Immigrants enter the United States for various reasons and often balance hard work and perseverance to secure financial stability. They might start by working long hours, gradually saving enough to invest in education or a small business. With each paycheck, they carefully plan for the future, not only aiming to build a secure life for themselves but also to ensure their loved ones benefit from their efforts.
As they accumulate assets, they become increasingly aware of the importance of financial planning and the impact of taxes when transferring assets to loved ones. This becomes more relevant when planning for the future and putting together an estate plan. There are strategies immigrants can use to help make the most of their savings.
#1: Understand tax implications
The first step is to get a better understanding of tax obligations. For non-citizens, the IRS imposes a tax threshold of $60,000 on US assets before estate taxes apply. In contrast, US citizens enjoy a much higher threshold of $13.9 million in 2025. This disparity can pose significant challenges, particularly for those who own property or other high-value assets. Owning a home or other valuable assets can quickly exceed the non-citizen threshold, leading to potential tax liabilities. It is important to take these limits into account and plan accordingly.
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Several strategies can help non-citizens protect their assets, though each comes with its own set of considerations and potential limitations.
- Seek full citizenship: Obtaining US citizenship can eliminate the lower tax threshold, providing greater flexibility in managing and passing on assets.
- Transfer assets to a trusted citizen: Gifting assets to a family member who is a US citizen can be an option, but it requires careful planning. The annual gift tax exclusion is $19,000, and any amount above this requires a gift tax return.
- Utilize spousal transfers: If married to a US citizen, transferring assets to your spouse can bypass the gift tax limit, as there is no cap on spousal transfers.
Each of these strategies requires careful consideration and planning. It is beneficial to consult with an attorney with experience in both immigration and estate planning to better ensure compliance with applicable laws and regulations.
