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JonBeer: "2) We're both Greencard holders, but not citizens. A financial advisor who is trying to sell me life insurance tells me that as non-citizens we get only a $13k exemption from estate tax, and that spouse to spouse transfers are taxable at the full rate on death."

I am out of my pay grade here, too, but I do not think that 13k is correct for FET purposes, but I do know that the unlimited marital exemption does not apply when the surviving spouse is an alien.

See: http://www.takatalaw.com/us/estguide/16.html

The US government does not want the surviving, alien spouse departing with all the funds and totally escaping the the FET.

When the surviving spouse is a US citizen, the US government knows that it will eventually receive either gift or estate taxes (unless all the money is spent).

See also:

http://www.advisortoday.com/archives/2001_december_feigenbaum.html

http://www.rowbotham.com/articles/International/qdots.htm

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=239892

If you both become US citizens, this issue would go away for you.

Regards, JAFO
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