Cardoso Estate Planning Firm > Dual Citizens
Estate Planning for Dual Citizens
Author: Danielys Cardoso | 5 min of lecture | july 30, 2025
Introduction: The Unique Challenges of Cross-Border Estate Planning
Estate planning is complex—even more so when your life spans two countries. If you’re a dual citizen, you likely hold assets in more than one jurisdiction, are subject to multiple sets of inheritance and tax laws, and may even face double taxation if you’re not careful.
Whether you’re a U.S. citizen living abroad or a foreign national residing in the U.S., estate planning for dual citizens requires extra diligence, tailored legal documents, and cross-border tax awareness. The good news? With the right plan, you can protect your assets, reduce taxes, and honor both countries’ laws.
Common Scenarios Dual Citizens Face
Let’s explore the real-life situations that often trigger estate planning concerns for dual nationals.
– Owning Property in Two Countries
If you own a vacation home in Mexico and rental property in California, each country may have its own rules for probate, inheritance, and capital gains. Your estate plan needs to comply with both—and avoid triggering two separate court proceedings.
– Earning or Inheriting Abroad
Dual citizens frequently:
- Earn income abroad but retire in the U.S.
- Inherit assets from family members overseas
- Hold foreign pensions, trusts, or business interests
If not reported properly, these assets can lead to IRS penalties or foreign tax complications—even if you live in just one of your two countries.
– Married to a Non-U.S. Citizen
If your spouse isn’t a U.S. citizen, leaving them assets can trigger unintended estate tax liabilities. In such cases, a Qualified Domestic Trust (QDOT) may be required to defer taxes.
Tax Traps to Avoid When You're a Dual Citizen
Estate taxes don’t end at borders. Many dual citizens accidentally leave their families facing unexpected bills and delays due to cross-border tax oversights.
– Estate Tax Exposure in the U.S.
The U.S. taxes worldwide assets for its citizens—even if they live abroad. That includes:
- Foreign real estate
- Foreign bank accounts
- Retirement plans from another country
If your estate exceeds the federal exemption limit ($13.61 million in 2024), it could be subject to estate taxes up to 40%.
– Foreign Inheritance Rules
Countries like France, Germany, or Japan have forced heirship laws, which dictate how much must go to children or spouses—overriding your wishes.
Other nations tax the recipient of an inheritance rather than the estate, complicating your heirs’ tax obligations.
– Double Taxation Risks
Some estates are taxed twice—once in the U.S. and again in the foreign country. Tax treaties may reduce or eliminate this risk, but only with careful coordination of estate plans and tax filings.
Legal Tools and Strategies That Work
To minimize complications, dual citizens need synchronized planning between both countries of citizenship and/or residence.
– Foreign and Domestic Wills
A separate will for each jurisdiction may be advisable, provided:
- The documents don’t contradict each other
- One does not revoke the other
- Both are recognized under local law
This avoids the need for international probate and ensures assets in each country pass smoothly.
– International Trusts and Tax Treaties
Certain trusts may work across borders, but only if:
- Recognized under both legal systems
- Structured to comply with tax treaties
- Disclosed correctly to the IRS and foreign tax agencies
In some cases, foreign grantor trusts or irrevocable life insurance trusts (ILITs) can protect non-U.S. assets.
– QDOTs for Non-Citizen Spouses
If your spouse isn’t a U.S. citizen, a QDOT trust allows you to defer estate taxes until your spouse dies—provided the trust meets IRS requirements.
This tool is essential for dual-national couples where only one partner holds U.S. citizenship
Case Study: A Tale of Two Estates (U.S. and France)
Marie is a dual citizen of the U.S. and France. She owns:
- An apartment in Paris (worth $1.2 million)
- A condo in Miami (worth $600,000)
- A French pension and U.S. 401(k)
She created only a U.S. will, unaware that:
- French law restricts how much can go to her surviving partner (they’re unmarried)
- France taxes inheritances at the recipient level, not estate level
- She might face double taxation on her pension without proper disclosure
With the help of a cross-border estate planning attorney, she creates:
- A U.S. living trust for her U.S. assets
- A French testamentary will that complies with French forced heirship laws
- A foreign asset disclosure strategy to comply with the IRS (FBAR and FATCA)
Result: A seamless plan that minimizes taxes, honors both countries’ rules, and protects her partner and beneficiaries.
FAQs: Estate Planning for Dual Citizens
Do I need two wills if I own assets in two countries?
Often yes, but they must be coordinated carefully to avoid revocation or duplication.
Will my foreign spouse owe U.S. estate taxes if I die first?
Yes—unless you use a QDOT trust or your estate falls below the exemption threshold.
Does the U.S. tax my foreign property?
Yes, U.S. citizens are taxed on worldwide assets, even if the property is abroad.
Can I reduce double taxation?
Possibly. The U.S. has estate tax treaties with over 15 countries, including Canada, Germany, France, and the UK. Work with a tax attorney to apply treaty benefits.
Are trusts recognized outside the U.S.?
Not always. Some civil law countries (like Spain or France) don’t recognize trusts the way the U.S. does. Use alternative structures or work with a local attorney.
Final Thoughts: Global Citizenship, Local Compliance
Being a dual citizen is a privilege—but it also comes with legal responsibility. To protect your assets and loved ones across borders, your estate plan must:
- Comply with laws in each country
- Avoid double taxation
- Transfer assets efficiently and fairly
- Coordinate with local advisors and cross-border specialists
Don’t leave your estate vulnerable to confusion, delay, or excessive taxation. Partner with an experienced estate planning attorney for dual citizens who can navigate the complexities and give you clarity across all your jurisdictions.
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Danielys Cardoso is a Florida-based Estate Planning Attorney and founder of her own firm. She helps families, professionals, and couples—married or not—create personalized plans to protect their legacy and loved ones. With years of legal experience, Danielys is known for making estate planning clear, approachable, and empowering.