Cross-Border Estate Planning for U.S.-India Dual Citizens

 

A four-panel comic titled “Cross-Border Estate Planning for U.S.-India Dual Citizens.” Panel 1: A man asks how to plan for citizens of both countries. Panel 2: A woman responds that U.S. estate tax and Indian succession laws must be addressed. Panel 3: Another team member adds that dual wills and trust structures can prevent conflict. Panel 4: The group agrees that a coordinated plan is crucial.

Cross-Border Estate Planning for U.S.-India Dual Citizens

U.S.-India dual citizens face unique challenges when it comes to estate planning, especially as their assets, family members, and tax obligations span two legal jurisdictions.

Proper cross-border planning is critical to minimize tax exposure, avoid probate delays, and ensure compliance with both U.S. and Indian inheritance laws.

This guide covers strategies to help dual citizens manage their global estates with clarity and compliance.

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Legal Frameworks in the U.S. and India

In the United States, federal estate and gift taxes apply to global assets owned by U.S. citizens, including those residing abroad.

India does not currently have an estate tax, but succession is governed by religious personal laws (Hindu, Muslim, Christian), and property transfer often requires documentation like succession certificates or letters of administration.

Unlike the U.S., India does not offer living trusts, and wills are the primary estate planning tool.

Key Tax Considerations

✔ The U.S. imposes an estate tax of up to 40% on estates exceeding the exemption threshold (currently $13.61 million in 2024).

✔ There is no estate tax treaty between the U.S. and India, which means double taxation is possible unless structured properly.

✔ Income from Indian property or shares inherited by a U.S. citizen may trigger foreign tax credits or require FATCA disclosures.

✔ U.S. citizens must report foreign accounts and financial assets over certain thresholds using FBAR and Form 8938.

Inheritance and Probate Rules

India follows intestate succession laws based on religion when there is no will.

A U.S. will may not automatically apply to assets in India unless it is formally probated or replicated as an Indian will.

Indian courts may require authentication of U.S. documents and Indian legal representation for heirs.

Land and real estate often involve title issues and must be verified through local authorities or legal heirs.

Planning Tools for Cross-Border Estates

1. Use dual wills—one for U.S. assets, one compliant with Indian succession laws.

2. Title Indian real estate in the name of the intended heir(s) while living, where appropriate.

3. Consider Qualified Domestic Trusts (QDOTs) for non-citizen spouses receiving U.S. assets.

4. Create a digital inventory of global accounts, PAN/Aadhaar, U.S. tax IDs, and legal documents.

5. Work with legal counsel in both jurisdictions to avoid conflicting instruments or delays in administration.

Further Resources on Cross-Border Planning

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Keywords: U.S.-India estate planning, dual citizen inheritance law, cross-border trust, Indian succession law, estate tax treaty