The suggestion, by Badger and Nononymous, for this new thread came from a comment by Elizabeth, which I’ve excerpted here and can be found in its entirety at this link followed by several comments in reply.
Please share your information and experience regarding estate matters for former US citizens both in reply to Elizabeth’s question and/or in a broader sense, and ask your own questions about these matters on this thread.
Elizabeth wrote: . . . My father, who was born in the USA and moved to Canada in [the 1980s], passed away recently. A little background… after moving here he was under the impression that he didn’t need to file taxes in the US if he properly filed in Canada . . . He relinquished his US citizenship in [the 1990s] by taking the citizenship oath in Canada, along with the rest of our family. He never lived as an American after that, never renewed his US passport, never lived there. He did collect Social Security from the years he did work there, but that was it. His accountants want me to file US taxes for his estate, but I don’t think I need to as he was not a US citizen anymore.
“Fatca must be playing a part now in this new trap.”
I’m not even sure it’s much of a trap, at least not yet. But greater general awareness will likely mean more executors going “uh-oh, wait a minute…” with predictably expensive results.
“Need to find someone other than my children to notify SSA and pay back any overpaid benefit.”
I thought the SSA and the IRS were pretty separate so I don’t quite understand why it would matter who notified SSA. Now I’m beginning to wonder what the ramifications will be when my husband applies for SS. Sometimes I wish he wouldn’t apply at all but it means managing on about $lK a month if he doesn’t. We can do it now but inflation is a merciless tax master.
Embee – it wouldn’t matter – I definitely don’t think there would be any ramifications. I just don’t want them to have to deal with US officialdom on my account.
I’ll figure something out. Maybe I’ll see if I can arrange for the damned bank to have to do it. Take everything else out of the account shortly before D-day, and send them a letter. “Dear Bastard Bank, if you’re looking at this letter I am dead. Send the money back to America and tell them I have kicked the bucket.” 🙂
I don’t think the SSA cares who notifies them as long as they are notified. Nothing to do with the IRS. As for refunding an over payment, regardless of whether the the benefit is direct-deposited into a bank account or sent by monthly cheque, they send a notice of the overpayment to the beneficiary’s address requesting that the amount be repaid to SSA. (The same address that they use for the annual statement of benefits paid or any other communication.) Don’t imagine they care who sends the cheque as long as it doesn’t bounce.
When a parent died a few years back (in the US) it was the funeral home that notified SSA and the request from SSA for repayment appeared like clockwork in the mail a week or two later. Benefits cease the month before the death occurs so unless the death is on the 1st or 2nd of the month that month’s benefits (less a $255 death benefit) wind up having to be repaid.
The SSA are witholding agents for the IRS, you will only deal with the SSA for all payments (over or under) or for any tax related matters concerning them. No IRS in the equation.
maz57 – “I don’t think the SSA cares who notifies them as long as they are notified. Nothing to do with the IRS. ”
It’s not about what the SSA cares about, it’s about what I care about.
“As for refunding an over payment, regardless of whether the the benefit is direct-deposited into a bank account or sent by monthly cheque, they send a notice of the overpayment to the beneficiary’s address requesting that the amount be repaid to SSA. (The same address that they use for the annual statement of benefits paid or any other communication.)”
Good point – thanks for mentioning it. I’ll change that address once I’ve found out how best to handle this. It’s beginning to look like I’ll need a lawyer after all, just to notify the SSA.
“Don’t imagine they care who sends the cheque as long as it doesn’t bounce.”
It’s not about what America cares about. It’s about what I care about.
Would this work: suspend benefit in good time before Grim Reaper imminent.
Nothing to repay, no need for any notification of death.
Or say nothing and let the money continue for a few decades. Consider it an anti-CBT clawback.
Not a very gratifying clawback, given that I’ll be dead. 🙂
I think stopping it will be the best solution. Timing is all, of course.
I don’t know, I might find it quite satisfying to know that I was going to continue draining the US treasury well into the afterlife. I could die with a smile on my face.
Well, you could leave some instructions to pay by postal money order (in local currency and language perhaps, just to complicate things). Or maybe just stiff ’em. Knowing the US government, they’d probably spend $50,000 to try to collect a measly 1200 bucks.
Personally, I’ve found the SSA to be a fairly user friendly organization, likely because their job is to hand out money, not to collect it.
My plan, once I’ve figured out the time and place of my death, is to never, ever, go there!
I’ll just tell them I’m moving to a country where SS can’t be paid.
Which when you think about it will be the truth. 🙂
maz57 – “My plan, once I’ve figured out the time and place of my death, is to never, ever, go there!”
Who can make sense out of all this gobbledygook as it might be applied to the non-US sited estates of those deemed by the US to be taxable persons and their USP beneficiaries living outside the US?
Who can afford to comply? Who could figure it out themselves in order to comply without help? The fees to pay for legal and accounting help with complying could eat up all or a major portion of a modest estate held in Canada or elsewhere outside the US by the decedent or beneficiares if deemed UStaxablepersons.
The rest of the series above is here;
Usual caveat, putting this here in case it helps people, but it is NOT an endorsement or an attempt to advertise anyone’s professional services.
‘Foreign Individuals: No Help From US Estate Tax Reform (Part I)’
Virginia La Torre Jeker J.D. May 16, 2018
This has probably been mentioned before, but as a follow-up to the post linked by badger, there are some countries with Estate and Gift Tax treaties with the US. For them the exemption could be greater than $60,000. A list is available at https://www.irs.gov/businesses/small-businesses-self-employed/estate-gift-tax-treaties-international
Thanks @Karen for that invaluable note.
I am currently searching for information on non-USCs as heirs to a US estate.
Some background info: I am an only child (no siblings); relinquished US citizenship; not a covered expatriate; married to a NRA; have one teenage child who is a dual citizen (born outside US, birth registered with US). Our country of citizenship and (tax) residence is Austria.
My parents are planning their estate. I don’t know what to tell them. Can I inherit their estate without incurring huge taxes? What are the US tax implications for non-USCs when inheriting a US estate? Austria has a gift & estate tax treaty with the US, but I don’t know what this means for me.
Perhaps there is someone on Brock who has been in this situation before? I would appreciate any input about what to look out for and what IRS reporting needs to be done in such a situation.
Thanks for your help!
There should be no problem for you as a non citizen to inherit from a US estate.
Estate taxes would be charged on the US estate on anything over 5.34 million..
See chart here for various senarios
The only problem that could arise is if a US citizen inherits an estate from a ‘covered’ expatriate.
As yet there is no mechanism to document or collect on this.
Heidi, thanks for your response and the link.
More specifically, I was wondering about what forms need to be filed in order to move the value of an estate out of the US without triggering taxes. Is there an IRS Publication I should be familiar with? There are probably different forms for every type of asset, right? That’s why I was hoping to have an exchange with a former citizen who’s been through this before.
Interestingly, I followed the link to the estate/gift tax treaties provided in the thread above by Karen. Austria is listed on the IRS site as having a treaty with the US concerning both, however, I cannot find the actually treaty text anywhere to read the specific details. Any suggestions?
Petlover. Normally a US estate would undergo probate. The executor would pay federal and state income, capital gains and estate taxes due. This is an area where lawyers and accountants make lots of moolah. There is currently a $5.6 million exemption for estate taxes. (11.2 MM for a couple!)
Once the state and federal tax people are happy, the executor is free to distribute the rest per the will .
Much appreciated, Portland.
I won’t be named executor, only the beneficiary. I guess I’m simply jittery about red tape in the event of an inheritance because I’d get the whole kit and caboodle. There are no other siblings to share the burden with, so to speak.