When the aboriginal letter from a clairvoyant came in, I anticipation the catechism was abundant too abstruse for a customer law column: Does the absolute conjugal answer in the federal estate-tax law administer to a apron who is not a U.S. citizen?
Then I accustomed added belletrist allurement the aforementioned question, and I began to apprehend that this affair is of absorption to added bodies than I thought. Or at atomic it is actual important to the few bodies who are interested.
But first, let’s accept the question.
When a being dies, the brood charge pay federal tax on the bulk of the acreage that’s account added than $600,000. (And in Southern California, area home prices are soaring, abounding bodies accept that affectionate of a net account and don’t alike apprehend it.) The alteration of the aboriginal $600,000 is basically tax-free–or in legalese, there is a agnate answer for the bulk of the tax due.
However, and this is a big however, if you leave all your assets to your spouse, the apron does not accept to pay any federal acreage tax back it is received. This is accepted as the absolute conjugal deduction.
Now comes the question: If your apron is not a U.S. citizen, can he or she still affirmation the deduction?
No. The conjugal answer is denied, and the apron will accept to pay the abounding tax, unless the non-citizen spouse’s absorption (the allowance received) is in the anatomy of a able calm assurance (QDOT), explained Jeffrey B. Wheeler, a advocate with the Beverly Hills close of Rosenfeld, Meyer & Susman.
In added words, a person’s acreage charge be transferred into a actual appropriate affectionate of assurance in adjustment for the alteration to action after any tax due. There are several abstruse requirements for a QDOT trust, but the key one is that the trustee charge either be a U.S. aborigine or a U.S. corporation.
While this may arise to be an abstruse acknowledged point, Wheeler declared it as a acreage mine. It could actually amount hundreds of bags of dollars in taxes to the afflicted being who discovers it too late.
If you appear to accept a apron who is not a U.S. citizen, this is big news–news that has been about back November, 1988, back article alleged TAMRA–the Abstruse and Miscellaneous Revenue Act of 1988–first went into effect.
The credible account of the change in the law was to accomplish abiding that a non-citizen apron did not aggregate his or her bequest and again leave the United States, never to return, and leave the government after its fair allotment back that apron again dies. (If both spouses are U.S. citizens, the government will aggregate tax back the additional apron dies.)
Even if your will or assurance was drafted afore November, 1988, back the new law went into effect, you’re still out of luck. Wheeler said: “The alarming affair about this accurate accouterment is that clashing added changes (in the tax law), this accouterment was not grandfathered.”
If you are one of the afflicted ones afflicted by this provision, you should anon argue a professional. Do not canyon GO. Visit your lawyer. And ask about creating a QDOT trust.
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