Foreign Nationals

Individuals who are not U.S. Citizens but have assets in the U.S. as well as individuals who are U. S. citizens but whose spouse is not, have a special estate and tax planning to be considered.  Nonresident aliens are limited to a $60,000 estate tax exclusion on U.S. based assets. U.S. based assets owned by a nonresident alien may experience a great deal of estate tax if there is no planning in place.  U.S. based assets includes all tangible property and real estate located in the U.S., or stocks and ownership interest in a U.S. corporation.   Life insurance offers many benefits to the owner and beneficiaries regardless of their citizen status.

Here are characteristics of a life insurance policy that may assist foreign nationals with their special estate and tax planning needs. 

• The proceeds payable under a life insurance policy are not considered a tangible U.S. based asset and are not subject to U.S. estate taxes for non-resident aliens. 
• Benefits payable under a life insurance policy are generally income tax free to help pay for any U.S. estate taxes without having to sell their assets.     
• A permanent life insurance policy accumulates cash value and it is tax-deferred. The policy owner can be accessed income tax free for their business or personal use.