Inheritance laws in the United States allow foreign heirs to inherit US assets, but the rules are determined by the deceased’s domicile, citizenship, and where the assets are located.
What is true of inheritance laws in the United States for expats is that federal estate tax rules apply nationwide, while probate and distribution are controlled by state law.
This article covers:
- How inheritance works in the US
- How is inheritance divided in the US?
- Can a foreigner inherit property in the US?
Key Takeaways:
- Foreign citizens can legally inherit US property and assets.
- US estate tax applies based on domicile and asset location, not residency alone.
- The US has no federal inheritance tax, only estate tax at the federal level.
- State probate and tax rules can significantly affect expat estates.
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The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.
What is the inheritance law in the USA?
Inheritance laws in the United States are governed primarily at the state level, while inheritance and estate taxes are handled at the federal level.
This means that probate procedures, forced heirship rules, and property distribution can vary significantly depending on the state where the assets are located.
The US does not have a national inheritance law system like many civil law countries.
Instead, individuals have broad freedom to decide who inherits their estate, provided they comply with federal tax rules and state probate laws.
How does inheritance work in the US?
In the US, inheritance typically follows either a will or intestate succession laws if no will exists.
When someone dies, their estate goes through probate, a legal process that validates the will, identifies heirs, pays debts, and distributes assets.
If the deceased was an expat or owned property in multiple states or countries, probate may occur in more than one jurisdiction.
If someone dies intestate, most states follow a similar priority for distributing the estate:
- Spouse – typically receives a share or all of the estate, depending on state law and whether there are children.
- Children – biological and legally adopted children usually inherit next, often sharing the estate equally.
- Parents – inherit if there is no surviving spouse or children.
- Siblings – full siblings inherit if no spouse, children, or parents are alive.
- More distant relatives – such as grandparents, aunts, uncles, or cousins, inherit if no closer family exists.
For expats and foreign heirs, it’s important to note that US-situs assets like real estate, bank accounts, and investments, are subject to these rules even if the deceased or heir lives abroad.
Having a valid US will ensures assets are distributed according to your wishes and can help prevent disputes or delays in probate.
Can a foreign citizen inherit property in the US?
Yes, a foreign citizen can inherit US property without restriction based on nationality.
US law allows non-citizens to inherit real estate, bank accounts, investments, and other assets located in the United States.
However, while ownership is permitted, taxation and reporting obligations may differ for non-US heirs.
Foreign heirs may face US estate tax exposure, withholding rules, or additional compliance requirements depending on the asset type and value.
How much money can a non-US citizen inherit?
There is no limit on how much money a non-US citizen can inherit from a US estate.
However, tax treatment differs significantly based on the residency and citizenship status of the deceased.
If the deceased was a US citizen or US domiciliary, a large federal estate tax exemption applies.
If the deceased was not a US domiciliary, only US-situs assets are taxable, and the exemption is much lower, which can result in estate tax exposure for foreign heirs.
How much can you inherit in the US without paying taxes?
You can inherit up to $15 million in 2026 without federal estate tax if the deceased was a US citizen or domiciliary, because the federal estate tax exemption has been raised for that year.
For non-US domiciliaries, the exemption for US-situs assets remains only $60,000, meaning US real estate or investments above that amount may trigger federal estate tax even if the heir is foreign and the deceased lived abroad.
State-level estate or inheritance taxes may also apply in some states, potentially reducing the tax-free amount heirs receive.
Domicile vs Residency: Why It Matters More Than Where You Live
For US expats, inheritance outcomes often hinge on domicile rather than physical residence.
While residency reflects where someone lives, domicile is a legal concept tied to long-term intent, such as where a person considers their permanent home.
An expat may live abroad for years but still be considered domiciled in a US state if they retain significant ties, such as property ownership, voter registration, or close family connections.
This can subject their estate to that state’s probate rules, estate taxes, or inheritance taxes, even if they have not lived there recently.
Misunderstanding domicile is one of the most common estate planning mistakes among expats.
Without clearly establishing or severing domicile, heirs may face unexpected tax exposure, multiple probate proceedings, or legal disputes across jurisdictions.
For expats with assets in more than one country, clarifying domicile and aligning estate documents accordingly is essential to avoid unintended consequences.
Conclusion
Inheritance laws in the United States give expats significant flexibility but also introduce complexity when assets or heirs cross borders.
Foreign citizens can inherit US assets, but estate tax exposure, probate rules, and reporting obligations vary depending on domicile and asset location.
For expats, understanding how US inheritance laws interact with foreign tax systems is essential for effective estate planning and wealth preservation.
FAQs
Is it better to gift money or leave it as an inheritance?
Leaving assets as an inheritance is often more tax-efficient in the US because heirs may benefit from a step-up in basis.
Gifting money during your lifetime can reduce the taxable value of your estate, but US gift tax rules and reporting requirements apply.
The optimal approach depends on the type of assets involved, their value, and cross-border considerations for expats.
Can I move abroad to avoid inheritance tax?
Moving abroad does not automatically eliminate US estate tax exposure.
US citizens remain subject to US estate tax regardless of residence, and non-citizens may still face estate tax on US-situs assets.
Domicile, asset location, and citizenship are more important than physical residence alone.
How to avoid inheritance tax?
Inheritance tax planning in the US typically involves using lifetime exemptions, structuring ownership of US assets carefully, and planning for domicile status.
Trusts, gifting strategies, and proper estate planning documents can help reduce exposure, especially for expats with international assets.
Who is exempt from inheritance tax?
All heirs are exempt from federal inheritance tax in the United States simply because there is none.
Instead, any federal estate tax is paid by the estate before assets are distributed.
US-citizen spouses benefit from an unlimited marital deduction, while other exemptions depend on the deceased’s citizenship, domicile, and estate value.
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