Estate Planning

The Many Forms of Texas Probate

In the after math of losing a loved one, nobody relishes the experience of navigating a complex, often trying legal process. This said, not all probate experiences are equal. Depending on the process required for your case, the experience can be relatively painless, especially if you entrust an experienced attorney to guide you through the many steps.

The Importance of Family Business Succession Planning

An effective business succession plan will give the business an opportunity to maximize its assets, minimize tax liability and always sustain a seamless running of the business.

Five Tips for Talking to Aging Parents About Estate Planning Needs

This past year has taught all of us that tomorrow cannot be taken for granted, leading to an increasing number of people to plan and many more to recognize the need to speak to parents about doing the same. If you are an adult child trying to figure out how to talk to your aging mother or father about estate planning, let the following five tips serve as a guide.

Do I Need to Update My Estate Plan When I Move to Texas?

If you are planning a move to Texas or have recently arrived to the state, updating your estate plan is an important item to add to your to-do list. Legal requirements related to estate planning … Read more

The Estate Planning Documents Every Young Adult Needs

Silver linings of the Covid-19 pandemic are few but one worth underscoring is the lesson we have all received in not taking anything for granted. This past year showed that, indeed, no one knows what … Read more

Hope for the Best, Plan for the Worst: Essential Estate Planning Documents for Troubled Times

Having both medical and financial powers of attorney in place has never been more important. The Covid-19 pandemic presents a threat to all of us, regardless of age or health. This is a tragic and frightening fact and while being prepared does not erase it, it at least eases some of the burden.

Small Estate Affidavit Texas

Small Estate Affidavit For people that do not have a substantial estate, going through probate seems like a waste of money and time. For example, some people only own a family home and a bank … Read more

Foreign Inheritance Taxation

IRS Rules On Foreign Inheritance

It is not unusual for foreigners to leave inheritance for their American kin. The greatest concern for Americans who receive this inheritance is that they may have to pay taxes on that inheritance. But in the United States you don’t have to pay tax for the inheritance. All you must do is report the inheritance to the IRS if the amount exceeds $100,000.

Assets In The United States And Foreign Relatives Domiciled In The US

You should understand that your inheritance will not be taxed only if the foreign relative does not live in the United States and is not a United States Citizen. Foreign nationals living in the USA with Green Cards and those without green cards are considered to be domiciled in the United States. However, if your inheritance is from a foreign relative that was living in a foreign country, no U.S estate tax will be imposed on the transfer of that inheritance, and no income tax will be imposed on inheritances brought to the United States.

If the value of the inheritance exceeds $100,000, you need to report it by filing Form 3520 at the same time you file your tax return for the year. This form is not a tax return but is meant for information. People who do not file Form 3520 may face a penalty equal to 5 percent or 25 percent of the inheritance depending on a number of factors.

Keeping Inheritance In A Foreign Bank Account

American citizens and Green Card holders that have a foreign bank account balance that is more than $10,000, must file a Report of Foreign Bank and Financial Accounts (FBAR). This form can be filed electronically but you should not wait to file it with your tax returns. A tax attorney can look at your case and advise you on the best thing to do in your situation.

What About Gifts?

Any gift received from foreign nationals that are domiciled in the U.S. will be taxed regardless of where the asset is located. However, you can give a gift of up to $152,000 per year to your non-US citizen spouse without paying any tax. For gifts received from foreign nationals that do not live in the United States, the recipient does not have to pay the tax because the tax burden for that gift falls on the gift giver. But you will still have to report to the IRS if the value of the gift from a nonresident alien exceeds $100,000.

Gifts coming from related parties that are nonresident aliens should be combined, and if the total exceeds $100,000 you should report it to the IRS. Avoid playing any tricks on the IRS. If the gift is from a corporation or foreign partnership, then you only need to report it if it has a value exceeding $16,076. You report a gift to the IRS by filing a Form 3520 accurately and on time. Consult a tax attorney any time you receive a gift or inheritance of significant amounts to avoid problems with the IRS.