Cross-Border Estate Planning for Real Estate Investors
Protecting Wealth, Minimizing Taxes, and Avoiding International Headaches
by Stephen Morris CPA, MBT, CCIM
Contents
If you own property in more than one country, or plan to, your estate plan needs to do more than distribute assets. It needs to navigate multiple legal systems, conflicting tax regimes, and cross-border inheritance rules.
Fail to plan globally? You might trigger double taxation, force your heirs into foreign courts, or have your property distributed under unfamiliar laws ⚖️
This Advise RE international tax specialists guide will break down what cross-border estate planning really means, and how real estate investors can protect their global portfolio 🧩
💡 Why Cross-Border Planning Is Essential
International real estate creates unique estate complications:
- Different countries have forced heirship laws (e.g. France, Colombia, Thailand)
- US citizens can face worldwide estate taxation
- Foreign-owned US property is subject to estate tax starting at $60K
- Heirs may need to go through foreign probate just to take title
The solution? A coordinated estate plan that takes into account where you live, where your assets are, and your citizenship/residency status 🗺️
🧾 Common Challenges for Global Investors
1️⃣ Double Estate Taxation
You might pay estate tax in the U.S. and in the country where the property is located. Few estate tax treaties exist, and many don’t fully eliminate this risk.
Example: A non-resident owning U.S. property worth $1.2M could face a 40% U.S. estate tax on anything over $60K. If the home country also taxes the transfer, the effective rate could exceed 60%.
2️⃣ Forced Heirship Laws
In civil law countries like France or Mexico, your children (or even parents) may be entitled by law to a share of your estate, regardless of what your will says.
You’ll need local legal strategies (such as usufruct structures or local wills) to navigate these systems.
3️⃣ Title Transfer Issues
Your U.S. revocable living trust may not be recognized abroad. This can create delays and confusion when your heirs try to transfer property titles in a foreign jurisdiction.
Foreign “notario” systems often require domestic notarization, apostilles, translations, and court recognition of U.S. documents 📝
🛠️ Key Tools for Cross-Border Estate Planning
✅ 1. Situs-Specific Holding Entities
Use local holding companies (e.g., Spanish SL, UK Ltd, or Canadian corporation) or U.S. LLCs owned by a foreign trust to shield assets and streamline succession.
✅ These entities help manage liability, facilitate transfer, and in some cases avoid local estate tax.
✅ 2. Dual Wills Strategy
One will for your U.S. assets. One will for your foreign assets, each compliant with local law.
⚠️ These should be coordinated, not overlapping. Otherwise, one could invalidate the other.
✅ 3. Irrevocable Trusts or Holding Structures
Especially valuable for non-residents owning U.S. real estate, since foreign individuals get no unified estate tax credit beyond $60K.
🔐 A foreign irrevocable trust or foreign corporation can hold the U.S. property, sidestepping the U.S. estate tax entirely.
✅ 4. Treaty Review and Planning
Where applicable, estate tax treaties can offer relief, but only if your planning aligns with treaty definitions of residency, domicile, and asset situs.
🧠 We advise you based on U.S. treaties with countries like the UK, Germany, France, and Canada.
🧬 Real-Life Example: Dual Citizen, Dual Country Property
Case: A U.S./French dual citizen owns:
- A flat in Paris
- A triplex in Los Angeles
- A Costa Rican rental villa
The Risk:
- Forced heirship in France
- US estate tax on worldwide assets
- Costa Rican property not covered by any tax treaty
The Plan:
- Separate wills (France + U.S.) with matching terms
- French usufruct structure for family protection
- US revocable trust for L.A. property
- Costa Rican SA company to hold villa with local nominee director
- Life insurance to provide liquidity for tax exposure
Result: No probate in the U.S. or France, reduced risk of forced heirship conflict, and clean title transition for heirs across all 3 properties.
📍 Where to Start
Cross-border estate planning doesn’t begin with a trust or a will. It begins with questions:
- Where are your properties?
- Where are you domiciled?
- What citizenship(s) and residency do you hold?
- Who are your intended heirs, and where do they live?
From there, we craft a plan that integrates legal, tax, and administrative frameworks into a seamless, globally-compliant structure.
✉️ Ready to Secure Your Legacy Across Borders?
Let’s build an estate plan that spans continents, reduces risk, and respects your vision for the future.
Whether you’re an expat investor, a digital nomad landlord, or a citizen of the world, at Advise RE, we’ve got the strategy. Book your strategy call today. International estate planning. Done right.
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