Non-Residents Need Estate Tax Planning Too
November 2, 2011
Estate tax planning is important for Florida residents, but it is also just as important for persons who own U.S. assets but are not U.S. citizens. The rules concerning non-resident asset taxation can be complicated, and they may only get more complicated over the next few years. Under current law, not only can the federal government levy estate taxes on property, but some states may also demand a probate tax at the time of death on property owned by non-residents. One way to possibly get around the state probate tax is by owning property through a revocable trust.
The estate tax for 2010 through 2012 in the United States ranges from 18 percent up to 35 percent of the fair market value of the asset. There is an exemption amount for amounts up to $5 million. However, starting in 2013 the estate tax rate will go up to 55 percent, and the exemption will be reduced to $1 million.
If there is any good news in all of this it is that there are legal and legitimate strategies that can be used to reduce the overall estate tax burden for non-residents. Many of these strategies are somewhat complex in nature and may be difficult to understand. For this reason, many individuals prefer to work with licensed estate planning attorneys.
Under many of these strategies, probate tax burdens at both the federal and state level may be reduced or even eliminated. For those non-citizens who own property in Florida or other types of assets that they wish to protect, consulting with an experienced Florida estate planning professional may be a good first step to exploring the possibilities. It is important to not wait until it is too late to get a proper estate plan in place.