Estate Planning for Diplomats in the United States

Diplomats in the United States are considered non-resident aliens. Many US laws do not apply to them.

Some of their assets located in the United States, however, pass according to the local law. foreign-investors

In certain cases it is advisable for married couples to hold real estate as tenants by the entirety. Thus, the surviving spouse becomes the sole owner by operation of law, without court involvement, which simplifies the question of succession.

The same applies to vehicles. These should be titled jointly with right of survivorship.

Then only the surviving spouse will need to dispose of these assets through a will.

To dispose of real estate and vehicles located in the United States (as well as other assets such as interest in a US business enterprise), it is advisable to set up a will according to the laws of the state where the property is located. A diplomat will generally have set up a testament according to his own country. That testament may or may not be recognized in the state where the property is located. This depends whether both involved jurisdictions (the country of nationality and the US state where the assets are located) are signatories of the Washington Convention on Wills.

Financial assets such as bank and brokerage accounts should pass by beneficiary designation. In this case the assets are transferred to the designated beneficiary by virtue of the contract between the account holder and the financial institution. Again, no courts are involved.

The US estate of a non-resident alien generally needs to pay estate tax on the US-situs property. The exemption amount is only USD 60’000. Note that most bank deposits are not considered US-situs property.

The above information applies not only to diplomats, but also to many employees of the World Bank, the International Monetary Fund and certain other international organizations. However, many of these individuals may be considered US domiciliaries if they live in the United States with no present intent to leave.


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