Non-Citizen Issues

Non-citizens are subject to different tax rules than U.S. citizens. This can create very large tax bills for the unaware.

For example, the non-citizen’s status for estate and gift tax purposes may be very different than their status for income tax purposes. Having a green card does not determine domicile for estate tax purposes. Failure to properly plan may result in the non-citizen only receiving a $60,000 estate tax exemption and no marital deduction. In other words, almost everything owned will be taxed upon death before it goes to the spouse and children.

Most estate planning attorneys do not understand how to plan for the non-citizen client. The Sheffield Law Office has developed an expertise in helping non-citizen clients effectively address these circumstances and avoid the devastating effect of the taxes imposed on their death.

For example:

• The Sheffield Law Office helps clients take advantage of treaty protections between the United States and their country of origin (if available). However, failure to plan may result in the loss of treaty protection in many cases.
• Generally, the non-citizen spouse will not qualify for a marital deduction on gift or estate taxes; however, we help the noncitizen client create special trusts to qualify for the marital deduction (QDOT) or, using lifetime giving strategies, to plan so no marital deduction is necessary.

If the non-citizen spouse will be inheriting any retirement plan assets or joint tenancy property, special planning is required.

• For the non-resident alien client, we advise them on how to best hold title to their property so that it will not be subject to estate and gift tax. We also advise clients on how to establish foreign trusts to keep their property from being subject to U.S. taxes and on the best methods for leaving their property to their children.