| Estate Tax Issue By
Debbie McGoldrick
“COULD you explain, other than the right to vote, the benefits of
U.S. citizenship? My husband and I have been married for 17 years. He’s
had a green card for almost 15, but does not want to become an American
citizen. It’s really because he’s lazy and feels everything
is fine as it is. Is it true that there are issues with regard to wills
and estates if you are a green card holder, such as having to pay more tax?
This might get him to move on his citizenship application.”
YOU’RE correct on the latter point, and as money talks in so many
cases perhaps it will prompt your husband to finally file for naturalization.
(Speaking of money, the filing fee for citizenship is going to skyrocket
from $330 to $595 later this year, another great reason to start the process
sooner rather than later.)
With regard to estate taxes and citizenship questions, it’s imperative
that these issues are discussed with an estate planner, as the laws are
quite complex. Basically, the concern for non-citizens is that they are
not permitted to take advantage of what’s known as the ‘unlimited
marital deduction,” which means that if you pass away first, the
assets you leave your husband could be subject to tax.
There are ways to blunt the impact of this tax. First, the non-citizen
can choose to become a U.S. citizen before the tax becomes due. The option
also exists to establish a qualified domestic trust in which payments
can be made to the surviving spouse. Again, these are complex issues that
are dependent on help from a qualified estate planner.
Of course, voting is a huge advantage afforded only to U.S. citizens.
With the 2008 elections looming, your husband should consider becoming
a citizen, especially if he is politically active.
Your husband’s green card, as he is undoubtedly aware, comes up
for renewal every 10 years. This means appointments with U.S. Citizenship
and Immigration Service (USCIS) for fingerprints, and a paperwork filing
fee which currently stands at $260. If he’d like to eliminate having
to do this, he should consider citizenship.
Though he may never wish to live somewhere other than the U.S., having
an American passport gives him the option to do so. Those with green cards
must establish and maintain a primary residence in the U.S. Citizens,
however, can live anywhere in the world, for as long as they like, and
return at any time.
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