The real estate plan is essential to maximize the gift you leave for the benefit. However, if you are not an American citizen or resident, you need to be aware of the differences in the law of planning your real estate. The difference is not desirable. Also, marriage deductions are not permitted for citizens whose beneficiaries are spouses of nonresidents or real estate of resident in the United States. Fortunately, establishing qualified domestic trusts (QDOTs) can be a viable option to increase tax credits.
When QDOT is established, real estate is treated as a surviving spouse and tax deduction is reduced. In order to qualify, the trust must name at least one US citizen or domestic corporation as a trustee. In addition, the trust must be structured to have appropriate provisions for tax collection by the US Treasury Department. If the property over QDOT exceeds 2 million dollars, one of the trustees must be a domestic corporation and it is necessary to take out 65% of the fair market value of the real estate in order to guarantee tax payment Yes. If the real estate is less than $ 2 million, the law states that less than 35% of the real estate can be held in the form of non-US real estate
This regulation is particularly flexible with regard to the ability to establish non-dependent QDOTs, such as surviving spouses, representatives of surviving spouses, or real estate executives. Still, it is best to handle this kind of problem as soon as possible.
Establishing a QDOT also has some drawbacks, which we also need to stress. Since the nominated trustee acts as a withholding agent, if they are not held or mistakenly held, there is the possibility of personally liable for taxes. Furthermore, if real estate is entrusted to a trustee of a corporation, there may be administrative burden. For example, in the absence of liquid assets (assets that can not be easily withdrawn as cash as real estate) in real estate, there may not be enough cash flow to pay the trust fee (in order to manage real estate It is necessary to pay to the committee), or pay the bond fee in case of bringing out. In this case it is necessary to sell the asset to cover the cost, which may be difficult or undesirable. Due to the many strengths and weaknesses associated with QDOT it is best to have experienced experts evaluate your estate and determine if QDOT is the most economical way to set up your estate.
Regardless of whether you use QDOT or plan your property in other ways, you not only specialize in real estate planning, but also with attorneys who are familiar with the nuances of work with non-residents It is essential to look at your options You can maximize the value of real estate left to the loved one.
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