Living in the United States without U.S. Citizenship
A green card holder or a long-term visa holder has built a life in the United States and keeps ties, assets and perhaps a future at home. For the estate tax the question is domicile, not the passport; for the marital deduction, the spouse’s citizenship; for the reporting, every account and company abroad. The firm’s attorneys prepare the estate plan and the filings that fit a life in two countries.
Law stated as of October 2026
In brief.
- A non-citizen who lives in the United States with the intention to remain is domiciled here for the estate and gift tax, and the worldwide estate is taxed above the exclusion of USD 15,000,000 in 2026 (Treas. Reg. § 20.0-1(b); section 2010(c)). Immigration status is evidence of intention, not the test.
- The marital deduction is denied for property passing to a spouse who is not a U.S. citizen, unless it passes to a qualified domestic trust; lifetime gifts to such a spouse are free only up to USD 194,000 a year in 2026 (sections 2056(d) and 2523(i)).
- Accounts, companies, trusts and pensions at home are reported every year on the foreign account report, Form 8938, Form 3520 and Form 5471; foreign funds fall under the PFIC rules.
- A green card held in eight of the last fifteen years makes its holder a long-term resident, to whom the exit tax applies on giving the card up (section 877(e)(2)).
- The home country may still tax the estate: Germany follows its citizens for five years after departure, and German real estate is always taxed; the estate tax conventions decide which country gives way.
What is happening
The estate tax does not use the income tax tests. A person is domiciled in the United States when living here without a definite present intention of leaving (Treas. Reg. § 20.0-1(b)(1)); a green card is strong evidence of that intention, a temporary visa does not exclude it, and the facts decide: the home kept abroad, where the family lives, the business, the statements made in visa applications and wills. A domiciliary’s estate is taxed on property everywhere, with a basic exclusion amount of USD 15,000,000 for deaths in 2026 and a top rate of 40 percent (sections 2001 and 2010(c)); the same exclusion covers lifetime gifts. The foreign real estate and the company at home are part of that estate, and a foreign inheritance tax paid on them is credited (section 2014). The estate tax conventions of six countries add a fiction: a citizen of the other country who has lived in the United States for fewer than a set number of years, ten under the German convention, is deemed domiciled at home, and the United States then taxes only real estate and business property situated here.
Marriage to a spouse who is not a citizen changes the plan. The unlimited marital deduction is denied where the surviving spouse is not a U.S. citizen, whatever the spouse’s residence, unless the property passes to a qualified domestic trust with a U.S. trustee or the spouse becomes a citizen before the estate tax return is filed (sections 2056(d) and 2056A); lifetime gifts to such a spouse are excluded only up to USD 194,000 a year in 2026 (section 2523(i)), and joint property is included in the first spouse’s estate except to the extent the survivor can show his or her own contribution (section 2040(a)). Meanwhile the resident reports what is kept at home: the foreign account report where the accounts exceed USD 10,000 in aggregate, Form 8938 above USD 50,000, or USD 100,000 for a couple, Form 3520 for foreign trusts, foundations and large gifts and inheritances from abroad, Form 5471 for a foreign company the resident controls, alone or with other U.S. persons; foreign funds are passive foreign investment companies. A green card holder who has held the card in eight of the last fifteen years is a long-term resident: giving the card up, or claiming treaty residence at home, is an expatriation with the exit tax for those above the thresholds (sections 877(e) and 877A). At home, the inheritance tax may follow the family for years; Germany treats its citizens as fully liable for five years after they leave (§ 2(1) Nr. 1 b ErbStG).
| Question | Rule for a non-citizen living in the United States |
|---|---|
| Estate tax base | Worldwide estate once domiciled; exclusion USD 15,000,000 (2026), 40 percent above it |
| Transfers to a spouse who is not a citizen | No marital deduction unless through a qualified domestic trust; lifetime gifts excluded up to USD 194,000 a year (2026) |
| Transfers to a spouse who is a citizen | Unlimited marital deduction |
| Joint property with a spouse who is not a citizen | Included in the first estate except to the extent of the survivor’s proven contribution (section 2040(a)) |
| Foreign accounts and assets | FBAR above USD 10,000; Form 8938 above USD 50,000 (USD 100,000 joint); Form 3520; Form 5471 |
| Foreign funds | PFIC regime (section 1297) unless an election is made |
| Giving up the green card after 8 of 15 years | Long-term resident: exit tax if the net worth, tax or certification test is met (sections 877(e), 877A) |
| Inheritance tax at home | Follows citizens for a period after departure (Germany: five years); real estate at home always taxed there |
What has to happen, in order
- Establish domicile and its evidence
The intention to remain, documented in both directions: for the plan that assumes U.S. domicile and for the treaty fiction that may displace it.
- Inventory the estate in both countries
Accounts, real estate, companies, pensions, life insurance and trusts, with title, beneficiary designations and the law that governs each.
- Plan for the spouse
A qualified domestic trust in the will or trust, the annual gifts of USD 194,000, life insurance in the right hands, or the spouse’s naturalization.
- Write the documents
A will or revocable trust under the law of the state of residence, coordinated with any will at home and the home country’s forced heirship or marital property regime; powers of attorney and health care directives.
- Put the reporting in order
The foreign account report, Forms 8938, 3520 and 5471, and the treatment of foreign funds and pensions; the correction of past omissions under the available procedures.
- Decide on the card
Keep it, naturalize, or give it up before the eighth year: each has estate tax, income tax and exit tax consequences.
- Review with each change
A move, a marriage, a death at home, a new company: the plan is checked against the facts and the current law.
How the firm helps
The firm’s attorneys prepare estate plans for non-citizens in the United States, settle questions of domicile and put the reporting of foreign assets in order, in coordination with the advisers at home.
- The domicile analysis and, where a convention applies, the treaty position.
- The will or revocable trust, the qualified domestic trust and the gifting plan for a spouse who is not a citizen.
- The coordination with the will, the marriage contract and the succession law at home.
- The foreign asset reporting and the U.S. returns, prepared in the firm’s federal tax practice.
- The decision on the green card: naturalization, keeping the card from abroad, or expatriation, with its figures.
What documents to prepare for the initial consultation
- The green card or visa, and the dates of arrival and of any long stays abroad
- Existing wills, trusts, powers of attorney and marriage contracts, in the United States and at home
- Statements of U.S. and foreign bank, brokerage and fund accounts
- Deeds of real estate in the United States and abroad
- Documents on companies at home: articles, shareholder lists, latest financial statements
- Pension and life insurance statements, with beneficiary designations
- Trust deeds or foundation statutes of any structure the family has set up
- The last three U.S. income tax returns, with any Forms 8938, 3520 and 5471 filed, and the FBARs
- The citizenship and residence of the spouse and the children
Copies are sufficient. The firm sets up a secure portal for the documents and reviews them before the consultation.
The estate tax conventions with Austria, Denmark, France, Germany, the Netherlands and the United Kingdom contain a domicile fiction for citizens of the other country in their first years in the United States and allocate the taxing rights by type of property; the German convention also grants a marital deduction, on election, equal to the lesser of the property passing to the spouse and the exclusion amount, without a qualified domestic trust (Article 10(6)). The income tax conventions decide residence where both countries claim it.
Describe the situation in a few lines
Citizenship, immigration status, the family and where the assets are: that is enough for the firm to say what the plan should contain and how it would proceed.
