Every year the world gets a little bit smaller. As travel between countries becomes easier, and businesses go global, and people from different countries mix much more than they did just a few decades ago.
One consequence of the ever shrinking globe is that international marriages are far more common today than they have ever been. In fact, nearly five million Americans were married to someone from another country in 2010 – double the number of international marriages that existed in 1960. While it is clear that love knows no borders, the partners in an international marriage may find some practical issues that must be addressed as a result of the marriage. Estate planning is one area that should be paid particular attention to in an international marriage.
While there are many areas of your estate plan that should be reviewed if you enter into an international marriage, the marital exemption is at the top of the list. According to American tax laws, an individual may leave an unlimited amount of assets to his or her spouse upon death free from estate and gift taxes if both spouses are U.S. citizens. Individuals with a moderate to large estate frequently count on this provision of the tax code to ensure that their wealth is passed to a spouse without incurring a tax burden. If, however, your spouse is not a U.S. citizen, anything that is not exempted or excluded from your estate could incur a tax burden as high as 40 percent.
If you are part of an international marriage, be sure you talk to your estate planning attorney to determine if you need to make any changes to your estate plan as a result.