How does immigration status affect estate planning?

One of the primary ways immigration status affects estate planning is through tax implications. The U.S. federal estate tax applies differently depending on your residency and citizenship status.

Understanding how immigration status affects estate planning is crucial for ensuring that your wishes are honored and your loved ones are protected. Below, our Denver estate planning lawyers explore the key ways immigration status intersects with estate planning in Colorado.

Estate tax implications based on immigration status

U.S. citizens

Citizens enjoy the full federal estate tax exemption of $13.99 million per individual as of 2025. This exemption also applies to assets transferred to a surviving spouse.

Permanent residents (green card holders)

Permanent residents are generally treated like U.S. citizens for estate tax purposes, meaning they are also eligible for the federal estate tax exemption.

Non-resident aliens

Non-resident aliens are subject to a much lower federal estate tax exemption—typically only $60,000. Assets located in the U.S., such as real estate or bank accounts, are subject to U.S. estate taxes, which can create a significant tax burden for non-resident individuals.

Understanding these tax distinctions is critical for creating an estate plan that minimizes tax liabilities.

Ownership of property and assets abroad

Immigration status often involves ownership of assets in multiple countries. If you own property or have financial accounts outside the U.S., estate planning must consider:

• Foreign inheritance laws: Some countries have strict laws about who can inherit assets, often favoring children or spouses. These laws may conflict with your estate plan.
• Double taxation: Without proper planning, your estate could be subject to taxation in the U.S. and the country where your assets are located. Tax treaties between countries may help mitigate this, but careful planning is essential.
• Reporting requirements: U.S. citizens and permanent residents must report foreign assets over a certain value to the IRS, even if those assets are part of their estate plan.

Considerations for non-citizen spouses

Special considerations apply to your estate plan if you are married to a non-citizen. While U.S. citizens can transfer unlimited assets to a spouse without incurring estate taxes, this rule does not apply to non-citizen spouses. Instead, transfers above the federal estate tax exemption are taxable unless assets are placed in a Qualified Domestic Trust (QDOT). A QDOT ensures that estate taxes are deferred until the surviving non-citizen spouse withdraws funds or passes away.

Immigration status and beneficiary designations

When planning your estate, it’s essential to ensure that beneficiary designations align with your immigration status and residency. For instance:

• Bank accounts: Some U.S. financial institutions may impose restrictions on accounts held by non-residents.
• Retirement accounts: Tax rules on inheritance can vary significantly for non-U.S. citizens, affecting the amount your beneficiaries receive.
• Life insurance policies: Proceeds are generally not taxable in the U.S., but local tax laws may apply to beneficiaries in other countries.

Guardianship for minor children

If you have children and are not a U.S. citizen, naming a guardian in your estate plan is especially important. Immigration status can complicate guardianship decisions, particularly if the chosen guardian resides in another country. Working with an experienced estate planning attorney who understands cross-border legal issues is vital to ensure your children’s care aligns with your wishes.

Durable powers of attorney and health care directives

Immigration status may also impact the choice of individuals for roles such as financial power of attorney or health care proxy. Non-resident family members or friends may face challenges in fulfilling these roles due to legal or logistical barriers. Selecting someone in the U.S. with the legal capacity to act on your behalf is often the best option.

Legal support for cross-border estate planning

At Colorado Estate Matters, we understand that navigating the intersection of immigration status and estate planning requires specialized expertise. Our team is here to help you create a comprehensive plan that addresses unique challenges, such as tax implications, cross-border assets, and non-citizen beneficiaries. We can also guide you in establishing trusts, managing foreign property, and ensuring compliance with U.S. and international laws.

If you’re ready to explore how immigration status affects estate planning and secure your family’s future, contact Colorado Estate Matters at (303) 713-9147 to schedule a consultation. We’re committed to providing compassionate, tailored solutions for all your estate planning needs.