As global connectivity increases, marriages between individuals of different nationalities are becoming more prevalent in the United States. While having a comprehensive estate plan is essential for any couple, it becomes particularly crucial for mixed-nativity couples when one spouse is not a U.S. citizen. With that in mind, the Vero Beach attorneys at Kulas Crawford & Smith explain why estate planning is crucial if your spouse is not a U.S. citizen.
Challenges Faced by Mixed-Nativity Couples
In the past century, international travel and communication have become significantly easier, leading to a rise in cross-border relationships. Today, more than one in five Americans are part of mixed-nativity marriages, where at least one spouse was not born in the United States. While many foreign-born spouses have obtained citizenship, a substantial number of Americans are still married to non-citizen partners.
Mixed-nativity couples often face unique challenges when it comes to estate planning, primarily due to the complex interplay between immigration status, tax laws, and inheritance regulations. One significant challenge is the inability to utilize certain tax-saving mechanisms that are available to couples where both spouses are U.S. citizens. For example, the unlimited marital deduction, which allows spouses to transfer assets to each other without incurring gift or estate taxes, is not available to couples with a non-citizen spouse. This means that without proper planning, up to 40 percent of the estate could be lost to taxes, leaving the surviving spouse financially vulnerable.
Moreover, inheritance laws vary from country to country, adding another layer of complexity to the estate planning process for mixed-nativity couples. In some cases, conflicting laws or regulations between the spouses’ countries of origin can lead to legal disputes or unintended consequences if not addressed proactively.
Your Spouse Is Not a U.S. Citizen: How Estate Planning Can Help
The good news is that there are estate planning tools and strategies available to mitigate these challenges. Leveraging the annual exclusion enables tax-free yearly gifts to a non-citizen spouse, without affecting the lifetime exemption limit. As of 2025, the annual exclusion limit for a non-citizen spouse is $190,000.
Another effective strategy is the use of a Qualified Domestic Trust (QDOT) to safeguard assets intended for the non-citizen spouse. A QDOT allows the transfer of assets into a specialized trust, with the spouse as a beneficiary. While the spouse receives interest from the trust assets, they do not have outright ownership. Moreover, strict terms prevent the spouse from accessing the trust principal without demonstrating “extreme hardship.”
Upon the spouse’s passing, the trust assets are distributed to the remainder beneficiaries named in the trust, typically children or grandchildren. It is important to note, however, that federal and/or state estate taxes may apply when the trust principal is distributed.
Furthermore, international estate planning can help couples to take advantage of favorable tax treaties between the United States and other countries. By understanding the provisions of these treaties and structuring their estate plan accordingly, couples can minimize tax liabilities and maximize the value of the assets passed down to their heirs.
Effective estate planning for mixed-nativity couples requires open communication and a thorough understanding of each spouse’s legal and financial situation. It is essential for couples to discuss their goals and concerns openly and work with an experienced estate planning attorney who has experience in international estate planning.
Do You Need to Protect a Non-Citizen Spouse in Your Estate Plan?
To learn more, please join us for an upcoming FREE seminar. If you are married to a non-citizen and with to protect your spouse in your estate plan, please contact an experienced Vero Beach estate planning attorney at Kulas Crawford & Smith by calling (772) 398-0720 to schedule a consultation.
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