Estate planning errors that cross borders:  Six common blunders for US citizens and permanent residents to avoid

Blunder No. 1: Two wills that revoke each other 

For US citizens and permanent residents with homes abroad, drafting separate wills for domestic and foreign assets is a practical alternative to offshore trusts. However, a common mistake arises when standard revocation clauses inadvertently cancel one will with the other. By explicitly stating each will's jurisdiction and carefully coordinating their language, probate conflicts can be avoided. Read the full article here.

Blunder No. 2: Overlooking the role of “cash as king” 

In international estate planning, “cash is king”. While life insurance payouts and cash in US bank accounts are exempt from federal estate tax, non-resident non-citizens should note that funds held in mutual funds, money market funds, or brokerage accounts are not. Strategically depositing cash in bank accounts instead of these financial products can prevent significant tax liabilities. Read the full article here.

Blunder No. 3: Forgetting to file international forms 

Failing to file IRS informational forms can result in severe penalties, especially when reporting foreign trusts, gifts, or interests. For instance, unreported foreign transfers or gifts can incur penalties up to 35% of the value. To mitigate risks, taxpayers should consult experts and explore options like the Streamlined Domestic or Foreign Offshore Procedures to reduce or eliminate penalties for unintentional non-compliance. Read the full article here.

Blunder No. 4: Leaving the US? Take your assets with you

Individuals leaving the US should transfer their assets out of the country to avoid the complications of US federal estate tax (up to 40%) on property left behind. Without proper planning, heirs and financial institutions could face significant liabilities. Strategic asset relocation ensures smoother transitions and avoids unnecessary tax burdens. Read the full article here.

Blunder No. 5: Do not judge a will by its cover 

Conflicting clauses within a will, such as mismatched preambles and residuary clauses, can lead to disputes and financial strain for heirs. For example, a US will may unintentionally conflict with a foreign will due to contradictory language. Careful review of every clause ensures alignment with the estate’s intended scope and jurisdiction. Read the full article here.

Blunder No. 6: Leaving the US? Consider your kids’ plans

When parents return to their home country, children staying in the US for education or work purposes face unique challenges. Planning can ensure smoother transitions and address challenges like guardianship, consent letters for the travel of minors, and managing inheritance for children left in the US. Read the full article here.

---

Diane K. Roskies is a Principal Attorney at Offit Kurman in New York, and advises US and multinational citizens on US and international trust, estate planning, and administration, often involving multiple jurisdictions. Diane represents high-net-worth and ultra-high-net-worth individuals and their families, including those with assets valued at over USD 2 billion. Diane publishes the blog “Lost in Translation: Blunders in International Estate Planning”.