Americans with Property and Accounts Abroad
A U.S. citizen or resident owns a house in Europe, keeps accounts abroad or holds a share in a family company at home. The U.S. estate plan has to take in assets that pass under another succession law, taxes paid to another country and reporting duties that run every year. The firm’s attorneys build one plan for both sides.
Law stated as of October 2026
In brief.
- The estate of a U.S. citizen or domiciliary includes property everywhere, the house and the accounts abroad included (section 2031); the exclusion is USD 15,000,000 in 2026, and a foreign inheritance or estate tax paid on foreign property is credited (section 2014).
- Real estate abroad passes under the succession law of its country, which may give children a reserved share the U.S. will cannot override; in the European Union a citizen may choose the law of his or her nationality for the whole succession (Articles 21 and 22 of the Succession Regulation).
- Foreign accounts above USD 10,000 are reported each year on the foreign account report, foreign financial assets above the thresholds on Form 8938, foreign trusts and inheritances from abroad above USD 100,000 on Form 3520; foreign funds are PFICs.
- A U.S. revocable trust is unknown to many foreign legal systems and can be taxed there as a transfer to a foreign entity; banks abroad release accounts against a certificate of inheritance or a European Certificate of Succession, not against letters testamentary.
- A will for each country, or one will that both systems accept, an executor who can act in both, and the papers each bank abroad will ask for, prepared in advance.
What is happening
For the U.S. estate tax, citizenship or domicile decides, and the estate includes property wherever it lies: the apartment in Paris, the account in Zurich, the shares of the family GmbH (section 2031). For deaths in 2026 the basic exclusion amount is USD 15,000,000 and the rate above it 40 percent (sections 2001 and 2010(c)); where the foreign country levies an estate or inheritance tax on the property situated there, the U.S. tax is reduced by a credit for it (section 2014), and the conventions with fifteen countries allocate the taxing rights and the credits. During life, the owner reports every year: the foreign account report to FinCEN where the foreign accounts together exceed USD 10,000 at any time (31 CFR 1010.350; due 15 April with an automatic extension to 15 October), Form 8938 where specified foreign financial assets exceed USD 50,000, or USD 100,000 for a couple, with higher thresholds for those living abroad (Treas. Reg. § 1.6038D-2), Form 3520 for foreign trusts and for gifts and inheritances from abroad above USD 100,000 (section 6039F), and Form 5471 for a foreign company the owner controls, alone or with other U.S. persons; a foreign investment fund is a passive foreign investment company in U.S. hands.
The succession itself follows other rules abroad. Real estate passes under the law of the country where it lies, and most civil law countries give children and sometimes the spouse a reserved share that no will can cut; within the European Union the law of the deceased’s habitual residence governs the whole succession, but a person may choose the law of a country whose nationality he or she holds, in a will (Articles 21 to 23 of Regulation (EU) No 650/2012), a choice open to a U.S. citizen as well. A U.S. revocable trust is unknown to many of these systems and can be taxed there as a transfer to a foreign entity; banks abroad ask for a certificate of inheritance or a European Certificate of Succession, not for letters testamentary. Where a U.S. person inherits from abroad, Form 3520 and the PFIC and foreign trust rules follow the inheritance. Children who live abroad raise questions of their own, set out on a separate page.
| Asset or heir abroad | United States | The other country |
|---|---|---|
| House or apartment abroad | In the gross estate; foreign tax credited (section 2014); gain and rent taxed, with the foreign tax credit | Succession law of the situs; reserved shares; local inheritance or estate tax |
| Bank and brokerage accounts abroad | In the gross estate; FBAR and Form 8938 each year | Released against a certificate of inheritance or a local grant; local tax on the heir |
| Foreign investment funds | PFIC regime unless an election is made | Ordinary fund taxation |
| Share in a family company abroad | In the gross estate; Form 5471 where U.S. persons control the company | Succession and company law of the seat; business property reliefs |
| Foreign pension or life insurance | In the gross estate; treaty rules on the income | Local rules; often outside the local estate |
| Inheritance or gift received from abroad | Form 3520 above USD 100,000; no U.S. income tax on the inheritance itself | Local inheritance or gift tax may apply |
What has to happen, in order
- Inventory both sides
Assets, title, governing law and the heirs’ countries; the reserved shares and marital property rules that apply abroad.
- Decide the law and the documents
One will or a will for each country, the choice of law under the Succession Regulation, the role of a revocable trust and where it should not be used, and an executor or heir who can act in each country.
- Plan the taxes together
The U.S. estate tax with the foreign credit, the foreign inheritance tax on the heirs, the conventions, and the lifetime gifts that reduce both.
- Put the reporting in order
FBAR, Forms 8938, 3520 and 5471, and the PFIC position of foreign funds; the correction of past omissions.
- Prepare the papers the foreign bank will ask for
Apostilles, translations, a certificate of inheritance where the country issues one, and instructions for the heirs.
- Plan for the property during life
Rent and gains taxed in both countries with the foreign tax credit, and a sale or a gift of the property abroad tested in both before it is made.
- Review on each change
A purchase or sale abroad, a child’s move, a change in the foreign law: the plan is checked against the facts.
How the firm helps
The firm’s attorneys bring the foreign assets and the foreign heirs into one estate plan, coordinate the wills and the reporting, and work with the notary or the attorney in the other country.
- The estate plan for both countries: wills, choice of law, trusts where they work, and the executor who can act abroad.
- The tax plan: U.S. estate tax, the foreign credit, the conventions and the heirs’ own taxes.
- The annual foreign asset reporting and the treatment of foreign funds, prepared in the firm’s federal tax practice.
- The administration after a death, in the United States and with the foreign bank or notary.
- Correspondence with the family’s advisers abroad, in English, German or French.
What documents to prepare for the initial consultation
- Existing wills, trusts and powers of attorney, in the United States and abroad
- Deeds of real estate abroad and the purchase records
- Statements of foreign bank, brokerage and fund accounts
- Documents on foreign companies: articles, shareholder lists, latest financial statements
- Foreign pension and life insurance statements
- The last three U.S. income tax returns, with the FBARs and Forms 8938, 3520 and 5471 filed
- Marriage contract or a note on the marital property regime, if married abroad
- Inheritance or gift tax assessments received abroad in the past
- The names and countries of residence of the intended heirs
Copies are sufficient. The firm sets up a secure portal for the documents and reviews them before the consultation.
The estate tax conventions with fifteen countries decide which country taxes which property and how the other credits the tax; the German convention, for example, leaves the German real estate to Germany, credits the German tax on it in the United States, and credits the U.S. tax on the other property in Germany for an heir who lives there (Article 11). The income tax conventions govern the income from the foreign assets and the heirs’ distributions.
Describe the situation in a few lines
Which country, which assets and who the heirs are: that is enough for the firm to say what the plan needs on each side and how it would proceed.
