Navigating the U.S. Legal System Following the Death of a Loved One
International probate and estate administration can present complicated tax and legal issues that can be overwhelming for anyone, especially if you’re dealing the death of a loved one. Getting the right legal guidance is critical to accessing the assets, complying with tax authorities, and fulfilling legal obligations to beneficiaries.
Our lawyers and staff are well-versed in navigating the complexities of international estate administration. We can help you access U.S. assets that were owned were left behind by a foreign person and file the appropriate estate tax returns. We can also help those who lost a loved one in the U.S. with accessing assets that were left behind in another country.
Accessing U.S. Assets Owned by a Foreign Person
If a foreign person dies with assets in the U.S., getting access to those assets may require certain filings with the IRS and opening a probate or estate administration proceeding in the U.S. state in which the assets were held.
If the deceased person owned a U.S. bank or brokerage account, the custodian of that account may require something called a transfer certificate before releasing the funds in the account. A transfer certificate is a document issued by the IRS confirming that all estate tax obligations have been fulfilled. Financial institutions are reluctant to provide access to an account that was owned by a foreign person in the absence of a transfer certificate because the financial institution can be on the hook for any taxes if they release the funds and the tax goes unpaid.
If the value of the U.S. assets exceeds $60,000, a federal estate tax return (Form 706-NA) must be filed with the IRS in order to receive the transfer certificate. This process can take a year or more, so it’s best to get the process started as soon as possible.
If the total value of the U.S. assets does not exceed $60,000, a transfer certificate can be requested without the need for filing the estate tax return.
A federal estate tax return (Form 706-NA) must be filed with the IRS if the deceased’s U.S.-based assets exceed $60,000. Under the U.S. tax code, U.S. assets owned by a foreign person are subject to a 40% estate tax to the extent that the assets exceed $60,000. This harsh tax may be mitigated by certain exceptions and treaties.
If you need help obtaining a transfer certificate or filing an estate tax return for a non-resident, contact us to schedule a consultation.
Ancillary Estate Administration
Unless the U.S. asset that was left behind had a beneficiary designation or a joint owner, the asset will likely have to go through a process called probate or estate administration. This is the court process that validates a person’s last will and testament and authorizes the transfer of assets from the deceased’s name to the name of his or her heirs. An ancillary estate administration proceeding must be commenced in each state where the deceased person owned real estate. If he or she did not own U.S. real estate, a proceeding may be commenced in any U.S. state in which assets are located.
If the deceased person had a will at the time of their death, the will may or may not be valid in the U.S. If it is valid, the original copy must be filed with the U.S. court. If the original document is not available because it has been filed with the home country authorities, then a certified copy of the will must be obtained and submitted to the U.S. court. If the document is in a language other than English, a translation must also be submitted.
If you need help obtaining an IRS transfer certificate, contact us to schedule a consultation.
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