Moving Abroad? Estate Planning Considerations for U.S. Citizens in 2026

Global mobility has never been easier. Remote work, cross‑border careers and a desire for adventure are prompting more Americans to relocate overseas. Whether you plan to retire on a Mediterranean island or take a temporary assignment in Asia, your estate plan will travel with you. U.S. tax law and the legal systems of your new country may not interact as you expect, and failing to prepare could erode the wealth you hope to leave your family. This article explores key estate‑planning considerations for Americans moving abroad as of January 2026.

U.S. Estate Tax Still Applies Wherever You Live

The first surprise for many prospective expatriates is that leaving the United States does not eliminate U.S. estate tax. Unlike many countries that tax only assets located within their borders, the United States imposes estate and gift tax on citizens and long‑term residents based on their worldwide assets. A U.S. citizen who becomes a permanent resident of another country remains subject to U.S. estate tax unless they renounce citizenship. For 2026 the federal estate tax exemption increased to $15 million per individual (meaning a married couple may shelter up to $30 million), but state estate taxes can apply at much lower thresholds. Asset values above the exemption are taxed at 40 percent, so a lack of planning can result in a sizable tax bill even if you reside abroad.

Double Taxation and Estate Tax Treaties

Moving abroad raises the possibility of double taxation. Many countries levy their own estate or inheritance taxes on property owned by residents, regardless of nationality. Without coordination, your estate could face both U.S. estate tax and a foreign inheritance tax. The United States has estate tax treaties with 15 countries, including Canada, France, Germany, Japan and the United Kingdom. These treaties often provide credits or exemptions to prevent double taxation and define which country has primary taxing authority for certain assets. However, many popular expatriate destinations, such as Italy, Portugal and much of Latin America, lack a treaty. In those cases, careful planning—like shifting ownership of real estate to a non‑U.S. spouse or local corporation—may mitigate or eliminate foreign inheritance tax, but professional advice is essential.

Understanding Domicile and Residency

Estate taxes in both the U.S. and foreign jurisdictions hinge on domicile—a concept distinct from residency. Domicile refers to the place you consider your permanent home and intend to return to. You can become tax resident in another country for income tax purposes without changing your U.S. domicile, and the U.S. will still claim estate tax jurisdiction. Conversely, establishing domicile abroad by relocating assets, spending time overseas, obtaining local citizenship and expressing intent can remove your estate from U.S. taxation, but may expose you to exit taxes and other U.S. expatriation rules. For long‑term assignments, maintaining U.S. domicile may be preferable; for permanent relocation, carefully shifting domicile and filing the necessary paperwork can reduce future U.S. estate tax exposure.

Forced Heirship and Succession Laws Overseas

Many civil‑law countries do not allow absolute freedom of disposition. “Forced heirship” rules require a portion of your estate to pass to certain heirs, typically children and spouses, regardless of your will. France, Spain and Italy, for example, reserve fixed shares of an estate for children and place limits on disinheritance. In the European Union, expatriates can often avoid forced heirship by electing the law of their nationality under the EU Succession Regulation, but Denmark and Ireland do not allow this election. If you own property in a country with forced heirship and cannot opt out, you must coordinate your U.S. trust or will to reflect those restrictions. Otherwise your U.S. plan could be overridden and your intended beneficiaries may receive less than expected.

Wills, Trusts and Local Formalities

U.S. estate planning documents may not be recognized abroad. Each country has formal requirements for wills, powers of attorney and health‑care directives. A will drafted under U.S. law may be invalid in a foreign court if it lacks the correct number of witnesses, notarization or language. For that reason many expatriates create “situs” wills—one for U.S. assets and one for assets located in each foreign jurisdiction. In some countries an International Will Convention provides a template recognized across borders, but adoption is limited. In addition, many civil‑law countries do not recognize U.S. revocable or irrevocable trusts. Assets transferred into a U.S. trust may be treated as if you still own them directly, which can lead to unexpected taxes or penalties. To provide for a non‑citizen spouse, a Qualified Domestic Trust (QDOT) is often used to defer estate taxes; however, local law may require the trust to be administered by a domestic trustee or bond. Always consult local counsel to determine whether your trust structure will be honored and how to integrate it with foreign law.

Non‑Citizen Spouses and Marital Deduction Limits

If your spouse is not a U.S. citizen, transferring wealth becomes more complex. U.S. law allows an unlimited estate tax marital deduction only for U.S. citizens. Non‑citizen spouses can receive only a limited annual gift amount (in 2026, $194,000, subject to cost‑of‑living adjustments) without triggering gift tax. Larger transfers must be channeled through a QDOT to preserve the marital deduction. If you move abroad and your spouse is domiciled in a foreign country, local inheritance laws and taxes must also be considered. Coordinating QDOT provisions with foreign marital property laws and forced heirship rules requires careful drafting and professional guidance.

Reporting Obligations and Hidden Pitfalls

Living abroad does not relieve you of U.S. reporting requirements. U.S. citizens and green‑card holders must file annual reports of foreign bank and investment accounts using the Report of Foreign Bank and Financial Accounts (FBAR) and IRS Form 8938 under the Foreign Account Tax Compliance Act (FATCA). Penalties for failing to report are severe. Foreign trusts that you establish or benefit from may trigger additional reporting under IRC §§ 6048 and 679, and foreign corporations or partnerships may require separate filings. Moreover, foreign community property regimes may treat assets acquired during marriage as jointly owned, which can create ambiguity when determining ownership and tax exposure. A comprehensive inventory of all foreign assets, including real property, bank accounts, retirement plans and business interests, is vital to avoid inadvertent noncompliance.

Planning Strategies Before You Move

Effective international estate planning begins before you leave the United States. Consider the following measures:

• Review your existing estate plan. Verify that your will, trusts, powers of attorney and health‑care directives are up to date. Identify which documents may need to be redrafted to meet local formalities abroad. Plan to execute new documents once you arrive.

• Inventory your assets. List all U.S. and foreign assets and determine where they are located. Understand how local law classifies property, particularly community property vs. separate property.

• Consult cross‑border professionals. Work with U.S. estate planning attorneys, international tax advisors and local counsel in the country you plan to move to. They can advise on estate tax treaties, local inheritance rules, trust recognition and compliance obligations.

• Use dual or multiple wills when appropriate. Separate wills for each jurisdiction can ensure that local courts accept your directives. Be careful to coordinate the wills so that one does not unintentionally revoke another.

• Consider gifting before departure. If you have assets you plan to transfer to heirs, gifting them while still resident in the U.S. may avoid future foreign inheritance tax and forced heirship constraints. However, gifts must align with your long‑term financial security and tax plan.

• Plan for liquidity and state taxes. U.S. state estate taxes can still apply to property located in a state even if you live abroad. Evaluate whether to retain property in high‑tax states or shift holdings to tax‑friendly jurisdictions.

Conclusion

Relocating abroad can enrich your life but complicates your estate plan. As of 2026 U.S. citizens and green‑card holders continue to face estate tax on worldwide assets, and the interplay of domicile rules, forced heirship laws, trust recognition issues and reporting obligations adds layers of complexity. The good news is that proactive planning—coordinating wills and trusts across jurisdictions, leveraging tax treaties, using QDOTs for non‑citizen spouses and complying with reporting requirements—can protect your wealth and ensure your wishes are honored. If you are considering a move overseas, schedule time with experienced cross‑border advisors long before you pack your bags. By integrating your estate plan with your international lifestyle, you can enjoy your new home without sacrificing financial security for yourself or your loved ones.