Both my wife's parents are resident aliens of the United States, having come here 25 years ago from Ireland. I suspect the value of their estate is close to $1 Million. Let's say Dad passes on and Mom decides to stay in the US. Would any kind of estate tax or special punitive tax apply in the case of one parent dying? What about when both parents pass on? Are there any special estate tax issues for us as heirs due to the fact that both parents are resident aliens?
Hello- Im no specialist on this subject, but one of the issues will be that inheritances or transfers to the living spouse could be taken out of the country ( i.s. dad or mom might move back to Ireland )So, I believe I'm correct in saying that the IRS does not treat resident aliens in the same way as resident US citizens in the situation that you described. Try this site: http://www.irs.gov/
US citizen have an unlimited spousal estate and gift tax exclusion; gifts and inheritances flow between spouses both before and after death tax free. Using an AB bypass trust, they can double the current $675,000 their heirs can inherit tax free on the death of the second spouse.Suggestions: 1) don't let them die this year. Next year and thereafter an indidual resident alien can transfer estate tax free $1,000,000.2) if ill health, etc. make 1) impossible, consider a QDOT, a Qualified DOmestic Trust.3)Make gifts between spouses durind life to keep estate less thn $1,000,000.4) Have the first to die parent leave some to the children.The new tax law has greatly simplified their estate tax problem, and that of most resident aliens.
Domicile is the critical issue for most estate tax issues. Domicile is your permanent home, your ultimate roots, and goes beyond residence. Domicile should be clearly set out in your in-laws wills (very important that these are in order). If they are truly settled in the US, with no intention ever to return to Ireland, then they may be domiciled in the United States; if they have any intention of returning to Ireland, even living in the US 25 years may not result in US domicile.Consult an estate tax lawyer with these points and you should get the advice you need.Matt
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