Author credentials
With over 15 years as a Certified Financial Planner (CFP®) and CPA advising internationally mobile clients, I’ve overseen dozens of estate plans that touch multiple tax jurisdictions. The examples and strategies below reflect practical, documented approaches that reduce surprise taxes, probate delays, and legal friction across borders.
Why this matters
Assets held in more than one country—real estate, brokerage accounts, pensions, business interests and digital assets—are governed by different legal systems. That creates four common risks: (1) duplicate or unforeseen taxation, (2) conflicting laws about who inherits, (3) multiple probate or succession processes, and (4) administrative delays that reduce estate value. Early planning reduces these risks and can preserve more wealth for heirs.
Key cross-border issues to address
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Residency, domicile and tax status: Countries define estate and inheritance taxes by residency, nationality or domicile. Your U.S. tax obligations differ if you are a U.S. citizen, a green card holder, a U.S. resident for tax purposes, or a nonresident. (See IRS guidance on estate tax and international taxpayers: https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax.)
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Probate and succession systems: Civil-law countries (e.g., much of continental Europe, Latin America) often use forced‑heirship rules that limit how you can distribute assets; common-law countries (e.g., U.S., U.K., Canada) give more testamentary freedom. Reconciling a U.S. will with a country that enforces forced heirship is a common planning challenge.
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Double taxation and tax credits: Two countries may claim tax on the same asset transfer. Tax treaties and domestic credits can reduce double taxation, but treaty language varies—don’t assume automatic relief. The OECD and national tax authorities publish treaty information useful for planning (see OECD Model Tax Convention and U.S. tax treaty resources).
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Ownership form matters: Joint tenancy, tenancy in common, corporate ownership, nominee arrangements, and beneficiary designations can trigger different local rules on transfer and tax. For example, jointly titled real estate in one country might pass outside probate but could create unintended tax consequences for beneficiaries.
Practical estate tools used internationally
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Local wills in each jurisdiction: A will governed by local law minimizes conflict in probate. Many practitioners recommend a simple, narrow local will that covers only assets within that country in addition to a primary will in your home jurisdiction.
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Trusts and international trust structures: Trusts can avoid probate and provide flexible distribution rules, but cross-border trust planning is complex. Some jurisdictions treat foreign trusts as transparent (pass-through) for tax while others tax trust income or distributions. Work with a trust specialist who understands the tax treatment in both the settlor’s and beneficiaries’ countries.
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Beneficiary designations and nonprobate transfers: Retirement accounts, life insurance, and transfer-on-death (TOD) registrations often pass outside probate. Confirm whether local law recognizes these designations and whether they create tax obligations on receipt.
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Corporate or partnership wrappers: Holding foreign real estate or business interests inside a local corporation or partnership may simplify transfer and succession, but it can also create corporate-level taxes, reporting obligations, and foreign reporting for U.S. taxpayers (e.g., Forms 8938, FBAR). Consult a cross-border tax specialist.
Tax treaties, credits, and avoiding double taxation
Tax treaties frequently address estate, inheritance, and gift taxes, but coverage is uneven. The U.S. has bilateral estate tax treaties with several countries; treaty provisions may (a) allocate taxing rights, (b) provide credits for taxes paid abroad, or (c) create exemptions for certain assets. Always review the actual treaty text and any implementing domestic law (U.S. treaty summaries and full texts are on the IRS website: https://www.irs.gov/individuals/international-taxpayers/tax-treaties).
If no treaty applies, domestic unilateral relief may exist (e.g., foreign tax credits). In practice, I coordinate with a cross-border tax attorney to map potential taxes in each jurisdiction, then structure ownership and timing to use available credits or exemptions.
U.S.-specific points to watch (for U.S.-connected individuals)
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Estate and gift tax exposure: The U.S. imposes federal estate and gift taxes that can apply to U.S. situs assets held by noncitizens and to worldwide assets of U.S. citizens and residents. The federal exemption amount adjusts annually for inflation; verify current thresholds with the IRS before finalizing a plan (IRS: Estate Tax page: https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax).
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Noncitizen spouse rules: Unlimited marital deduction for estates generally applies only to U.S. citizen spouses. Noncitizen spouses require special planning—qualified domestic trusts (QDOTs) or lifetime portability elections may be relevant. FinHelp resources that expand on these topics include our guide on Green Card Holders and U.S. Estate Tax (link below).
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Reporting requirements: U.S. persons may need to file FBAR, Form 8938, and other disclosures for foreign accounts and foreign trusts—failure to file can lead to steep penalties. See IRS guidance on international reporting.
Coordinating professionals and a planning team
A successful cross-border estate plan usually requires a team: a multinational estate attorney, a cross-border CPA or tax attorney, and local counsel in any country holding significant assets. In my client work, I arrange synchronized retainer agreements and coordinate local counsel so documents are consistent across jurisdictions. One error I consistently see is siloed advice—an estate lawyer who doesn’t consult a tax advisor can produce documents that increase taxes rather than reduce them.
Step-by-step starter checklist
- Inventory assets by country (real estate, bank accounts, investments, pensions, business interests, digital assets). Include title/ownership form and beneficiary designations.
- Determine applicable laws: residency, domicile rules, forced‑heirship rules, probate process and timelines for each jurisdiction.
- Review tax treaties and local inheritance/estate tax rules; calculate potential double taxation scenarios.
- Update wills and consider local wills where needed; align beneficiary designations and TOD registrations with testamentary documents.
- Evaluate trusts, corporate wrappers, or life insurance as tax-efficient transfer tools. Confirm local tax treatment of each structure.
- Coordinate cross-border reporting obligations to reduce penalties.
- Revisit the plan after major life events (citizenship changes, property purchases, moves, births, deaths).
Common mistakes to avoid
- Assuming one will covers all assets. Local wills or protocol can prevent lengthy probate.
- Ignoring forced‑heirship regimes—trying to override local mandatory inheritance rules can be futile and wasteful.
- Overlooking reporting obligations for foreign assets, which can trigger penalties even when no tax is due.
- Failing to review beneficiary designations after moves or citizenship changes.
Brief case examples (anonymized)
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A U.S. citizen with rental property in Portugal: Creating a Portuguese‑law will limited to the property reduced probate delay from months to weeks and clarified tax filing obligations. Coordination with U.S. counsel preserved use of the U.S. estate tax exemption to the extent possible.
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An expatriate with pension rights in Australia and U.S. brokerage accounts: Structuring beneficiary designations and a revocable trust, then consulting Australian tax counsel, avoided double taxation on certain payout events and simplified the payout process for heirs.
Interlinks to useful FinHelp resources
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For strategy on multiple jurisdictions, see our article on cross-border estate planning: Cross-Border Estate Planning: Navigating Multiple Jurisdictions (https://finhelp.io/glossary/cross-border-estate-planning-navigating-multiple-jurisdictions/).
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If your plan involves residency or citizenship issues, our guidance on Green Card holders and noncitizen spouse rules is helpful: Green Card Holders and U.S. Estate Tax: Noncitizen Spouse Considerations (https://finhelp.io/glossary/estate-planning-green-card-holders-and-u-s-estate-tax-noncitizen-spouse-considerations/).
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For digital assets that may be located across borders, review Digital Asset Estate Planning (https://finhelp.io/glossary/digital-asset-estate-planning-passwords-crypto-and-cloud-photos/).
Authoritative sources and further reading
- IRS, Estate Tax: https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax
- IRS, Tax Treaties: https://www.irs.gov/individuals/international-taxpayers/tax-treaties
- OECD, Model Tax Convention and commentaries: https://www.oecd.org/tax/treaties/
- U.S. Tax Guide for Aliens (IRS Publication 519) for residency rules and tax treatment of noncitizens: https://www.irs.gov/publications/p519
Professional disclaimer
This article is educational and does not replace tailored legal or tax advice. International estate planning is highly fact-specific: jurisdictional details, current tax thresholds and treaty interpretations change over time. Consult a qualified estate attorney and cross-border tax advisor before executing or changing any plan.
Final takeaway
International estate planning is less about a single document and more about coordination—titles, wills, trusts, beneficiary designations, and local counsel must work together. Start early, build a qualified team, and review the plan whenever your residency, citizenship, or asset mix changes to protect family wealth across borders.
