Today, moving across the world is far more common than it used to be. More college-age students leave their home countries to pursue educational experiences abroad, and many often remain in the country in which they choose to study. Others leave their home country for a job opportunity or to start a new family of their own. Whatever the reason for leaving, many residents of the United States born in other countries that still have strong, close familial ties in those foreign countries may be at risk of losing portions of the inheritance their family members in other countries may wish to give them.
Not every country has a version of the estate tax, though the United States estate tax is not the highest estate taxing country out there according to Tax Foundation. As a result, residents of many other countries may not have to contend with an estate tax in planning to distribute their estate. Leaving an inheritance to their children outright is likely commonplace and causes little disruption to the inheritance process in many places. However, when a citizen of a foreign country wants to leave an inheritance to their child that may be a U.S. citizen, there can be estate tax complications. With the United States estate tax rate of 40 percent, this can have a significant impact on a U.S. child’s foreign inheritance.