify for "marital deduction" which means that a gift upon your death to your foreign wife does not pass free of federal estate tax. To the extent that your worldly possessions (including real estate value AND FACE VALUE of life insurance policies on your life!!) exceed roughly $700,000, a tax would be incurred at that time which STARTS at 40% and goes up to 55% !!! However, there are several major ways to reduce that tax. One -- and by no means the sole solution -- is a QDOT (Qualified Domestic Trust) in which a trust is set up for the foreigner but there would be a domestic trustee involved. This is major, but if your combined estate (yours and your wife's added together) are worth something in the typical $1,000,000 to $2,000,000 range, then there are probably even better ways to reduce the tax.
Becoming a citizen is a good idea and would also obviate the need to use a QDOT, but, depending on the size of your combined estate, you would still need to do some other estate planning.
Re: tax ramifications of noncitizen married to citizen
I think I saw that you are in Missouri. I know several good (and a couple excellent) estate planning attorneys there mostly in Greater St. Louis, but a few outside. Write to me what city you are in and I'll make a referral.
Use [email protected] and identify yourself (or forward this e-mail along with your answer) because I now don't know who you are.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
