Estate planning with international family ties — what Virginia clients need to know

A Northern Virginia family with roots in Seoul, Lagos, Mumbai, São Paulo, or London is not a special case — it is most of the region. Clients with cross-border family ties, foreign assets, or dual nationalities are the norm, not the exception. Their estate planning is also different in ways a domestic-only attorney often misses.

Here is what changes when your family crosses borders — and what a careful plan needs to account for.

Start with citizenship and residency, not assets

Most cross-border estate planning conversations jump to foreign real estate or overseas accounts. The first question is actually simpler: who is a U.S. citizen, who is a green card holder, and who is a non-resident?

Three categories create very different planning landscapes.

U.S. citizen and U.S. resident

Full U.S. estate and gift tax rules apply, with the full federal exemption (currently $13.6 million per person, scheduled to drop in 2026). Worldwide assets are subject to U.S. estate tax on death.

Green card holder (lawful permanent resident)

For estate and gift tax purposes, generally treated as a U.S. resident. Worldwide assets are subject to U.S. estate tax. This catches many families off guard — a green card granted for work or family reasons brings worldwide estate-tax exposure with it.

Non-resident alien

Only U.S.-situated assets are subject to U.S. estate tax, but the exemption is dramatically lower — just $60,000 versus the $13.6 million available to residents. A non-resident spouse holding a Virginia condominium may face U.S. estate tax on death where a resident spouse would not.

Which category each family member falls into is the single most important variable in a cross-border plan.

The marital deduction does not work automatically for non-citizen spouses

This is the single most common trap for cross-border families.

U.S. citizen spouses can leave unlimited assets to each other free of estate tax, thanks to the marital deduction. This deduction does not apply to non-U.S.-citizen spouses. A Virginia resident leaving a $5 million estate to a non-citizen spouse creates estate tax liability that would be zero if the spouse were a citizen.

The fix is a Qualified Domestic Trust (QDOT) — a specialized trust structure that lets assets pass to a non-citizen spouse while preserving the marital deduction. Without a QDOT (or another specific strategy), substantial estate tax hits the first death instead of the second.

Every couple where one spouse is a U.S. citizen and the other isn't should address this directly in their estate plan. Defaulting to "my spouse gets everything" language does not work.

Foreign-situated assets

Real estate in another country is the most common foreign asset. Its treatment in a U.S. estate plan depends on:

1. Whether the country recognizes U.S. wills and trusts
2. Whether the country's own succession law overrides private wills (forced heirship regimes)
3. Whether a tax treaty exists between the U.S. and the country

Forced heirship countries

Civil law countries — France, Italy, Spain, much of Latin America, many Islamic-law jurisdictions — restrict how you can dispose of certain assets. A Virginia will leaving all property to a spouse may not be honored in a country that requires a fixed share to go to children, regardless of the will's instructions.

Plans for families with assets in forced-heirship countries usually require a separate local will drafted under that country's law, coordinated with the U.S. will to avoid contradictions.

Tax treaties

The U.S. has estate and gift tax treaties with 16 countries, including the UK, Germany, France, Canada, Japan, Australia, and others. These treaties often reduce or eliminate double taxation and in some cases extend the U.S. exemption to non-residents of those countries.

Treaty benefits do not apply automatically — they must be claimed, and the claim depends on the specifics of the treaty. A family with UK roots, for example, has very different planning options than a family with Indian roots (no treaty).

Foreign accounts and reporting

Clients routinely underestimate the reporting burden for foreign financial accounts.

• FBAR — U.S. persons with foreign financial accounts exceeding $10,000 in aggregate at any point in a year must file FinCEN Form 114 annually. Penalties for non-filing are severe.
• FATCA / Form 8938 — higher threshold requirement for reporting foreign financial assets on the annual tax return.
• PFIC rules — investments in foreign mutual funds (called Passive Foreign Investment Companies) trigger complex, unfavorable U.S. tax treatment that can make the investment worse than holding nothing.
• Foreign trusts — creating or receiving from a foreign trust triggers extensive reporting (Forms 3520 and 3520-A).

A good estate plan for a cross-border family does not ignore reporting obligations. It routes new planning decisions around them.

Gifts to and from non-citizens

Two rules that often surprise clients:

Gifts from a U.S. citizen to a non-citizen spouse

The unlimited marital gift deduction for U.S. citizen spouses reduces to an annual limit for non-citizen spouses (indexed, around $185,000 in 2024). Larger gifts use lifetime exemption and eventually trigger gift tax.

Gifts from a non-resident alien to a U.S. person

No U.S. gift tax on the non-resident donor for gifts of non-U.S. property, but the U.S. recipient must file Form 3520 for gifts from foreign persons exceeding $100,000 in a year. Missing this form has penalties.

Succession of digital and business interests

A growing concern: cross-border families often hold business interests or digital assets (cryptocurrency, foreign online accounts) that pass through neither probate nor trust naturally. These assets need specific provisions — often including fiduciary access language compliant with both the U.S. state of residence and any foreign jurisdiction with relevance.

A working checklist for cross-border families

At the first consultation, gather:

• Citizenship and residency status of every family member
• Countries where assets are located (real estate, accounts, business interests)
• Countries where beneficiaries live or hold citizenship
• Existing foreign wills or trust documents
• Recent tax filings, including foreign information returns
• Any treaties that may apply

The goal of the first meeting is not a plan. It's a map — understanding which rules in which countries affect which assets, and where the risks concentrate.

Why this is its own practice

Cross-border estate planning sits at the intersection of U.S. tax law, international tax law, foreign succession law, and the specific treaty and reporting frameworks that connect them. Anne K. Baldridge's background includes a decade of humanitarian work across more than two dozen countries before transitioning into estate planning — which means cross-border families at GoldBridge work with someone who has lived the complexity, not just studied it.

This article provides general information and is not legal or tax advice. Cross-border planning depends heavily on specific facts and changes frequently with tax law updates. Please consult an attorney and, where appropriate, a tax advisor before acting.