International & Cross-Border Estate Planning

What International Estate Planning Actually Is

International estate planning is the work of making one plan hold together across countries that each claim authority over part of it. Nothing about it is exotic. Cross-border planning is the ordinary business of wills, trusts, deeds and beneficiary forms, done in a setting where more than one legal system gets a vote and none of them checks with the others first. Because none of them checks, the same handful of structural problems shows up in almost every cross-border family, whichever countries are involved.

• Situs, meaning where an asset sits in law. Land answers to the country it lies in, and accounts, shares and personal property each have their own rules for where the law considers them to be. Situs decides whose law governs which asset, and most of what follows grows out of it.
• Documents that conflict, or quietly cancel each other. A will signed in one country can revoke the will signed in another, usually by accident, through one line of standard wording. Our guide to two wills in two countries covers that accident.
• Forced heirship, and systems that do not recognise trusts. Many countries reserve a fixed share of an estate for children or a spouse whatever your document says, and a trust that works perfectly in Florida can be meaningless over foreign land.
• More than one probate. Each country tends to run its own court process over the property inside its borders, so one death can mean two files, two timetables, and a lawyer in each place.
• Two tax systems reaching for the same asset. The US taxes its citizens and residents on worldwide assets and taxes foreigners on US-situs property, while the other country runs its own version of the same rule. Treaties resolve some of the overlap, and most countries have none with the US.

The working model that answers all five is the same one every time. We build the US and Florida plan here, and coordinate it with a lawyer admitted in each other country, because nobody should be opining on the law of a place they cannot practise in. Our job is to hold the whole picture, draft the American side so that it says exactly what it should about the foreign side, and make sure each lawyer knows what the other one signed. Everything below is a specific trap that lives inside that frame.

Who This Is For: Four Cross-Border Situations

Cross-border planning starts with one question that drives everything. Where do you and your assets sit relative to the US tax system? Most people who need this page fall into one of four situations, and each has a different trap.

• You are a US citizen or green-card holder married to a non-citizen. The usual "leave everything to my spouse tax-free" rule does not apply to a non-citizen spouse. See the QDOT below.
• You live abroad and own a Florida condo or US stock. You are a non-resident alien, and the US taxes that property at death with only a $60,000 exemption.
• You are a US citizen living overseas (including American olim in Israel). The US still taxes your worldwide income and estate, and the reporting rules are where families get hurt.
• You are a foreign buyer or seller of Florida real estate. FIRPTA withholding and situs planning decide what you keep.

All four situations bite well below the roughly $15 million federal exemption that most US families never have to think about. A non-citizen spouse and a non-resident owner both have real exposure at far lower numbers.

Your Wills and Documents Across Two Countries

The documents come first, because they are where the accidents happen and they are the cheapest thing on this page to get right. Most cross-border families end up holding more than one will, and that is usually sound. A local will for local land moves through the local system faster and cheaper than a foreign document ever will.

The trouble is the line almost every will template opens with, the one where the signer revokes all former wills. Under Florida law a later will that merely says something different revokes the earlier one only so far as the two actually conflict, so a foreign will that never mentions your Florida house generally leaves that gift standing. A later will carrying an express revocation clause is a different animal, and it can cancel the earlier one outright, in whichever country it was signed. What Florida courts do when that later will is then attacked turns out to be genuinely unsettled, and we set out the authorities, the district split, and a sentence of Florida law that no court appears ever to have used, in our guide to two wills in two countries.

Two related points catch people out. Florida honours a will made by a nonresident if it was valid where it was signed, with one hard exception, because it refuses a handwritten unwitnessed will and an oral will however valid they are at home (see handwritten wills in Florida). And a foreign will still has to reach a Florida judge, which has its own machinery, including a route built for a will that a foreign notary is legally required to keep. Running the other way, foreign property usually means a second probate abroad, and our ancillary probate guide covers the mirror-image Florida case. Small changes belong in a properly signed codicil, never in handwriting on the will itself, and the signing formalities that make any of it hold are in our Florida wills guide.

Your Non-Citizen Spouse and the QDOT

If your spouse is not a US citizen, the unlimited marital deduction does not apply, so a taxable estate can owe federal estate tax at the first death instead of deferring it. The fix is usually a Qualified Domestic Trust (a QDOT). Your assets pass into the trust, your spouse receives the income for life, and the estate tax is deferred until the trust pays out principal or your spouse dies. Your spouse can also solve it by becoming a US citizen before the estate-tax return is due.

Two more points catch people. Lifetime gifts to a non-citizen spouse are capped (at $194,000 for 2026, not unlimited), and a marital trust drafted under another state's standard form usually is not a valid QDOT. We screen this for every mixed-citizenship couple, even below the federal exemption, because citizenship status can change the answer. Read the full QDOT and non-citizen guide →

Non-Resident Aliens: The $60,000 Estate-Tax Trap

A non-resident alien (someone who is neither a US citizen nor a US domiciliary) is taxed only on US-situs assets, but the exemption is brutal, just $60,000, with roughly 40% applying above that, and Form 706-NA due nine months after death. A non-resident gets no portability and no lifetime gift exemption beyond the annual exclusion.

What counts as US-situs matters enormously. US real estate, tangible property located here, and shares of US corporations are US-situs. Stock in a foreign corporation, foreign real estate, and US life insurance on your own life are not. The gap between those two lists is the heart of the planning. A foreign company can hold the US real estate so the asset becomes foreign stock, US life insurance can pass free of US estate tax, and a non-resident can even gift US stock free of US gift tax (intangibles are not US-situs for gifts). Each of those structures carries a real trap (a single share of US stock can taint a trust forever), so the larger ones are co-counseled with an international tax advisor. A US estate or gift tax treaty, where your country has one, can raise the exemption or shift the taxing right. For the full investor playbook, what is US-situs, how the graduated tax really computes, blockers, and Form 706-NA, see our guide to US estate tax for non-resident aliens. Canadians get their own, much friendlier answer under the treaty; see our Canadian snowbird guide and US estate tax for Canadians. If you are moving to the US rather than investing from abroad, see pre-immigration tax planning.

FIRPTA: Foreign Owners of US Real Estate

FIRPTA is the law that makes sure a foreign person pays US tax on the gain from selling US real estate. The law does this by forcing the buyer to withhold 15% of the gross sale price at closing and send it to the IRS, regardless of your actual gain. On a sale where the real tax is far lower, that withholding can tie up a large amount of your money for a year or more.

You are not stuck with it. By applying for a withholding certificate (Form 8288-B) before or at closing, you can reduce the withholding to your actual expected tax, and you recover any excess by filing a US return. Residence rules also help. If the buyer will use the property as a home, withholding drops to zero on a sale of $300,000 or less, and to 10% instead of 15% on a sale between $300,000 and $1,000,000. The key is to plan the sale before the closing, not after the money is already withheld. For foreign buyers, how you take title in the first place affects both this and your eventual estate tax. For the full mechanics, the 8288-B timeline, and the residence exemptions, see our guide to FIRPTA withholding.

FBAR, FATCA, and the Reporting Minefield

For Americans with anything abroad, the reporting rules cause more damage than the actual tax. Here are the main ones.

• FBAR (FinCEN Form 114). Required if your foreign financial accounts together exceed $10,000 at any point in the year. Penalties are steep and, for willful failures, can reach a percentage of the account balance.
• FATCA (Form 8938). A separate IRS report of foreign financial assets above higher thresholds. You can owe both an FBAR and an 8938 for the same accounts.
• Foreign companies (Form 5471) and foreign trusts and large foreign gifts (Forms 3520 and 3520-A) each carry their own filings. Foreign-company and foreign-trust failures carry penalties that start at $10,000, while an unreported large foreign gift is penalized at 5% a month, up to 25% of the gift.

If you are behind, there are real fixes scaled to fault. The Streamlined Filing Compliance Procedures resolve most non-willful cases with a small penalty or none; willful cases use the Voluntary Disclosure Practice, which we handle in-house. The one move to avoid is a "quiet disclosure," where you simply file old forms and hope, because the IRS flags it and it can turn a fixable problem into an enforcement case. We screen willful versus non-willful first, because that single question decides the path. For the full map of which form each foreign asset triggers, and how to fix a late filing, see our guide to foreign account and asset reporting. Go deeper on each with Form 8938 vs the FBAR, the streamlined procedures to fix late filings, FBAR penalties, reporting a foreign inheritance, the Form 5471 foreign-corporation return, the Form 3520 foreign-gift penalty, the FATCA and Form 8938 filing rules, how the US taxes a foreign trust (Forms 3520 and 3520-A), the willful vs non-willful line, and the FBAR statute of limitations.

Cross-Border Loans and the Profit-Participation Trap

Here is a trap that catches foreign investors and the people who borrow from them. A foreign lender who makes a clean, fixed-rate loan into US real estate or a US business is usually taxed at zero on the interest and files nothing in the US. The clean result vanishes the moment the loan also hands the lender a share of the upside. Tie the return to the borrower's profits, cash flow, distributions, or the property's appreciation, an equity kicker, a profit share, a right to convert into shares, and the deal is no longer treated as a simple loan.

Once that line is crossed, the consequences stack up. The interest can lose its tax-free status and be taxed at the full US rate, and a tax treaty usually only softens that, it rarely restores the zero. If the loan shares in the upside of US real estate, the whole loan can be pulled into FIRPTA, the regime that taxes foreign owners of US property. And if the deal looks enough like ownership, the IRS can treat the loan as equity outright, so the interest becomes a taxable distribution. US tax follows the substance of the deal, not the label on the document, and even a small participation feature can taint the entire loan.

The filings are unforgiving, and they land on the US borrower as much as the foreign lender. A US payer who gets the withholding wrong can be left personally liable for the tax it failed to collect, plus penalties, even on a loan it believed was tax-free. The mirror image bites in the other direction too, a US person who lends to or takes a stake in a foreign company runs into a separate set of US filings and can owe current tax on that company's earnings. Either way, the difference between a clean cross-border loan and a costly trap lives in how the loan is structured and worded, before anyone signs or wires the money, not patched up afterward. We spot the issue and co-counsel an international tax advisor on the structure. For the full lender playbook, the four requirements, the estate-tax win, and the Florida mechanics, see our guide to the portfolio interest exemption.

Americans Abroad and Olim

If you are a US citizen living overseas, including the many Americans who have made aliyah to Israel, the US still taxes your worldwide income and your worldwide estate, even on money that never touches the country. Two gaps cause the most trouble. First, the reporting above (FBAR, FATCA, 3520) follows you abroad, and years of innocent non-filing are common and fixable through the streamlined route. Second, a US will or trust often cannot transfer your foreign home, and many countries apply forced-heirship rules or do not recognize trusts at all, so your foreign assets can need a separate probate and may not pass the way you intended.

The cure is to coordinate both sides. Keep the US reporting current, and use a local will or structure for foreign property, vetted against that country's law before you rely on it. We do this regularly for Americans in Israel. See the American-in-Israel paperwork guide → and estate planning for olim → Americans holding Israeli investment funds also face the PFIC tax trap, and their Israeli retirement money carries a separate US tax and reporting problem.

Giving Up Citizenship or a Green Card

Expatriating (renouncing US citizenship or giving up a long-held green card) is not just a trip to a consulate. If you are a covered expatriate, broadly someone with a net worth of $2 million or more, a high average income-tax bill, or who cannot certify five years of US tax compliance, the §877A exit tax treats almost everything you own as sold the day before you leave and taxes the built-in gain. Worse for your family, a later gift or bequest from you to a US person can carry its own transfer tax under §2801.

You report the expatriation on Form 8854. Because the exit tax turns on your status on the day you expatriate, the planning (gifting down, timing, fixing compliance gaps so you are not "covered") has to happen before you renounce. After is too late. For the three covered-expatriate tests, the green-card 8-of-15 trap, and the retirement-account hit, see our full guide to the US exit tax. And if the expatriate is your parent or grandparent, the exposure is yours, because the Section 2801 forever tax puts a 40% tax on the US family member who receives their gifts and bequests, for life.

Do I Need a Lawyer in Each Country?

People ask me who handles the foreign side, and the honest answer is that a lawyer admitted in that country does, and I coordinate the two. Cross-border work covers a wide range, so we are honest about where our role sits. The estate-planning documents, the Florida side, FBAR and disclosure cleanup, FIRPTA, foreign-gift and trust reporting, and the screening that tells you what you actually face are all handled here, on flat fees quoted up front for document work. For high-net-worth inbound "blocker" structures, treaty positions, and expatriation tax modeling, we co-counsel with an international tax advisor so you get the right depth without paying for the wrong tool.

Foreign law itself sits outside that line, and we say so plainly. Where your plan depends on what the law of another country does, we work alongside a lawyer admitted there, tell them in writing what the Florida documents do and what they deliberately leave alone, and ask for the same back. We do not opine on the law of a country we are not admitted in, and you should be wary of anyone who does.

Most of this is done by phone and video, which fits clients who are out of state or out of the country. If you are moving to Florida, the first step is usually to establish Florida domicile and re-do your plan under Florida law. And when the question is tax structure rather than the estate plan itself, lending, funds, pensions, a move in or out of the US, start at our international tax planning hub.

Frequently Asked Questions

Common Situations

The Israeli condo buyer. A family in Tel Aviv buys a Naples vacation condo in their own names. The family does not realize that at death the US would tax it with only a $60,000 exemption, and that selling later triggers 15% FIRPTA withholding. Planning the ownership structure up front fixes both.

The green-card holder with a non-citizen spouse. A couple assumes the survivor inherits everything tax-free. Because the surviving spouse is not a citizen, a taxable estate would owe at the first death. A QDOT (or a path to citizenship) defers it.

The American in Israel with old accounts. An oleh discovers eight years of unfiled FBARs on ordinary Israeli bank and pension accounts. Because the failure was innocent, the Streamlined Filing Compliance Procedures clear it with little or no penalty, and a quiet disclosure would have made it worse.

Sources of Law

• Wills across borders: Fla. Stat. §732.502(2) (a nonresident’s will, other than a holographic or nuncupative one, is valid here if valid where executed), §732.505(1) and (2) (a later inconsistent will revokes only so far as the inconsistency; express revocation requires will formalities), §732.5165 (fraud, duress, mistake and undue influence), §733.205 (probate of a notarial will, authenticated by an American consular officer or under the Hague Convention of 1961), §734.104 (a nonresident's foreign will admitted to record to pass Florida real property). Authorities, the certified conflict between the Second and Fifth Districts, and our own review findings are set out on two wills in two countries. (retrieved 2026-08-19)
• Non-citizen spouse and QDOT: IRC §2056(d), §2056A; Treas. Reg. §20.2056A-2; 2026 spousal gift exclusion $194,000.
• Non-resident alien estate tax: IRC §§2101 to 2108, §2104(b) (situs), §§2104 to 2105 (situs lists); $60,000 exemption; Form 706-NA. irs.gov
• FIRPTA: IRC §897, §1445; 15% withholding; Forms 8288 and 8288-B.
• Reporting: FBAR, 31 U.S.C. §5314 (FinCEN Form 114); FATCA, Form 8938; Form 5471; Forms 3520 and 3520-A.
• Cross-border loans and participation features: IRC §§871(h), 881(c) (portfolio-interest exemption and the §871(h)(4) contingent-interest carve-out for profit, cash-flow, or appreciation-linked returns); Treas. Reg. §1.897-1(d) (a loan sharing real-property upside is a USRPI, FIRPTA §§897, 1445); §385 and Estate of Mixon, 464 F.2d 394 (5th Cir. 1972) (debt versus equity); §7701(l), Treas. Reg. §1.881-3 (anti-conduit); §1461 (withholding-agent liability); Forms 1042, 1042-S, 8288. The outbound mirror: IRC §§951 to 951A, 957, 958 (controlled foreign corporation) and §6038 (Form 5471). Characterization follows economic substance, not the label.
• The non-resident who held US stock in his own name: Estate of Charania v. Commissioner, 133 T.C. 122 (2009) (250,000 Citigroup shares registered in the name of a Belgian resident included in full; the marital property regime was fixed by the law of the matrimonial domicile at marriage, under English conflict rules applied through Belgian conflict rules; the §6651(a)(1) late-filing addition sustained, legal complexity and the forming of a QDOT not being reasonable cause). Read in full. (retrieved 2026-09-03)
• Expatriation: IRC §877A (exit tax), §2801 (covered-gift tax); Form 8854. (retrieved 2026-07-11)

What One Tax Court Case Shows About Owning US Stock From Abroad

I will tell you when you do not need me, because I have also seen people buy planning they had no use for. Whether a cross-border family needs any of this comes down to three facts, which are the citizenship of the surviving spouse, the country each of you is domiciled in, and which assets the United States counts as sitting inside its borders. A couple with two US passports and nothing abroad can stop reading here, and I say so at the consult.

Many cases like this keep coming up with a foreign owner who holds US shares or a Florida home in his own name, and the United States Tax Court decided one in 2009 that I would hand to any non-resident with an American brokerage account. A husband and wife, both British citizens born in Uganda, married there in 1967 without a marriage contract. In 1972 the government gave people of Asian descent three months to leave the country, and the family left that October with nothing, because everything they owned inside Uganda was seized. They rebuilt in Belgium, the home of the shipping company he had represented in Uganda. In 1997 he bought 50,000 shares of Citicorp through a safekeeping account at a Belgian bank (the kind of blue-chip purchase a careful man makes with money he has earned twice), and by the time he died in January 2002 a merger, a stock dividend and a split had turned them into 250,000 shares of Citigroup, registered in his name and worth $11,790,000. Belgian law let a married couple change to a community property regime by a procedure during the marriage, and in nearly thirty years in Belgium they never used it. His estate reported half the shares to the IRS on the footing that the other half had always been his wife's. The Tax Court held that the couple's property rights had been fixed by the law of the place they married, that the forced move to Belgium had not changed them, and that all 250,000 shares belonged to him. The deficiency was $2,070,000.01 on top of the $1,150,732.33 the estate had already paid, plus a late-filing addition of 5 percent a month up to 25 percent, because the return arrived a year after the extended deadline. The notice came in 2007 and the decision in 2009, seven years after his death.

In reading that opinion, I have a few take-home points.

The first is the name on the account, and it is the first thing I check with a non-resident client. A non-resident who holds shares of a US company in his own name has a US estate the day he buys them, with a $60,000 exemption and about 40 percent above it, and no argument about marital property changes which side of that line the shares sit on. Shares of a company organized outside the United States are not US-situs property. The practice pointer is that the same 250,000 shares held through a foreign holding company would have been outside the US estate entirely, and that the time to decide how a non-resident takes title is before the purchase, because moving US stock afterward has rules of its own.

Second, the foreign paperwork decided the American tax. The whole case turned on a marriage in Uganda in 1967 and a Belgian election the couple never made, and the court worked through English conflict-of-laws cases going back to 1804 and a Law Library of Congress report to find which country's rule applied. At a first meeting with a cross-border couple I ask where they married, whether they signed a marriage contract, and whether they ever changed their property regime, because the answers decide who owns what before any US rule is reached. The practice pointer is that a filing in the country where you live can cut a US estate in half, and that nobody in the United States will tell you to make it.

Third, the deadlines do not wait for the hard question. The estate got an extension to file, no extension to pay, and then filed a year late while its lawyers worked out the ownership question and set up a qualified domestic trust for the widow. The court held that legal complexity and the work of forming the trust were not reasonable cause, and that a return has to be filed on the extended date as complete as it can be made, with the argument attached to it. The practice pointer is that Form 706-NA is due nine months after death, that an extension of time to file is not an extension of time to pay, and that I file on the best number available that day and argue afterward.

Avoid a US brokerage account or a Florida deed in the personal name of someone who is neither a US citizen nor domiciled here without first running the estate-tax arithmetic, because the exemption on that account is $60,000 and everything above it is taxed before anyone reaches the question of whose property it was. What the right structure would have done for that family is arithmetic too. Half the shares, which is what a Belgian election would have secured, was $5,895,000 less in the US estate, and a foreign holding company would have taken the full $11,790,000 out of it. I quote that structure at the consult, and the consult itself is free.

What that case does not decide is the marital deduction. The widow signed the qualified domestic trust agreement in December 2003, twenty-two months after her husband died, and the court ruled only on whose shares they were and on the late return, so nobody can read the opinion as a rule on how late a QDOT can be. I would not build a plan on the timing that family used, and I will tell you plainly when a question like that has no decided answer.

Kevin D. Klagge, Esq., admitted in Florida since 2012. The case described above is a decision of the United States Tax Court rather than a matter handled by this firm. Past results do not guarantee a similar outcome.

Updated on September 3, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. Attorney Kevin Klagge represents families, businesses, and international clients in estate and tax planning, business structuring, and international law, with a focus on Florida legal tools. He litigates estate and business issues in court. This article is general information about US and Florida law, not legal or tax advice, and does not create an attorney-client relationship. Cross-border tax is specialized; for high-net-worth structures, treaty positions, and expatriation we co-counsel an international tax advisor. Your result depends on your specific facts.