Many people who live overseas and are non-citizens and non-domiciliaries purchase real estate in New York, enter into partnership agreements with New York businesses, and own stock in U.S. corporations. These individuals must take special care with their estate planning in order to avoid issues when they pass away.

 

First, they must execute a Last Will and Testament that addresses only their New York assets and does not revoke any other Will that they may make in their home country. The Will must address the payment of any federal and state estate taxes due and owing.

 

Second, while the United States may have signed a treaty with a foreign country to avoid double taxation, any such treaty will only affect federal estate taxes and not New York State estate taxes due and owing.

 

Third, non-citizens and non-domiciliaries are only exempt from $60,000 in estate taxes on both the federal and New York State level. They do not receive a lifetime gift tax exemption.

 

Fourth, the unlimited marital deduction, which allows tax-free asset transfers between spouses, is generally not available if the receiving spouse is not a U.S. citizen. The spouse of a deceased non-citizen and non-domiciliary will be subject to federal and state estate taxes on real property located in New York as well as estate taxes on certain New York businesses, and stock in U.S. corporations. The sale of any real property in New York left to a non-citizen will require the payment of any federal and state estate taxes due before the property can be listed for sale. This is why it is important to have a financial plan to pay for estate taxes before the sale of a real property.

 

When a U.S. citizen is married to a green-card holder, certain estate and gift tax rules also apply.
 

First, unlike couples where both spouses are U.S. citizens, a U.S. citizen cannot leave an unlimited amount of assets to a green card holding surviving spouse without that spouse incurring estate tax. As of 2025, this estate tax exemption for a surviving green card holder spouse is $190,000. Everything above this number is subject to both federal and New York State estate taxes.

 

Second, green card holders are subject to federal estate tax on their worldwide assets. If they also have assets in their country of origin, those assets could be subject to estate tax in both countries, potentially leading to double taxation.

 

Third, complications arise when a U.S. citizen married to a green-card holder buys real estate jointly or holds other assets jointly. If the U.S. citizen spouse dies first, the entire value of a jointly-owned asset may be included in the decedent’s taxable estate unless the green card spouse can demonstrate contributions to the asset's purchase. The surviving green card holder spouse will be left with federal and New York State estate taxes due and owing with only a $190,000 estate tax exemption.
The sale of any real property in New York left to a non-citizen will require the payment of any federal and state estate taxes due before the property can be listed for sale. This is why it is important to have a financial plan to pay for estate taxes before the sale of a real property.

 

It is essential to work with an estate planning attorney who understands the complexities of planning for a non-citizen. Likewise, working with an attorney experienced in handling the probate or administration of the estate of a non-citizen with assets in New York will save you time and effort.

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