US citizens and residents pass assets at death with one of the largest exemptions in the world: $15 million per person for 2026, under the law enacted in 2025. A family that is not resident in the United States can face a very different rule. For a non-resident who is not a US citizen, the exemption for US assets is generally $60,000. Above it, rates rise quickly to 40%.
That gap catches families who think of themselves as having no US connection beyond a brokerage account in New York.
What counts as a US asset
For a non-resident alien, the US taxes only US-situs property at death. The definition is narrower than many expect in some places and broader in others.
- Usually US-situs: US real estate, tangible property located in the US, and shares of US corporations, including US-domiciled mutual funds and ETFs, wherever the brokerage account is held.
- Usually not: US bank deposits not connected with a US business, many US debt obligations that qualify for the portfolio-interest exemption, and shares of funds domiciled outside the US.
A portfolio of US stocks and ETFs held by a family member abroad is the classic exposure. So is a vacation home held in an individual’s name.
Treaties can change the answer
The United States has estate tax treaties with a limited number of countries. Where one applies, it can raise the exemption or change which assets count. Where none applies, the $60,000 figure governs. The first step is knowing which regime applies to each family member, and the answer can differ within one family.
How advisors usually address it
There is no single fix, and every option has trade-offs. Common approaches include:
- Holding US securities through a properly structured non-US company, so the family owns foreign shares rather than US ones. This needs care: if heirs are US persons, the same company can create US income tax problems for them.
- Using funds domiciled outside the US for US market exposure instead of US-domiciled ETFs.
- Covering the exposure with life insurance held outside the estate.
- Reviewing how real estate will be titled before a purchase, not after.
The structure that protects the parents can burden the children. Cross-border plans have to be read from both ends.
The question to ask every year
Families move, children study in the US, and portfolios drift toward US assets. A plan that worked five years ago may not work today. Once a year, list each family member’s residence and citizenship, the US-situs assets in their name and the treaty position. That one page will tell you whether the plan still fits.
Cross-border planning turns on each family’s facts and the law of every country involved, so the details belong with qualified counsel in each.
This article is general information, not tax, legal or investment advice.