Estate and Gift Tax for US Expats Living Abroad

US citizens are subject to federal estate tax on their worldwide assets at death regardless of where they live, with a lifetime exemption of approximately $13.6 million per person in 2024, though that exemption is scheduled to drop significantly when current law sunsets after 2025. Non-resident aliens are subject to US estate tax only on US-situs assets, which include US real estate, US brokerage accounts, and shares of US corporations. If you are a US citizen married to a non-citizen spouse, the unlimited marital deduction for transfers between spouses does not apply in full: transfers to a non-citizen spouse are limited to an annual amount ($185,000 in 2024) unless the transfer goes into a Qualified Domestic Trust (QDOT). US expats with foreign assets and foreign-citizen heirs should consider how the US estate tax interacts with local inheritance taxes in their country of residence, since some US tax treaties address the two countries' estate taxes. US persons who receive an inheritance from a foreign person (a non-US citizen parent or relative, for example) must report it on Form 3520 if the total value received from a foreign estate exceeds $100,000 in a calendar year.