Love doesn’t understand boundaries. And so there are times when U.S. citizens fall in love and marry citizens of another country. But how does that affect things in Arkansas when it comes to estate planning? There are actually three areas of which to be mindful in these cases.
For married U.S. citizens, when one spouse passes away, it is assumed that the surviving spouse inherits the assets. But if the partner who is a citizen dies and the assets pass to his or her noncitizen spouse, he or she will have to pay estate taxes. To make matters more difficult, he or she will have to pay the tax since there is no exemption that states the tax could be paid upon the surviving spouse’s death. If the non-U.S. citizen in the marriage dies first, the surviving spouse who is a citizen would have no issues.
Another thing to note is that property is not divided evenly even if the couple own the property jointly. So, if the spouse who is a U.S. citizen dies first, the home’s entire value would be included in the deceased spouse’s estate, not just half. The surviving spouse who is not a U.S. citizen, would have to show how he or she contributed toward the mortgage. This significantly impacts estate planning.
In such situations, unlimited gifting from one spouse to another is not allowable. These are issues with which an Arkansas estate planning attorney may be able to help. It is better to get the guidance to properly execute an estate plan, rather than waste the time and energy having a document written that won’t hold water.