Estate planning for cross-border familiesCross-Border Estate Planning

Wang Law Firm, LLC · David Wang, Managing Attorney · Attorney-reviewed · Updated October 2026

The property of Chinese families in the United States is often spread across two or more countries: a home and a business in the United States, and real estate, savings or a future inheritance from parents in China. Family members' statuses also differ — some are U.S. citizens, some hold green cards, some hold work visas, and some have always lived in China. Together, these factors make estate planning for cross-border families much more complex than for families in a single country: the same property may be governed by the laws of two countries at once, a U.S. will or trust may not be directly recognized in China, and the tax consequences vary greatly depending on status.

This page summarizes, from the perspective of U.S. law, several key issues cross-border families should keep in mind. For how wills and trusts themselves are drafted, see A guide to wills and Living trusts. Tax rules are complex and change frequently; what follows covers principles only, specific figures are subject to the IRS's current published guidance, and individual cases should be evaluated with an accountant or tax advisor.

U.S. estate tax: status determines everything

Income tax residence and estate tax domicile are two different tests

For income tax, a non-U.S. citizen's tax residence is generally determined by the "green card test" or the "substantial presence test": a green card holder is usually a U.S. income tax resident and must report and pay U.S. tax on worldwide income.

For estate and gift tax, whether a non-citizen is treated as a "resident" depends on whether they are domiciled in the United States, that is, whether they live in the United States with the intention of remaining indefinitely. The determination considers facts such as where the person lives, the type of green card or visa, where their family and business are, and their social ties. Holding a green card is usually an important factor in finding a U.S. domicile, but it is not the only deciding factor. As a result, a person may be a U.S. resident for income tax but not for estate tax, or vice versa; the domicile of temporary visa holders in particular requires case-by-case analysis.

Main differences among three groups

The federal tax law signed into law in July 2025 (commonly called the One Big Beautiful Bill Act) set the basic exclusion amount at $15 million for 2026, adjusted for inflation thereafter. The $60,000 filing threshold for nonresident aliens comes from the statute, and the IRS states that it is not adjusted for inflation. Please rely on the IRS's current published figures for all amounts.

Nonresident aliens: what counts as "U.S. property"

For foreign nationals not domiciled in the United States, property generally treated as located in the United States includes real estate in the United States, tangible personal property located in the United States, and stock of U.S. corporations (regardless of where the stock certificates are kept). Property generally not treated as U.S. property includes U.S. bank deposits not effectively connected with a U.S. trade or business, and life insurance proceeds on the life of the foreign national. Other assets, such as partnership interests, are more complicated to classify.

A typical risk scenario: parents living in China buy a home in the United States for their children in the parents' own names, or hold stock in U.S.-listed companies. When the parents die, even if the property is to go to children who are already U.S. citizens, a U.S. estate tax return and tax may be required, and there is no U.S.–China tax treaty to provide relief. In addition, lifetime gifts by a nonresident alien of real estate or tangible personal property located in the United States may also be subject to U.S. gift tax. Planning before acquiring U.S. assets is much easier than fixing things afterward.

Non-citizen spouses: the unlimited marital deduction and the QDOT

When a U.S. citizen or resident dies, property left to a spouse who is a U.S. citizen generally qualifies for the unlimited marital deduction, so no federal estate tax arises at the first spouse's death. However, under section 2056(d) of the Internal Revenue Code, if the surviving spouse is not a U.S. citizen (even if the spouse holds a green card), the deduction generally does not apply unless the property passes to a qualified domestic trust (QDOT).

Main features of a QDOT (section 2056A):

• The trust must be governed by the law of a U.S. state or the District of Columbia and must have a U.S. trustee;
• The executor must make a timely QDOT election;
• Income the surviving spouse receives from the QDOT is generally not subject to estate tax, but distributions of principal (other than hardship distributions as defined in the regulations), and the principal remaining in the trust at the surviving spouse's death, are generally subject to the deferred estate tax;
• Property may also first pass directly to the spouse, who then transfers it to a QDOT within the prescribed period;
• If the surviving spouse becomes a U.S. citizen before the estate tax return is filed (and meets the residency requirement), the marital deduction can apply without a QDOT.

For lifetime gifts, gifts to a non-citizen spouse likewise do not qualify for the unlimited marital deduction, but there is a special annual exclusion higher than the ordinary annual exclusion; the amount is adjusted annually for inflation, as published by the IRS.

This rule is directly tied to immigration status: whether and when a spouse naturalizes affects how the estate plan is designed. Families considering naturalization can refer to Form N-400, Application for Naturalization and discuss the timing with a lawyer.

Receiving large gifts or bequests from abroad: Form 3520

When a U.S. tax resident (including green card holders and people who meet the substantial presence test) receives a gift or bequest from a foreign person, generally no U.S. income tax is due on it, but reporting may be required:

• If gifts or bequests received from nonresident alien individuals or foreign estates total more than $100,000 in a tax year (gifts from related persons must be aggregated), they must be reported on Form 3520, identifying each gift of more than $5,000;
• For "gifts" received from foreign corporations or foreign partnerships, the threshold is much lower and is adjusted annually, as published by the IRS; the IRS may also recharacterize such amounts as income;
• Failure to file on time can result in a penalty of 5% of the unreported amount per month, up to 25%, unless there is reasonable cause.

Common situations include parents in China wiring money to children in the United States to buy a home, or children inheriting their parents' property in China and transferring it to the United States. The money itself is usually not subject to income tax, but penalties for failing to report can be severe. In addition, U.S. tax residents who hold foreign bank accounts and financial assets may have other reporting obligations, such as the FBAR and Form 8938. Please confirm with your accountant.

Green card holders: where tax residence and immigration status intersect

• Reporting worldwide income: green card holders are generally U.S. income tax residents and must report worldwide income, including rent, interest and investment income from China;
• The risk of filing as a nonresident: if a green card holder claims to be a nonresident on a U.S. tax return, immigration authorities may treat this as evidence of abandoning permanent resident status, and it may affect a later naturalization application;
• Long absences from the United States: green card holders who live in China for long periods face the issue of maintaining their green card status (see Naturalization guide), and this also affects the determination of domicile for estate tax;
• Giving up a green card: long-term green card holders who give up their status may be subject to the U.S. expatriation tax rules, which should be evaluated in advance with a tax advisor.

Don't forget state estate tax

In addition to federal estate tax, Illinois has its own state estate tax. The Illinois exemption is currently $4 million, is not adjusted for inflation, and unused exemption cannot be transferred between spouses; bills to change it have been proposed in recent years, so please rely on the current guidance published by the Illinois Attorney General's office. People who live in other states (including foreign nationals) who own real estate in Illinois may also owe Illinois estate tax on that property. New York and Massachusetts each have their own state estate tax as well, with thresholds and calculation methods that differ from Illinois.

Assets in China: notarization, authentication and apostilles

Inheritance and transfer of real estate, bank deposits, equity interests and other assets in China must follow Chinese law and the procedures of the relevant authorities, and often require an inheritance notarization in China or resolution through litigation. Whether a U.S. will can be recognized and enforced in China, and what documents are needed, are questions on which our firm does not advise, as they involve Chinese law; please consult a lawyer licensed in China.

For using documents across borders, there has been an important change: China deposited its instrument of accession on March 8, 2023, and the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (the Apostille Convention) entered into force for China on November 7, 2023. The United States is also a party to the Convention. This means:

• Public documents issued in the United States for use in China (for example, a notarized power of attorney, a copy of a will, or a death certificate) generally no longer need authentication by a Chinese embassy or consulate in the United States; instead, an apostille is issued by the Secretary of State's office of the state where the issuing authority is located (or, for federal documents, by the U.S. Department of State);
• Public documents issued in China for use in the United States (for example, a notarial certificate) generally receive an apostille from China's Ministry of Foreign Affairs or an authorized local foreign affairs office;
• An apostille certifies only the authenticity of the signature and seal, not the content of the document; the receiving institution may also require a translation, a specific format or other materials, so check with the recipient before proceeding.

Chinese-language documents used in the United States (for example, submitted to a court, bank or title company) usually also require an English translation, and English documents used in China often require a Chinese translation. The specific translation and certification requirements are set by the receiving institution.

Coordinating wills in multiple countries

Families with property in several countries commonly make separate wills based on where the property is located (situs wills), with each will dealing only with the property in one country. When coordinating them, keep in mind:

• Revocation clause: the standard clause in a new will "revoking all prior wills" must be limited to revoking only wills that deal with property in the same country; otherwise it may mistakenly revoke the will for another country;
• Consistent beneficiaries and shares: the overall plan across the wills should be consistent, avoiding duplication or gaps;
• Executors: in each country, name an executor or agent who can conveniently handle local procedures;
• Formal requirements: each will must meet the requirements of the law where it applies; a U.S. will should be signed and witnessed according to the requirements of Illinois (or New York or Massachusetts);
• Tax coordination: the same property may raise tax issues in both countries, and planning requires tax professionals from both countries to work together;
• Effect of trusts abroad: a U.S. trust may not be recognized in China or other civil law countries; do not assume a U.S. trust can directly hold or deal with property in China.

How we work with tax advisors and local counsel

Cross-border estate planning usually requires a team: a U.S. lawyer handles wills, trusts and powers of attorney under U.S. state law and how U.S. property is held; an accountant or tax advisor handles U.S. federal and state estate, gift and income tax and foreign asset reporting; and a lawyer licensed in China (or another country) handles the inheritance, transfer and notarization of local property. Our firm can lead on the U.S. legal side, helping you organize family members' statuses, the inventory of assets in each country and the issues to be resolved, and communicating with your tax advisor and local counsel.

How we can help

• Review family members' citizenship, immigration status and likely domicile, and how assets are distributed across countries;
• Draft U.S. wills, living trusts and powers of attorney, and coordinate their wording with your wills in China or other countries;
• Where a spouse is not a U.S. citizen, consider arrangements such as a QDOT together with your tax advisor;
• For nonresident alien families acquiring assets in the United States, explain the consequences of different forms of ownership under U.S. state law;
• Handle notarization and apostille procedures for U.S. documents to be used in China, and coordinate with lawyers licensed in China.

Frequently asked questions

Official sources

• IRS: Estate tax
• IRS: Estate tax for nonresidents not citizens of the United States (Form 706-NA)
• IRS: Estate and gift tax treaties (international)
• IRS: Large gifts or bequests from foreign persons (Form 3520)
• IRS: Regulations on the marital deduction for non-citizen spouses and QDOTs (T.D. 8612)
• Hague Conference on Private International Law: the Apostille Convention enters into force for China

Related reading

• A guide to wills in Illinois
• Living trusts
• Prenuptial agreements
• Divorce and property division (including cross-border assets)
• Naturalization guide

This page is general information, not legal advice. Family and estate matters are governed by state law, the rules differ from state to state, and outcomes depend on the specific facts. Our firm advises on Illinois, New York and Massachusetts law; matters involving other countries require coordination with local counsel.