Wayne, NJ Estate Planning Attorney for Dual Citizenship

Dual citizens who live abroad but maintain assets in the United States face unique estate planning challenges. Assets like brokerage accounts, retirement accounts, and real estate can become complicated to manage after the owner’s death. Even if a dual citizen has a will, surviving family members may need to navigate the U.S. probate process—a procedure that can be both lengthy and costly. This situation is further complicated when family members are unfamiliar with U.S. financial institutions and legal systems, and are not physically present for probate proceedings.

Challenges Faced by Dual Citizens

U.S.-Based Financial Accounts

When a dual citizen passes away in a foreign country, U.S. financial institutions will typically freeze any brokerage, retirement, or bank accounts held by the deceased. Access to these accounts is restricted until the surviving family members obtain an IRS Transfer Certificate (Form 5173). In recent years, acquiring this certificate has taken months rather than weeks, causing undue hardship for families who need funds to cover taxes, bills, funeral arrangements, and other expenses.

U.S. Real Estate Holdings

If a dual citizen owns real estate in the United States under their individual name, that property becomes part of their estate upon death. Surviving family members must then initiate the probate process to appoint a fiduciary who can transfer or sell the property. Additionally, the property may be subject to an automatic estate tax lien, further complicating matters.

The Solution: Revocable Living Trust

To help clients avoid these burdensome issues, we recommend establishing a Revocable Living Trust.

What Is a Revocable Living Trust?

A Revocable Living Trust is an estate planning tool commonly used to bypass the probate process. During the grantor’s lifetime, assets are transferred into the trust. Since the trust is both revocable and amendable, the grantor retains complete control over the assets. There is no need for additional tax reporting, as income generated from trust assets is reported on the grantor’s individual tax return.

Benefits Upon the Grantor’s Death

Upon the grantor’s death, assets within the trust are distributed according to the trust’s provisions, functioning similarly to a will. The grantor can specify whether assets should be given outright to surviving family members or held in trust until beneficiaries reach a certain age. Because the trust owns the assets—not the deceased individual—surviving family members can avoid the probate process and are not required to obtain the IRS Transfer Certificate (Form 5173).

How We Can Help

If you’re a dual citizen concerned about the complexities of estate planning and asset management across borders, establishing a Revocable Living Trust can offer significant advantages. It allows your family to gain access to your U.S. assets without court or IRS interference.

For personalized guidance on how a Revocable Living Trust can benefit you and your family, book a consultation with the Law Firm of Benjamin D. Eckman. We are here to help you navigate the intricacies of estate planning for dual citizens, ensuring that your assets are protected and your loved ones are provided for.