Someone Living Abroad Has Died, Leaving Assets in the United States
A parent, a spouse or a client who lived outside the United States has died, and a U.S. bank, broker or custodian holds an account, or the estate includes U.S. real estate. Before the assets can be released, the estate’s U.S. position has to be established and, in most cases, cleared with the IRS. The firm’s attorneys take the estate through these steps.
Law stated as of October 2026
In brief.
- The first question is the decedent’s status: a U.S. citizen, a U.S. domiciliary, or a nonresident who was not a citizen.
- For a nonresident who was not a citizen, shares of U.S. corporations, U.S. mutual funds and exchange-traded funds included, and cash held with a broker are U.S.-situs property. Bank deposits not connected with a U.S. business are not.
- Form 706-NA is required where the U.S.-situs gross estate, increased by adjusted taxable gifts, exceeds USD 60,000. Where a return is required, the institution releases the U.S.-situs property only against a transfer certificate.
- A convention can reduce the U.S. tax, often to zero, but leaves the return and the certificate in place. The treaty position is claimed on Form 706-NA and disclosed.
- Below the threshold, an institution that has no information to the contrary may release on a statement of facts from the executor showing that no certificate is required.
What is happening
The United States taxes the estate of a person who was neither a citizen nor domiciled in the United States only on the property situated here: shares of U.S. corporations and U.S. funds, cash held with a broker, U.S. real estate and tangible property kept in the United States (sections 2103 to 2105 of the Internal Revenue Code). Bank deposits not connected with a U.S. business and the proceeds of insurance on the decedent’s life are not included. Where the U.S. assets, increased by adjusted taxable gifts, exceed USD 60,000, the estate must file Form 706-NA within nine months of the death (sections 6018(a)(2) and 6075(a)). The tax is computed at the rates that apply to citizens, up to 40 percent, against a credit of USD 13,000 (sections 2101 and 2102(b)). A convention with the decedent’s country may reduce the tax, often to zero, but leaves the return in place.
The bank or broker holding the assets is liable for the tax if it releases U.S.-situs property before the IRS has issued a transfer certificate (Treas. Reg. § 20.6325-1). It therefore asks for the certificate, or for a statement of facts where no return is required, and for proof of who may act for the estate under the law of the last domicile: a grant of probate, a certificate of inheritance or a notarial deed, with an apostille and a translation. Where the institution does not accept the foreign document, or the estate holds U.S. real estate, an ancillary probate in the state where the property lies produces the authority it needs. The IRS states a processing time of 12 to 18 months for a certificate requested without a return.
| Asset | U.S.-situs | Note |
|---|---|---|
| Shares of U.S. corporations, U.S. mutual funds and ETFs | Yes | Wherever the account or the certificate is kept (section 2104(a)) |
| Shares of foreign corporations | No | Also when held at a U.S. custodian |
| Deposits with a U.S. bank | No | If not connected with a U.S. trade or business (section 2105(b)(1)) |
| Cash held in a brokerage account | Yes | Not a bank deposit |
| Debt obligations within the portfolio interest exemption | No | Section 2105(b)(3) |
| U.S. real property and tangible property in the United States | Yes | Including works of art kept here, unless on loan to a museum |
| U.S. retirement accounts | Not decided by statute | The prevailing analysis treats the account as U.S.-situs |
| Proceeds of insurance on the decedent’s life | No | Section 2105(a) |
What has to happen, in order
- Establish the decedent’s status
Citizen, U.S. domiciliary, or nonresident who was not a citizen. Domicile means residence combined with the intention to remain (Treas. Reg. § 20.0-1(b)); a green card holder who lived abroad at death may be a nonresident for the estate tax.
- List and value the U.S. assets
Position by position, at the date of death, under the situs rules above.
- Apply the convention
Determine whether one of the fifteen conventions applies, and whether it is of the domicile type or the situs type.
- Establish who may act for the estate
The foreign document with an apostille and a translation, or letters from an ancillary probate in the United States.
- File Form 706-NA
Within nine months of death, with the treaty position disclosed where one is claimed, and pay any tax. Form 4768 extends the time to file by six months, not the time to pay.
- Obtain the transfer certificate
Or, where no return is required, give the institution a statement of facts on which it may rely, and request the IRS letter confirming that no certificate is required.
- Release and distribute
A letter of direction signed as the account is titled, Form W-8BEN-E for the estate and Form W-8BEN for each heir, and the transfer to the heirs.
How the firm helps
The firm’s attorneys handle the U.S. side of the estate from the first call to the release of the assets, and work with the estate’s advisers in the decedent’s country.
- The status and situs determination, set out in writing for the heirs and for the institution.
- Form 706-NA and the treaty position, prepared in the firm’s federal tax practice.
- The request for the transfer certificate, and the correspondence with the bank, broker or transfer agent until the release.
- Ancillary probate in Washington DC, Maryland, Virginia or California, where the firm’s attorneys are licensed.
- The distribution to the heirs abroad, with the withholding forms each payment requires.
What documents to prepare for the initial consultation
- The death certificate
- The will, any codicils and any trust documents
- The document showing who may act for the estate in the decedent’s country, if already issued
- The latest statement of every U.S. account, and the deeds of any U.S. real estate
- Letters received from the U.S. bank, broker or transfer agent
- The decedent’s passports and U.S. visas or green card, and the countries of residence in recent years
- Any U.S. tax returns the decedent filed, including gift tax returns
- A short overview of the assets outside the United States
- The names, addresses and citizenship of the heirs
Copies are sufficient. The firm sets up a secure portal for the documents and reviews them before the consultation.
Under the six domicile-type conventions (Austria, Denmark, France, Germany, the Netherlands, the United Kingdom) the United States may in general tax only real property and business property situated here, so that a portfolio of U.S. shares is often free of U.S. estate tax. The situs-type conventions keep the U.S. situs rules, and most of them grant a pro rata share of the unified credit. In both cases the return and the certificate remain.
Describe the estate in a few lines
The country of the last residence, the U.S. assets and the documents received so far are enough for the firm to say what is needed and how it would proceed.
