Non-resident aliens with real estate need effective estate plan

On Behalf of | Mar 25, 2015 | Estate Taxes |

The U.S. housing market is finally on the upswing, and one contributing factor could be the uptick in international buyers who are purchasing property in America.

The National Association of Realtors recently reported that real estate sales to international clients increased from $68.2 billion in 2013 to $92.2 billion in 2014, and almost half of those sales involved non-resident aliens.

As LifeHealthPro recently reported, there are several reasons why international clients are deciding to purchase real estate in the U.S., including the country’s stable political and economic environment and the fact that the U.S. allows non-citizens to hold title and own property.

But there are also some potential problems that a non-resident alien (someone who has primary residency in another country and does not have a green card) buying real estate can run into, the article explained, namely: estate tax liabilities.

For example, the current estate tax exemption is currently $5.43 million for both U.S. citizens and green-card holders. But the estate tax exemption for a non-resident foreign alien is a mere $60,000, which results in a tax credit of $13,000 on a property that could be worth millions.

Additionally, the unlimited marital deduction does not apply to property owned by a non-resident foreign alien, even if the surviving spouse is a U.S. citizen or green card holder.

The good news is that these tax liabilities can often be avoided with the help of an estate planning lawyer.

One potential way to fix the problem is by purchasing a life insurance policy to cover the possible estate tax liability since it would not be considered part of the non-resident alien’s U.S. assets.  

For more information, talk to an estate planning attorney in your state.


E-mail Cushing & Dolan

Articles By Our Attorneys


Cushing & Dolan, P.C. | Attorneys At Law

FindLaw Network