Citizenship and Domicile Decide the Tax
US estate tax turns on citizenship and domicile (the place you make your permanent home). A US citizen, or a non-citizen domiciled in the US, has about $15 million exempt. A non-resident who is not a US citizen has $60,000 exempt on US assets. A second rule applies to married couples. When the surviving spouse is not a US citizen, the unlimited marital deduction is lost unless the assets pass into a qualified domestic trust, called a QDOT. Both rules can be planned for during life with a trust and the way US assets are titled.
The $60,000 Exemption for Non-Residents
A non-resident who is not a US citizen is taxed at death on US assets, with an exemption of $60,000 and rates up to 40% above it. The assets that count are "US-situs" property, meaning US real estate, tangible property located in the US and shares of US companies. A foreign parent who owns a $2 million Florida condo, or US stocks in a US brokerage account, is taxed on the value above the first $60,000. A US citizen with the same assets would owe nothing, because the $2 million sits under the $15 million exemption. The way the assets are held can reduce the exposure. The guide to US estate tax for non-resident aliens covers which assets count, the graduated rates, holding companies and Form 706-NA.
The Non-Citizen Spouse Trap, and the QDOT
A US citizen can normally leave everything to a spouse free of estate tax. When the surviving spouse is not a US citizen, that unlimited marital deduction does not apply, so assets above the exemption can be taxed at the first death even though they pass to the spouse. The usual answer is a QDOT, a qualified domestic trust. When the assets pass into a QDOT rather than outright, the marital deduction applies and the tax is deferred while the surviving spouse is alive. Lifetime gifts to a non-citizen spouse are also capped, at $194,000 a year in 2026 rather than unlimited. The cap for each year since 2015 is in our table of cross-border estate and gift figures by year. For a couple where one spouse is not a US citizen, the QDOT is usually the main document in the plan. A couple signing a prenup before the wedding should draft it with these rules in view, and prenups for foreign nationals and E-2 investors explains how the agreement and the QDOT fit together.
The US-Israel Gap (and Other No-Treaty Countries)
The United States has an estate or gift tax treaty with fifteen countries, and only nine of those treaties can raise the $60,000 exemption itself, namely Australia, Canada, Finland, France, Germany, Greece, Italy, Japan and Switzerland. The full list and the formula are here. Israel is on neither list. A US-Israel family therefore gets no treaty relief and is subject to the default non-resident rules, including the $60,000 exemption. The US side of the plan has to be structured under those default rules rather than copied from a standard domestic plan. See our guide for Americans in Israel →
The Other Half: Your US Assets, While You Are Alive and at Death
US assets also raise two problems apart from tax. A US bank or brokerage generally will not honor a foreign power of attorney, so a family abroad may need a US court order to reach the accounts of an owner who becomes incapacitated. At death, US assets pass through US probate in the state where they sit, which is public and slow, unless they are held in a way that avoids it. A US power of attorney with a HIPAA authorization handles incapacity, and a trust usually keeps the US assets out of probate.
A non-citizen spouse, or US assets and a life abroad?
Book a No-Cost Phone Consult with Attorney Kevin D. Klagge, Esq. We review the US side of your plan and coordinate with your advisers at home.
Book a no-cost consultHow Florida Fits a Cross-Border Plan
Florida has no state income or estate tax, and its trust law offers the community property trust and long-duration trusts. With a Florida trustee, a family that lives abroad or in another state can hold its US assets in Florida trusts. We build the US documents and coordinate with your accountant and counsel in Israel or your home country. Married US citizens should also consider portability, the election that passes a deceased spouse's unused exemption to the survivor. The international and cross-border estate planning hub covers the rest of the cross-border work.
Frequently Asked Questions
Why Is Estate Planning Different for Non-US Citizens?
US estate tax turns on citizenship and domicile (the place you make your permanent home). A US citizen, or a non-citizen domiciled in the US, has the full federal exemption, about $15 million in 2026. A non-resident who is not a US citizen has a $60,000 exemption on US assets. A surviving spouse who is not a US citizen does not receive the unlimited marital deduction unless the assets pass into a qualified domestic trust. Two families with the same wealth can owe very different amounts of tax because of these facts.
What Is the $60,000 Estate Tax Trap?
A non-resident who is not a US citizen is taxed at death on US-situs assets, meaning US real estate, tangible property located in the US and shares of US companies. The exemption is $60,000, and rates reach 40% above it. A US citizen with the same assets has about $15 million exempt. A non-resident who owns a $2 million US property is taxed on the value above the first $60,000, and the way the property is held can reduce that exposure.
My Spouse Is Not a US Citizen. What Changes?
The marital deduction changes. A US citizen can normally leave everything to a spouse free of estate tax. When the surviving spouse is not a US citizen, that unlimited deduction does not apply, so assets above the exemption can be taxed at the first death even though they pass to the spouse. A qualified domestic trust (QDOT) restores the deduction and defers the tax. Lifetime gifts to a non-citizen spouse are capped at $194,000 a year in 2026, indexed, rather than unlimited.
What Is a QDOT (Qualified Domestic Trust)?
A QDOT is a trust that lets a surviving spouse who is not a US citizen receive assets while keeping the estate-tax marital deduction. At the first death the assets pass into the QDOT rather than outright to the spouse. The spouse benefits from the trust for life, and the deferred estate tax is collected under specific rules. The trust needs at least one US trustee, among other requirements. For a married couple where one spouse is not a US citizen, the QDOT is usually the main document in the plan.
Is There a Tax Treaty Between the US and Israel?
No. The US has estate or gift tax treaties with fifteen countries, including the UK, Germany, France and Canada, and Israel is not one of them. A US-Israel family therefore gets no treaty relief from the non-resident rules, including the $60,000 exemption. The structuring has to be done under the default US rules.
What Happens to My US Assets if I Live Abroad and Die or Become Incapacitated?
A US bank or brokerage generally will not honor a foreign power of attorney. Without a US power of attorney, your family may need a US court order to reach your US accounts if you become incapacitated. At death, US assets pass through probate in the state where they sit, which is public and slow, unless they are held in a way that avoids it. A US power of attorney and a trust address both problems.
How Does Florida Fit In for a Cross-Border Family?
Florida has no state income or estate tax, and its trust law offers the community property trust and trusts that can last for generations. With a Florida trustee, a family that lives abroad or in another state can hold its US assets in Florida trusts. We build the US documents and coordinate with your accountant and counsel in Israel or your home country.
What Does Cross-Border Estate Planning Cost?
The fee is quoted at the consult, because it depends on your assets, where you and your spouse are citizens and domiciled, and what is at stake. The phone consult costs nothing, and we will tell you what your situation needs.
Common Situations
The mixed-citizenship couple. A US citizen is married to a spouse who never naturalized. Their adviser assumed the unlimited marital deduction applied, but the spouse was not a citizen and the estate faced tax at the first death. A QDOT restored the marital deduction and deferred the tax.
The foreign parent with a Florida condo. A non-resident, non-citizen parent owns a $1.5 million Naples condo. With a $60,000 exemption on US-situs assets, the family faced US estate tax on nearly the full value of the condo. Changing how the property was held reduced the exposure.
The US-Israel family. A couple split between Tel Aviv and the US holds a US IRA and brokerage. With no US power of attorney, an incapacity would have left the US accounts out of the family's reach. We put the US documents and structure in place and coordinated with their Israeli counsel.
Sources of Law
- IRC §2056A (qualified domestic trust / QDOT, preserving the marital deduction for a non-citizen spouse); §§2101 to 2106 (non-resident, non-citizen US-situs estate tax; the §2102(b) unified credit shelters the first $60,000); §2523(i) (annual exclusion for gifts to a non-citizen spouse, $194,000 in 2026, indexed). (retrieved 2026-07-11)
- IRS Form 706-NA: US estate-tax return for non-resident, non-citizen decedents with US-situs assets over the filing threshold. The US has estate/gift tax treaties with a limited set of countries; Israel is not among them.
- Florida imposes no state income or estate tax; Florida Trust Code, Fla. Stat. ch. 736.
Updated on September 23, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. General information about US and Florida law, not legal or tax advice, and no attorney-client relationship is created. Cross-border outcomes depend on citizenship, domicile, treaties, and federal law that may change, and require coordination with counsel in your home country; nothing here is a guarantee. Do not send confidential information until we have agreed to represent you.
