Estate Tax Sunset for Nonresidents

Brent discusses how the sunset of the estate tax exemption in 2026 will also effect non-citizen non-residents of the US significantly (NRAs). He explains how the estate tax treaties work and how the math under some of the treaties could change in 2026 in a way that makes an NRA who is currently safe from estate tax exposed to estate tax thereafter. He also gives an estate tax planning framework for US citizens, NRA’s in treaty jurisdictions, and NRA’s in non-treaty jurisdictions.

The math under the estate tax treaties is illustrated under the following hypothetical:

If a non-resident has a worldwide estate of $8M and $1M is their condo in Miami, and the 2026 exemption is $7M, their 2026 exemption is going to be $875,000 (1/8 x 7 = .875). Today they have plenty of exemption (1/8 x 13.61 = 1.7) under the treaty.

This material is for informational purposes only. The views expressed are those of the speaker as of the date noted and not necessarily of the speaker’s firm or its affiliates.

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