Lou Lawyers
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By the Book

Do foreign nationals or non-US citizens who own a house in the US need a US trust?

  • Like Everyone Else: You will likely be subject to probate– if you own a house in California worth over $150,000, you will be subject to probate at death (file petition/lodge will with probate court; appoint executor, inform creditors, inventory all assets; pay creditors; distribute to beneficiaries). Creating a revocable trust will allow the property to pass to your heirs without going through the probate process.

  • Like Everyone Else: Your “estate plan” to pass on your property should not be to add your kids to the deed– See the “Should I add my child’s name to our house” article. There are many unintended consequences by giving away half your property to your kids now.

  • Especially For Non-US Citizens: Enjoy the same tax benefits as US Citizens – Non-US citizens do not have the same benefits of being able to give an unlimited amount of assets estate/gift tax free to their US citizen spouses (unlimited marital deduction). However, proper provisions in the trust (QDOT) will allow non-citizens to be eligible for the unlimited marital deduction and defer taxes.

  • Especially For Non-US Citizens: Naming of guardians for your minor children - This may be especially important for non-US citizens temporarily in the US. The children may ultimately go back to their home country with guardians who are not US residents themselves. Since this may have time delays, it is crucial to designate temporary or stand-in guardians who reside in the US in the meantime to avoid letting the court make that decision.

  • Especially For Non-US Citizens: Let your US Trust govern your US property: To avoid confusion as to how your US property will pass to your heirs, put your US property in your US trust to make it clear how to settle your estate at your death.