Legal Translation Services and Estate Planning with Non-Citizen Spouses

We’ve blogged about multilingual legal translation services in the context of minimizing gift taxes on overseas transfers and certified online legal translations for international estate and trust attorneys. If a client is married to a non-citizen or non-resident, estate planning becomes more involved, thanks to the estate tax and gift tax laws applicable to non-citizens. Here are some things to keep in mind:

Define Residency

The first step is to determine whether the spouse is a resident. According to the IRS, there are two definitions of residency – one for income tax purposes and another for estate and gift tax purposes. For estate and gift tax purposes, a resident is defined as having ‘an intent to remain in a place indefinitely and no intention to move away from it’. This is important because the main question for exemption levels comes down to where the non-citizen considers home. If a non-citizen does not consider the US ‘home’, they are only entitled to a $60,000 estate tax exemption.

The QDOT

If the spouse is considered a non-resident, he or she is not entitled to claim the standard marital deduction. Instead, one must create a qualified domestic trust (QDOT) that specifically leaves property to the surviving spouse. To do this, the resident/citizen spouse will have to create a trust or will that includes a provision for the creation of the QDOT. In cases where the will is drafted in a foreign jurisdiction and it must be amended to include such a clause, that clause must be added in both the original language and include a foreign language translation.

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