In light of recent events, we felt offering a few free tips for noncitizen-residents was in order. While we don’t know much about immigration law, Estate Planning and Administration are an important part of everyone’s life. National boundaries may cause some complexities, so below are a few tips to help you navigate:
- Your estate is administered in the nation you are residing in, regardless of your citizenship or where you were located at the time of your death. This means long-term resident-noncitizens of the United States should do estate plans just like any other resident or citizen. In California, this generally includes a Will, Trust, Power of Attorney for Financial Affairs, Advance Health Care Directive, and HIPAA Waiver. Failure to plan will mean your estate will be distributed according to the laws of the State you were a resident of under a Court supervised probate.
- There is a generally recommended subtrust to be included in a Revocable Living Trust when planning for a noncitizen-resident: the Qualified Domestic Trust. While not always needed, including a standby version of a “QDOT” in a Trust where a beneficiary may be a noncitizen can help minimize the tax burden of the gift and ongoing income taxation of the Trust.
- It is important to carefully choose your Trustees and other fiduciaries. A nonresident trustee may cause a trust to get a big tax bill for being a foreign trust. A health care agent who cannot be easily contacted by your U.S. hospital may cause delays in an emergency situation. California Courts require additional bonds for nonresident Executors, even where the bond is waived in your Will. To avoid these pitfalls and many others, it is important to discuss who you plan to name in your documents with your Attorney.