Estate tax trap for non-citizens

As Alpharetta, Georgia, probate attorneys at the Tieger Law Center rightly report this week, estate taxes can be devastating to non-US citizens. 

The reason is that most U.S. citizens' estates currently pay no taxes on the first $5 million of the inheritance. Not so for non-citizens, where every dime after $60,000 is presently taxed at a 35% rate.

The “logic” behind this policy works in the case of foreign nationals who earned money abroad all their lives, brought it into the U.S., and then died. Less so for the more typical case of a foreigner who lived and worked in the U.S. for decades, paid taxes during his lifetime just like an American, and then leaves a modest estate worth more than $60,000.

The author of Tieger Law Center’s blog post recommends gifting using offshore family corporations. Other approaches to the problem abound, but key to all of them is beginning to plan early.

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Tanner Pittman, LLC is an estate planning and probate law firm that assists clients in the LaGrange, Newnan, Columbus, and Metro Atlanta areas.