British Expats - 3 ?s re UK citizen living in US

Quote:

Originally Posted by celticgrid (Post 9294107)

keeping this simple and high level....

Although the numbers are all wrong, the semi-truth probably arises from the fact that while there's an unlimited allowance for an estate left to a spouse, if the surviving spouse is not a US citizen then that unlimited allowance does not apply. So the fact that a surviving spouse is a non-citizen can have a dramatic effect on estate planning, depending on the value of the estate.

As you say, some states have estate tax and the exemption levels are usually much lower than the federal level. In our case our wills are carefully drawn up so that, should my USC wife die, the estate does not get hammered by the tax man. As and when I get citizenship her will can be revised. Estate planning and the implications are, in my view, a big plus factor for gaining citizenship.

I'm not sure what you are referring to that the numbers are wrong. From everything I've read, last years unlimited estate tax exclusion (the exclusion rose from $600,000 in 2003 to unlimited in 2010 and was to reset to $1 million in 2011) was negotiated to $5 million plus 35% after that during the last two weeks of December 2010. This along with the extension of the tax breaks for the rich allowed the president to keep the tax cuts for those making less than $250,000 per year as well as unemployment extensions for 13 months.

From what I have ever seen, spouses never had any exclusion above the fixed amount. There are always ways for the rich to not pay taxes with clever legal documents and transfers of property but I don't think a will can do it (even a living trust). If you can point at a document that states that for federal estates (state laws may vary) I'd like to read it.