Global Estate Planning: Cross-Border Rules for $5M+ Estates

What Global Estate Planning Actually Involves at the $5M+ Level

Global estate planning is the structured process of titling, transferring, and protecting assets held across multiple countries while minimizing exposure to overlapping tax regimes, forced heirship rules, and probate systems that were never designed to cooperate with each other. For anyone with meaningful wealth in more than one jurisdiction, domestic planning alone leaves significant gaps.

The stakes are concrete. The US has estate and gift tax treaties with only 16 countries, including the UK, France, Germany, Australia, Japan, and Canada. If your assets sit in Singapore, Dubai, Hong Kong, or Brazil, you face full US estate tax exposure with no foreign tax credit offset for local death duties. That is not a theoretical risk. It is a structural problem that requires deliberate architecture, not a standard will.

The 2025 TCJA sunset makes this more urgent. The federal estate tax exemption sits at $13.61 million per individual ($27.22 million per married couple) in 2024. After December 31, 2025, it reverts to approximately $7 million per person (inflation-adjusted) unless Congress acts. For estates between $10M and $50M, this is the most consequential planning window in a generation.

How International Tax Treaties Affect US Citizens Living Abroad

The US taxes its citizens and resident aliens on worldwide income regardless of where they live, as confirmed in IRS Publication 54. That principle extends into estate planning: your domicile matters, but your citizenship follows you.

The US Model Tax Convention, maintained by the Treasury Department, provides the framework for bilateral treaties that can reduce withholding taxes on cross-border transfers. But treaty coverage is thin. Assets held in non-treaty jurisdictions receive no relief from double taxation unless you have structured ownership through an entity that changes the situs analysis.

For married couples with a non-US citizen spouse, the gap is even sharper. The IRS requires that assets passing to a non-citizen spouse flow through a Qualified Domestic Trust (QDOT) to qualify for any marital deduction. A QDOT imposes specific trustee requirements (at least one US trustee) and withholds estate tax on principal distributions. Couples who skip this structure lose the unlimited marital deduction entirely, which can trigger a seven-figure tax bill at the first death.

The OECD's 2021 analysis of inheritance taxation across 37 member countries found that only 24 levy any form of estate or inheritance tax, with top marginal rates ranging from 10% in Turkey to 55% in Japan. That disparity creates both arbitrage opportunities and serious exposure depending on where your assets sit and where your beneficiaries live. Cross-border tax planning strategies need to account for both sides of that equation.

Forced Heirship Rules: What They Override and How to Work Around Them

Forced heirship is the single most misunderstood risk in cross-border estate planning. Most US-based planners treat it as a footnote. For anyone holding real estate or business interests in civil law countries, it is a structural constraint that can override a carefully drafted will.

France's réserve héréditaire is the clearest example. French law guarantees children a minimum share of the estate: 50% with one child, 67% with two children, and 75% with three or more. This applies to French real estate regardless of the owner's nationality or domicile. If you own a Paris apartment or a Provence vineyard, French succession law governs that asset.

The American Bar Association identifies forced heirship regimes in France, Spain, Germany, and most civil law countries as among the most significant obstacles for US planners structuring cross-border transfers. The rules override testamentary freedom for a defined portion of the estate.

Practical workarounds exist. The most common for French real estate is holding the property through a Société Civile Immobilière (SCI), a French civil real estate company. Shares in an SCI are movable property, not real property, which changes the succession analysis. Brussels IV (EU Succession Regulation No. 650/2012) offers another route: EU residents can elect to have the succession law of their nationality govern their entire EU estate, giving Americans with European assets a mechanism to potentially sidestep local forced heirship rules.

British inheritance law considerations follow the common law tradition, which gives testators considerably more freedom, though UK domicile rules and the UK's 40% inheritance tax above the nil-rate band create separate planning requirements.

What Happens to Foreign Assets Without an International Estate Plan

The short answer: probate in every jurisdiction where you hold titled assets, simultaneously, under different legal systems, with no coordination between them.

A US citizen who dies holding a French apartment, a Singapore brokerage account, and a UK investment property will trigger three separate probate or administration processes. French notarial proceedings for the real estate. Singapore's administration process for the financial account. UK probate for the property. Each requires local counsel, local filings, and local timelines. The process can take years and cost a meaningful percentage of the asset value in legal fees.

Beyond probate, the tax exposure compounds. Without proper situs planning, the same asset can attract estate tax in the US (on worldwide assets for citizens) and a local inheritance or estate tax in the country where the asset sits. For assets in non-treaty jurisdictions, there is no mechanism to offset one against the other.

US recipients of gifts or bequests from covered expatriates face an additional layer. Under IRC Section 2801, if someone who renounced US citizenship with a net worth above $2 million (or above the average annual net tax liability threshold) leaves assets to a US person, the US recipient owes a 40% excise tax on the transfer. This catches families off guard when a parent or grandparent expatriated years earlier without coordinating the downstream tax consequences.

How to Avoid Double Taxation on Cross-Border Inheritance

Double taxation on inherited assets is not inevitable, but avoiding it requires deliberate structure, not reactive filing.

The primary tools are treaty elections, foreign tax credits, and entity-level planning. Where a treaty exists, the estate or its advisors must affirmatively elect treaty treatment and file the appropriate returns in both jurisdictions. Missing that election can forfeit the treaty benefit entirely.

For assets in non-treaty jurisdictions, the foreign tax credit under IRC Section 2014 provides partial relief by crediting foreign estate or inheritance taxes paid against the US estate tax. The credit is limited to the US tax attributable to the foreign asset, so it does not eliminate double taxation, but it reduces it.

Entity-level planning changes the situs analysis. A US LLC or a foreign holding company can convert foreign real property (which is taxed where it sits) into an ownership interest in an entity (which may be taxed based on the entity's jurisdiction of formation). This is not a guaranteed solution. The IRS and foreign tax authorities scrutinize these structures, and substance requirements have tightened. But for significant foreign real estate holdings, the analysis is worth running.

The Corporate Transparency Act, effective in 2024, adds a compliance layer. FinCEN now requires most US and foreign entities doing business in the US to report beneficial ownership information. International holding company structures used in cross-border estate planning must be reviewed for CTA compliance, as failure to report carries civil and criminal penalties.

Best Trust Structures for Holding Assets in Multiple Countries

The trust is the workhorse of US estate planning. Internationally, it is also the structure most likely to be misunderstood, misapplied, or simply not recognized.

Civil law countries do not have a native trust concept. France, Germany, Spain, Italy, and Japan have no direct equivalent. A revocable living trust drafted under California law has no legal standing in France for the French real estate it purports to hold. The Hague Convention on the Law Applicable to Trusts (1985) provides some recognition framework, but not all countries have ratified it, and ratification does not guarantee enforcement.

International trusts for asset protection that actually function across jurisdictions typically require one of three approaches:

Situs-specific structures. Hold each country's assets through a locally recognized vehicle. French real estate through an SCI. UK assets through a UK trust or company. Singapore assets through a Singapore private trust company.

Treaty-compliant trusts. For US persons with significant foreign assets, a properly structured irrevocable trust can remove assets from the taxable estate while maintaining some family benefit. The structure must comply with both US grantor trust rules and the laws of the jurisdiction where assets sit.

Offshore foundations. Liechtenstein, Panama, and the Netherlands Antilles recognize private foundations that function similarly to trusts in common law countries. These structures can hold assets across multiple jurisdictions and are recognized in more civil law countries than common law trusts.

Wealth succession planning across borders requires matching the structure to the asset location, not defaulting to the structure your US attorney knows best.

PFIC Rules and What They Mean for US Expats with Foreign Investment Holdings

This is the provision that surprises even sophisticated investors. Under IRC Sections 1291 through 1298, a Passive Foreign Investment Company is any foreign corporation where 75% or more of gross income is passive, or 50% or more of assets produce passive income. That definition captures most foreign mutual funds, ETFs, and many foreign holding companies.

US persons who inherit or hold PFIC shares face punitive tax treatment. Gains are taxed at the highest ordinary income rate (currently 37%), plus an interest charge on deferred gains calculated back to the year of acquisition. There is no preferential long-term capital gains rate. A foreign index fund that a non-US investor holds tax-efficiently becomes a tax trap for a US beneficiary who inherits it.

The IRS provides two elections to mitigate this. A Qualified Electing Fund (QEF) election requires the PFIC to provide annual information statements, which most foreign funds will not do. A mark-to-market election taxes annual appreciation as ordinary income, which eliminates the interest charge but accelerates recognition.

For international estate planning, the practical implication is this: before a US beneficiary inherits foreign investment accounts, the estate plan should identify any PFIC holdings and either liquidate them pre-death, make the appropriate elections, or restructure the account into non-PFIC vehicles. Leaving this to the executor after death is expensive and often irreversible.

How to Structure an International Holding Company for Estate Planning

For business owners and investors with assets across multiple jurisdictions, an international holding company (IHC) can centralize ownership, simplify succession, and create treaty access that direct ownership would not provide.

The structure typically involves a holding company incorporated in a jurisdiction with a broad tax treaty network, low or zero withholding taxes on dividends, and recognized corporate governance. The Netherlands, Luxembourg, Singapore, and Ireland are common choices. The holding company owns operating subsidiaries or investment assets in other countries.

From an estate planning perspective, the IHC converts a collection of country-specific assets into shares of a single entity. Succession planning then operates at the holding company level, which is typically governed by one legal system. This simplifies probate, reduces multi-jurisdictional administration, and can provide privacy benefits depending on the jurisdiction.

The risks are real. The IRS scrutinizes IHC structures for substance. A shell company with no employees, no office, and no genuine business activity will not withstand challenge. Transfer pricing rules apply to transactions between the IHC and its subsidiaries. And if the IHC holds foreign mutual funds or passive investment vehicles, PFIC rules apply to US shareholders.

High net worth wealth management approaches that incorporate IHC structures require ongoing compliance: annual CTA beneficial ownership filings with FinCEN, country-by-country reporting in some jurisdictions, and FATCA compliance for accounts held by the IHC. The administrative cost is real, but for estates above $20M with assets in four or more countries, the structure typically pays for itself in tax savings and simplified administration.

Currency Risk in Cross-Border Estates: Quantifying and Hedging It

Currency exposure in a multi-jurisdictional estate is not abstract. A 10% adverse move in the EUR/USD exchange rate on a €5M French property represents more than $500,000 in USD estate value. For a family whose estate tax calculation is denominated in dollars, that swing can push the estate into a higher bracket or erode the value of a bequest that was carefully sized to stay within exemption limits.

Currency hedging instruments available through major private banks include forward contracts (locking in an exchange rate for a future date), cross-currency swaps (exchanging cash flows in different currencies over a defined period), and FX options (the right but not the obligation to exchange at a specified rate). JPMorgan Private Bank, Goldman Sachs, and UBS all offer structured hedging programs for clients with significant foreign-denominated asset exposure.

The practical question for estate planning is not whether to hedge, but what you are hedging against. If the goal is to preserve the USD value of a foreign asset for estate tax purposes, a forward contract timed to the expected estate settlement period provides certainty. If the goal is to protect against a catastrophic currency move while preserving upside, an FX option structure is more appropriate.

One consideration that often gets missed: currency hedging instruments are themselves assets with tax treatment. Gains on forward contracts and swaps are generally treated as ordinary income under IRC Section 988. That treatment should factor into the overall cost-benefit analysis of the hedging program.

Philanthropy Structures for Cross-Border Giving

Direct charitable giving to foreign organizations generally does not qualify for a US income tax deduction. The IRS requires that donations go to organizations recognized under IRC Section 501(c)(3), which excludes most foreign charities. For the FATFIRE audience, this is not a minor inconvenience. It is a structural constraint that requires a specific workaround.

International donor-advised funds (DAFs) administered through organizations like Fidelity Charitable, Schwab Charitable, or the King Baudouin Foundation United States (KBFUS) solve this problem. A US taxpayer contributes to the DAF (taking a full US income tax deduction at contribution), and the DAF then makes grants to qualified foreign charities through its own vetting and equivalency determination process. The contribution is irrevocable, but the donor retains advisory privileges over grant recommendations.

For larger philanthropic programs, a US private foundation with cross-border grantmaking authority provides more control. The foundation can make grants to foreign organizations through an expenditure responsibility process, which requires the foundation to ensure the funds are used for charitable purposes. The administrative burden is higher than a DAF, but the foundation retains the ability to make multi-year commitments and build relationships with specific foreign organizations.

Private foundations in low-tax jurisdictions, such as Liechtenstein or the Netherlands, offer an alternative for families with significant non-US assets and non-US beneficiaries. These structures can receive assets from multiple jurisdictions, make grants globally, and provide succession continuity across generations without triggering US estate tax on the foundation's assets (assuming proper structuring and the grantor's US estate planning is coordinated).

Sophisticated tax minimization strategies at this wealth level treat philanthropy not as a separate activity but as an integrated component of the overall estate plan.

The 2025 TCJA Sunset: The Most Time-Sensitive Planning Trigger Right Now

The federal estate tax exemption halves after December 31, 2025. For anyone with a taxable estate above $7 million (the approximate post-sunset threshold), the window to act is measured in months, not years.

The strategies most relevant for international estates:

Large gifting before the sunset. The IRS has confirmed through proposed regulations that gifts made under the current higher exemption will not be "clawed back" if the exemption later decreases. Gifting assets now, including interests in foreign holding companies or international real estate, uses the current exemption permanently.

GRATs (Grantor Retained Annuity Trusts). A GRAT transfers appreciation above the IRS hurdle rate (the Section 7520 rate) to beneficiaries estate-tax-free. For assets expected to appreciate significantly, including private equity interests or pre-IPO holdings, a GRAT funded before the sunset captures that appreciation outside the taxable estate.

SLATs (Spousal Lifetime Access Trusts). A SLAT allows one spouse to gift assets into an irrevocable trust for the benefit of the other spouse and descendants, removing the assets from both estates while maintaining indirect access through the beneficiary spouse. For international families, the SLAT's assets can include foreign holdings, but the trust must be structured carefully to avoid grantor trust inclusion for foreign tax purposes.

Funding offshore structures before the sunset. For families with existing offshore trusts or foundations, contributing additional assets before December 31, 2025 uses the current exemption against those contributions. After the sunset, the same contribution would either exceed the exemption or require gift tax payment.

Comprehensive wealth management guidance for this planning window requires coordination between your US estate attorney, your international tax advisor, and any local counsel in jurisdictions where you hold significant assets.

Reporting Obligations That Can Derail an Otherwise Sound Plan

A global estate plan that is structurally sound can still produce significant penalties if the reporting obligations are not met. The IRS's international reporting regime is extensive and the penalties are not proportionate to the underlying tax.

US persons who receive gifts exceeding $100,000 from foreign individuals, or more than $17,339 (2023 threshold, inflation-adjusted) from foreign corporations or partnerships, must report these transfers on IRS Form 3520. Failure to file carries penalties of up to 35% of the gross amount of the transfer. This catches families off guard when a non-US parent or grandparent makes a large gift to a US beneficiary.

FATCA (Foreign Account Tax Compliance Act) requires foreign financial institutions to report accounts held by US persons to the IRS, and requires US persons with foreign financial assets above specified thresholds to file Form 8938. The thresholds are $50,000 for single filers living in the US, rising to $400,000 for married filers living abroad. These thresholds are low relative to the asset levels of most FATFIRE readers, meaning virtually everyone in this audience with foreign accounts has a filing obligation.

The FinCEN FBAR (Report of Foreign Bank and Financial Accounts) requires separate reporting for foreign accounts exceeding $10,000 in aggregate. The FBAR is filed with FinCEN, not the IRS, and carries its own penalty structure: up to $10,000 per non-willful violation and up to the greater of $100,000 or 50% of the account balance per willful violation.

Private wealth banking services at institutions with international compliance infrastructure can help track these obligations, but the legal responsibility sits with the taxpayer.

Building the Right Advisory Team for Global Estate Planning

No single advisor covers this territory. A US estate attorney who is excellent on domestic planning will not know French succession law. A French notaire will not know PFIC rules. The coordination failure between advisors is where expensive mistakes happen.

The minimum team for a multi-jurisdictional estate above $10M:

• A US international tax attorney with specific experience in cross-border estate and gift tax
• Local counsel in each jurisdiction where you hold significant titled assets
• A qualified international tax accountant familiar with FATCA, FBAR, Form 3520, and Form 8621 (PFIC reporting)
• A private banker at an institution with genuine cross-border capabilities (not just a domestic bank with an international brochure)

For estates above $30M with assets in four or more countries, a single-family office or a multi-family office with international estate planning infrastructure provides the coordination layer that prevents advisors from working in silos. The family office does not replace local counsel. It manages the process, maintains the asset inventory, and ensures that a tax law change in one jurisdiction triggers a review of the overall structure.

Swiss succession and estate planning is a useful case study in why local expertise matters. Switzerland has cantonal inheritance taxes that vary significantly by canton, a separate federal estate tax regime, and specific rules for non-residents holding Swiss assets. A US advisor who has not worked in this jurisdiction will miss the cantonal variation entirely.

The cost of this team is real. For a complex multi-jurisdictional estate, annual advisory fees can run $50,000 to $200,000 or more. That cost should be evaluated against the tax exposure it manages, which for estates in the $10M to $50M range typically runs into seven figures.

Estate and Inheritance Tax Rates by Key Jurisdiction (2024)

Understanding where your assets sit in the global tax matrix is the starting point for any structural analysis.

The OECD's 2021 inheritance taxation study found that among 37 member countries, only 24 levy any form of inheritance or estate tax. The disparity between a 55% top rate in Japan and zero in Singapore creates meaningful planning opportunities for families with flexibility in asset location. Countries with no inheritance tax are not automatically the right answer, but they belong in the analysis.

References

• Internal Revenue Service -- "IRC Section 2056A – Qualified Domestic Trusts (QDOTs)" (2009). - Internal Revenue Service -- "IRC Section 2801 – Tax on Covered Gifts and Bequests from Expatriates."
• Internal Revenue Service -- "Publication 54: Tax Guide for U.S. Citizens and Resident Aliens Abroad" (2024). - Internal Revenue Service -- "Form 3520 – Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts."
• Internal Revenue Service -- "IRC Sections 1291–1298 – Passive Foreign Investment Company (PFIC) Rules."
• **U.S.

Department of the Treasury** -- "United States Model Income Tax Convention" (2016). - Financial Crimes Enforcement Network (FinCEN) -- "Beneficial Ownership Information Reporting Rule (Corporate Transparency Act)" (2024). - American Bar Association -- "ABA Section of Real Property, Trust and Estate Law – International Estate Planning Resources."

• OECD -- "Inheritance Taxation in OECD Countries" (2021). - EU Succession Regulation (EU) No 650/2012 -- "Brussels IV – EU Succession Regulation" (2015).