Plenty of people living in the United States are not citizens, and a common worry I hear is whether they are even allowed to put an estate plan in place here. The answer is yes. Not only is it permitted, it is essential. If anything, a non-citizen often has more to think through than a citizen does, because property abroad, the laws of another country, and some unforgiving tax rules can all come into play. Here is what you need to know.
Property Located in Another Country
If you own a home, land, or accounts in another country, that property has to be part of the conversation. Where it sits can change which country's law decides what happens to it, and that can pull your plan in directions a U.S.-only plan never anticipates.
Common Law vs. Civil Law
The United States and the United Kingdom use a common law system. Countries like Germany, France, and China use a civil law system. The differences matter. Common law countries recognize trusts; many civil law countries do not. The two systems also disagree about which country's law governs property. In a common law country, real estate is usually governed by the law of the place where it sits. Under civil law, the governing law may instead be that of the deceased person's nationality or habitual residence. These differences shape what options actually work for your foreign property.
Wills and Trusts Across Borders
In the United States, wills and trusts are the everyday tools for passing on money and property. Once foreign property enters the picture, though, the law of that other country may control how it is distributed, and that country may not even accept a U.S. will as valid. Some countries will honor a will from elsewhere if it meets all their formalities. Others will not recognize a foreign will at all, or only in narrow situations.
Because of that, some people need more than one will, with each will handling only the property in a particular country and each drafted by someone who knows that country's law. This has to be done carefully so that one will does not accidentally revoke another.
There is also the international will, created under a treaty that the United States and a limited set of other countries have adopted. It sets out criteria for a will meant to be valid across borders. The limitation is that many countries never signed on, so an international will is not a universal solution.
Trusts deserve their own warning. Because civil law countries generally do not recognize trusts, trust-based planning can fall apart where your real property or your beneficiaries are located in such a country. Some of those countries may even treat the trust as a stranger and tax it at the highest inheritance rate.
Tax Considerations for Non-Citizens
This is where the rules get sharp, and the answer turns on whether you are treated as a U.S. resident.
If you are a U.S. resident. Citizens and non-citizens who meet the IRS definition of a resident are taxed on their worldwide money and property for federal gift and estate tax purposes. The upside is that residents also get the benefit of the large federal lifetime gift and estate tax exemption, which for 2026 is $15 million per person, along with the annual gift exclusion of $19,000 per recipient. Generally you are a permanent resident if you live here now and intend to stay indefinitely. Keep in mind that giving up permanent resident status can trigger an exit tax on the appreciation of your property.
If you are a non-resident. For non-citizens who do not intend to remain in the U.S., only property "situated" in the United States is subject to U.S. estate and gift tax. That sounds favorable until you see the exemption: it drops all the way to $60,000. A non-resident with significant U.S. property can face a large estate tax bill, and may also owe estate tax back in their home country, raising the threat of double taxation. The U.S. has estate and gift tax treaties with a limited number of countries to help avoid the same asset being taxed twice.
Remember, too, that Illinois has its own estate tax with a $4 million exclusion and no spousal portability. Illinois property is its own layer on top of whatever the federal rules require.
Special Rules for Non-Citizen Spouses
This is the issue that surprises couples the most. The unlimited marital deduction — the rule that normally lets one spouse leave everything to the other free of estate tax — is not available when the spouse receiving the property is not a U.S. citizen. That is true even if the spouse is a permanent resident. (The deduction does work in the other direction, from a non-citizen spouse to a citizen spouse.)
For lifetime gifts, the amount you can transfer tax-free to a non-citizen spouse is capped at an annual figure rather than being unlimited. For 2026 that ceiling is $194,000.
There is a well-established fix: a qualified domestic trust (QDOT). Instead of leaving property directly to a non-citizen spouse, the U.S. citizen leaves it to a QDOT. The non-citizen spouse is the only beneficiary during their life and can receive the income the trust generates without paying estate tax up front. The estate tax is deferred until the principal is distributed, and if the surviving spouse later becomes a U.S. citizen, the principal can be released with no further tax. A QDOT has to be established and funded by the time the deceased spouse's estate tax return is due, and the trustee must be a U.S. citizen or a U.S. corporation such as a bank or trust company.
Jointly Owned Property Is Treated Differently
When both spouses are U.S. citizens and own a home together, each is presumed to own half. That presumption disappears when one spouse is not a citizen. Say the U.S. citizen spouse dies first and the jointly owned home is worth $200,000. The full $200,000, not half, gets pulled into that spouse's taxable estate unless the non-citizen spouse can prove they contributed toward the purchase. If the non-citizen spouse made $50,000 in payments, the amount included drops to $150,000. And if the couple buys property together and the citizen spouse pays the whole price, half of it can be treated as a gift to the non-citizen spouse.
We Can Help
Estate planning for non-citizens is genuinely complex, and the cost of getting it wrong is real money and real delay for your family. If you are a non-citizen, or you are married to one, we can help you work through the issues — making sure your documents are valid and enforceable, that foreign property is handled correctly, and that your estate and gift tax exposure is kept as low as the law allows. When the time comes, a sound plan also smooths the probate and trust administration that your family will face.
At Marvel Law, we are here to help with understanding, answers, and direction.