Including Non-citizens in your estate planning

Our modern society has become increasingly international with many loved ones now travelling and living abroad, with some family and friends changing citizenship when they move abroad. This can present its own challenges in estate planning as international legal issues can add to the complexity. Therefore, you must seek competent legal advice for your specific situation.

In many states, there are few restrictions on whom you can appoint as your executor or personal representative under your will. If you have a non-citizen child or spouse and you trust that person above anyone else to handle your affairs after your death, you can name that person. However, it is important to think of the practicality of this situation. Having someone abroad handling your affairs can be increasingly stressful as that person cannot maintain property or attend meetings face to face. 

In addition, having a foreign executor may make it more difficult for your beneficiaries to legally appoint a new executor if they fail to carry their duties out.

If you wish to appoint a trustee that is a non-citizen or a US citizen who resides outside the United States, the trust could be treated by the Internal Revenue Service (IRS) as a foreign trust, leading to adverse tax consequences for the trust’s beneficiaries. For example, if the trust is deemed to be a foreign trust, the IRS could impose mandatory withholding requirements on the trustee or recognize capital gains tax on appreciated assets such as stock, even before the property’s sale and the trust may be subject to testing.

Financial & Healthcare Agents

There is also some question as to whether a US citizen can name a noncitizen as an agent under a financial or healthcare power of attorney. In most cases, you can name any person whom you trust to be your agent under a durable financial power of attorney, healthcare power of attorney, or advance healthcare directive. 

Naming a Foreign Person as a Beneficiary of Your Estate or Trust

An executor or trustee that pays income from a trust or estate to a foreign person as defined by the tax code is typically required to withhold 30 percent of the funds prior to making such distributions, regardless of what the ultimate tax liability will be. Another important issue to consider is that, in contrast to spouses who are both citizens of the United States, if you have a non-citizen spouse, the unlimited marital deduction for gifts and inheritances passed between spouses is not available to you.

In addition, the noncitizen spouse is not subject to the presumption that each spouse owns 50 percent of jointly owned property. Instead, a noncitizen spouse must be able to trace the amount of the spouse’s own money or earnings contributed to the purchase of the joint property. Failure to do so could result in significant additional tax liability at the death of the citizen spouse.


It may be more complex, but it is your choice who looks after your estate. Be sure to obtain the proper legal advice you need from Music City state Law in Franklin, TN. It will be well worth the effort, and we are delighted to help you along the way. Give us a call today.

  • Recent Posts

  • Contact Us

    1650 Murfreesboro Road, Suite 130
    Franklin, TN 37067
    (615) 628-7775
  • Nashville
    4525 Harding Pike #200
    Nashville, TN 37205
    (615) 628-7775
  • Follow Us

  • Scroll to Top
    Play Video