Wealth Transfer Taxation Services
Cross-border wealth transfer presents unique challenges where U.S. tax law intersects with international treaties, foreign inheritance rules, and complex residency determinations. Whether you're a U.S. expatriate planning your estate or a non-resident alien with U.S. assets, strategic planning is essential to preserve wealth across generations.
The U.S. wealth transfer tax system—encompassing estate, gift, and generation-skipping transfer taxes—operates fundamentally differently for non-resident aliens than for U.S. citizens and residents. While U.S. persons enjoy a unified estate and gift tax exemption of $13.61 million (2024), non-resident aliens face a dramatically different landscape with only a $60,000 estate tax exemption and no lifetime gift tax exemption for U.S.-sited assets. These disparities, combined with varying definitions of U.S.-sited property and treaty modifications, create a planning environment where expertise is not just valuable—it's essential for preserving family wealth.
Critical Distinction: A non-resident alien's U.S. stock portfolio worth $1 million faces potential estate tax of $345,800, while the same portfolio owned by a U.S. person incurs zero estate tax. Proper planning can legally eliminate or dramatically reduce this exposure.
Trust Taxation Services
International trust structures represent powerful tools for wealth preservation and tax planning, but they also trigger some of the most complex reporting requirements in the U.S. tax code. The classification of a trust as foreign or domestic, the residency status of grantors and beneficiaries, and the application of the grantor trust rules create a multidimensional compliance challenge. Recent years have seen aggressive IRS enforcement of foreign trust reporting, with penalties starting at $10,000 or 35% of distributions—whichever is greater.
Our comprehensive trust taxation services include:
- Foreign Trust Compliance: Preparation of Forms 3520 and 3520-A for U.S. beneficiaries and grantors, including proper reporting of distributions and grantor trust status
- Domestic Trust Planning for NRAs: Structuring U.S. trusts to hold U.S. assets while minimizing estate tax exposure for non-resident alien grantors
- Dynasty Trust Implementation: Creating multi-generational trust structures that leverage favorable state laws while navigating international reporting requirements
- Grantor Trust Optimization: Using intentionally defective grantor trusts (IDGTs) and other advanced techniques for tax-efficient wealth transfer
- Trust Migration Planning: Managing the tax consequences of changing trust situs or converting between foreign and domestic status
- Beneficiary Distribution Strategy: Coordinating distributions to minimize combined U.S. and foreign tax burdens across multiple jurisdictions
Planning Opportunity: Foreign non-grantor trusts can accumulate income tax-free in many jurisdictions, but U.S. beneficiaries face punitive throwback rules on distributions. Proper planning can convert tax bombs into tax-efficient wealth transfers.
Estate Taxation Services
The U.S. estate tax presents dramatically different challenges for non-resident aliens compared to U.S. persons. With only a $60,000 exemption and tax rates reaching 40%, non-resident aliens with substantial U.S. investments face potential estate tax liabilities that can devastate family wealth. Conversely, U.S. expatriates must navigate the covered expatriate rules, worldwide estate tax exposure, and complex treaty interactions. Strategic planning can transform these challenges into opportunities for efficient wealth transfer.
Our estate tax planning and compliance services encompass:
- U.S.-Sited Asset Analysis: Comprehensive review of asset holdings to identify U.S. estate tax exposure, including often-overlooked items like debt obligations and partnership interests
- Pre-Immigration Planning: Restructuring wealth before establishing U.S. tax residency to maximize basis step-up and minimize future tax exposure
- Treaty Optimization: Leveraging estate tax treaties to increase exemptions, reduce rates, and eliminate double taxation
- Form 706-NA Preparation: Expert preparation of estate tax returns for non-resident aliens, including valuation discounts and treaty positions
- Covered Expatriate Planning: Managing the exit tax and succession tax implications for expatriating U.S. citizens with substantial wealth
- Liquidity and Payment Strategies: Structuring life insurance and other liquidity solutions to fund estate tax obligations without forced asset sales
Treaty Benefit Example: The U.S.-UK estate tax treaty can increase a British citizen's exemption from $60,000 to $13.61 million for U.S. assets—a 227-fold increase that can save millions in estate taxes.
Estate planning for international families requires coordinating U.S. tax law with foreign inheritance regimes, forced heirship rules, and succession taxes. Our integrated approach ensures your estate plan works efficiently across all relevant jurisdictions while respecting family dynamics and wealth preservation goals.
Protect Your Legacy →Gift Taxation Services
The U.S. gift tax rules create a paradoxical landscape for international wealth transfers. While non-resident aliens can gift unlimited amounts of intangible property—including U.S. stocks and bonds—free of U.S. gift tax, transfers of U.S. real estate or tangible property face immediate taxation with no lifetime exemption. For U.S. expatriates, the worldwide gift tax regime and annual exclusion limitations for non-citizen spouses add layers of complexity to family wealth transfers.
Our gift tax planning and compliance services include:
- Strategic Gift Planning: Structuring transfers to maximize the disparate treatment of tangible and intangible property for non-resident aliens
- Annual Exclusion Optimization: Coordinating annual exclusion gifts across multiple beneficiaries and jurisdictions, including the enhanced $185,000 exclusion for non-citizen spouses
- Form 709 Compliance: Accurate preparation of gift tax returns for U.S. persons and non-resident aliens, including treaty positions and valuation documentation
- Cross-Border Family Gifting: Planning for gifts between U.S. and non-U.S. family members to minimize combined gift and income tax consequences
- Charitable Gift Planning: Structuring international charitable gifts to maximize deductions while navigating foreign charity restrictions
- Generation-Skipping Strategies: Leveraging GST tax exemptions for international families while avoiding inadvertent triggering events
Planning Alert: A non-resident alien's gift of a $5 million U.S. stock portfolio to their children incurs zero U.S. gift tax, while a $500,000 gift of U.S. real estate triggers immediate tax of approximately $155,800. Structure matters.
The interaction between U.S. gift tax rules and foreign wealth transfer regimes creates both opportunities and traps. Our expertise in international gift planning ensures your generosity achieves its intended purpose without unnecessary tax erosion, whether you're funding education, providing for family, or supporting charitable causes across borders.
Plan Your Giving Strategy →