It can be an exciting adventure living in another country, but it also creates complex situations to your legal and financial life. When it comes to creating or updating your will, managing your assets, and protecting your loved ones, living abroad complicates estate planning in ways many expats don’t anticipate.
Continue reading to explore major factors that make living overseas estate planning more challenging, and how to navigate them effectively.
How Living Abroad Complicates Estate Planning
You’ve gotten your affairs in order such as set up trusts, drafted a will, and designated beneficiaries for your retirement accounts. But if you own property or decide to live abroad, your U.S. estate planning might not suffice. Here’s what to know about living abroad and how it complicates estate planning.
1. Your Residency Status Determines Taxation
If you spend more than half of a year in another country, they will consider you a resident for text purposes. That’s especially relevant if you reside in a country that, like the U.S., considers all your worldwide assets part of your taxable estate. This also includes Switzerland, Japan, France, and Italy.
Moreover, there’s also the possibility of double taxation. In fact, the U.S. has estate or gift tax treaties with 15 countries. This includes the United Kingdom, Switzerland, Australia, South Africa, Netherlands, Japan, Italy, Ireland, Greece, Germany, France, Finland, Denmark, Canada, and Austria.
Such treaties help clarify which country has the primary right to tax your assets and may allow your estate or heirs to claim credits or exemptions that reduce the overall tax burden. But cross-border taxes are one of the biggest reasons living abroad complicates estate planning.
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2. U.S. Estate Docs Are Often Ineffective Overseas
In many cases, U.S. estate planning instruments are neither enforceable nor recognized abroad. For instance, trusts may be ignored altogether or limited. And powers of attorney more often than not, hold little legal effect outside the U.S. In fact, placing foreign assets in a U.S.-based trust can create complex tax and legal complications.
For these reasons, it’s best to create legal documents and wills that comply with the laws of each country where you own property or reside.
3. Your Designations May Be Overwritten by Foreign Law
Most European countries, and others like Japan and Brazil, have forced heirship rules that usually require that a fixed portion (often 50% or more) of your assets go to your children.
For example, if you and your spouse jointly own a home in Italy, your half of the home won’t automatically transfer to your spouse upon your death. Instead, your children will be entitled to their legally mandated share under forced heirship rules. This is true even if you’re a nonresident, since the law governing the inheritance of real property is typically determined by the location of the property itself.
With this in mind, there’s a workaround for U.S. citizens who own property or live in any European Union member state, excluding Ireland and Denmark. European Succession Regulation, citizens of many countries can elect to have the law of their nationality, rather than forced heirship rules, govern their estate. However, this choice must be made explicit in your will or similar legally recognized estate-planning document.
4. Foreign Assets Are Part of Your U.S. Estate
If you’re a permanent resident or a U.S. citizen, all of your worldwide assets are considered part of your taxable estate. For example, your vehicles, real estate, precious metals, and even your collectibles.
Of course, U.S. taxes apply only if your total estate exceeds the lifetime estate and gift tax exclusion of $13.99 million per individual in 2025, rising to $15 million in 2026.
Conclusion
Without experienced advisors on the ground, even well-intentioned plans originating in the U.S. can be delayed. Or outright rejected because of their incompatibility with local legal frameworks. Working with estate attorneys who understand how living abroad complicates estate planning can help you structure your plans in ways that are more likely to be recognized and carried out as intended.
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