![]() To take it one step further, someone can create a California trust, move to another state, yet still have their trust be under California law. ![]() Thus, when it comes time to wrap up the trust estate, we follow all the laws in California, even if we have a death certificate from Hawaii, for example. There should be a provision in the trust that specifies the controlling law is that of California, for example, so that it does not matter where the trustor died, their trust will always be governed by California law. Trusts will, or really should, specify what state’s laws are those governing the trust. If the decedent had a California trust, then the matter becomes significantly easier. However, if the property is located in California and that was the decedent’s place of residence, then that should be sufficient to make sure California’s laws regarding small estates will control. Arguably, the person having passed away in another state means that state may then have jurisdiction over the estate. The bank in question will likely have their own version of this Affidavit and a notary on staff. ![]() To collect money from a bank account valued under the probate threshold, you would provide the bank with a death certificate and a Small Estate Affidavit, signed and notarized. This was in context of collecting assets via small estate affidavit and what documentation is needed, but the answer is going to be similar to what if the decedent had a trust in California. Lastly, we have the question of what to do if a loved one who lived and had assets in California, died outside of California. A handful of US states impose an estate tax, and some impose an inheritance tax. Otherwise, the recipient may have some type of inheritance tax in their own country or state, but that will depend on their country’s laws. The only other United States tax to worry about is the estate tax, which is a tax imposed on the decedent’s estate itself only if its value reaches above a certain threshold in value, which is $12.92 million federally starting 2023. This would allow for the trust to handle the taxes and paperwork, and the beneficiaries would then only have to worry about receiving the funds and reporting the inheritance on their taxes if their state or country has an inheritance tax. The trust then pays the taxes rather than the individual beneficiary, keeping in mind that the tax rate for the trust may be higher than that of the individual. If taxes will be owed due to the type of assets ( like an annuity or an IRA for example), then it may be easier to have a trust be the beneficiary. Firstly, we need to consider the type of assets held in the trust or with beneficiaries specifically designated on them. Jumping into what the tax implications are for non-US resident beneficiaries, there, of course, is no hard and fast rule here. What are the Tax Implications for Non-Resident Beneficiaries of a Living Trust? By that, we are mostly referring to taxes, so let’s jump into that next. At this point, the restrictions, or considerations to keep in mind would be whatever the inheritance laws are for where that beneficiary resides, be it another state here in the US or another country entirely. However, what about them actually owning, or inheriting, real property? The great news is there are no citizenship requirements to own land here in the US. Non-US residents can be beneficiaries in general. Going further, we’ve seen beneficiaries located in France, the UK, Ireland and more. In fact, we have conducted many trust administrations with beneficiaries located in Mexico and Canada. Even if your intended beneficiary is in a different state or country, they can still be a beneficiary of your estate or even under a transfer on death deed. Are these people eligible to inherit property? The answer is, yes. First is a common question of what can be done about intended beneficiaries living abroad and not being citizens of, or even permanent residents of the US.
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