Estate Planning and U.S. Tax Laws for Green Card Holders
Can Green Card Holders Have a Living Trust?
At AmeriEstate Legal Plan, we’ve worked with thousands of families, U.S. citizens, permanent residents, and non-resident aliens, to create estate plans that protect loved ones and preserve wealth. For green card holders (permanent residents), estate planning is not only possible, it’s essential.
Owning property, working, and raising a family in the United States comes with responsibilities, and without the right estate plan, green card holders may face unique challenges, especially when it comes to tax laws, inheritance rules, and assets in other countries.
In this guide, we’ll cover everything you need to know about estate planning for green card holders, including:
- Why green card holders need an estate plan
- Special considerations for international assets
- Living trusts and strategies to minimize taxes and avoid probate
- How AmeriEstate can help you protect your legacy
Can Green Card Holders Create an Estate Plan?
Yes, absolutely. Green card holders enjoy many of the same estate planning options as U.S. citizens, including the ability to:
- Create wills and trusts
- Appoint guardians for minor children
- Use powers of attorney and healthcare directives
- Take advantage of the U.S. estate tax exemption
The main difference lies in how U.S. tax laws apply to non-citizen spouses, gifts, and cross-border assets. Understanding these rules and planning accordingly is important to avoiding unnecessary taxes and legal complications.
Estate Planning and Taxes for Green Card Holders
Worldwide Tax Obligations
As a permanent resident, you are taxed on your worldwide income. This means income from U.S. wages, foreign investments, rental properties, and bank accounts must be reported to the IRS. Proper estate planning ensures that these assets are structured to minimize tax exposure.
The Federal Estate Tax Exemption
For 2025, both U.S. citizens and green card holders domiciled in the U.S. qualify for a federal estate tax exemption of $13.99 million per individual. Assets above this amount are subject to estate tax rates ranging from 18% to 40%. Without planning, this can significantly reduce what your heirs receive.
The Gift Tax Limitation
U.S. citizens can give unlimited gifts to a citizen spouse without tax consequences. However, when one spouse is a green card holder, the annual tax-free gift exclusion is $185,000 (2025 limit). Gifts above this amount may be subject to gift tax, relevant for couples purchasing property together.
The Marital Deduction Gap
When one spouse is not a U.S. citizen, the marital deduction does not apply. This means that upon death, assets transferred to a non-citizen spouse may be subject to estate taxes. A Qualified Domestic Trust (QDOT) can be used to defer taxes and provide for a surviving spouse.
The Exit Tax
Some green card holders consider giving up residency to avoid estate and income taxes. However, if you’ve been a green card holder for 8 of the last 15 years, you may face a significant exit tax when relinquishing your green card. An estate plan helps you prepare without resorting to drastic measures.
Assets in Multiple Countries
Many green card holders retain foreign property or investments. This can complicate estate planning because:
- Your assets may be subject to double taxation.
- You may need estate plans in multiple countries.
- Each jurisdiction has unique inheritance and probate rules.
Fortunately, the U.S. has estate tax treaties with 16 countries (including Canada, the U.K., Germany, France, Italy, and Japan) to help reduce double taxation. Still, it’s vital to work with an experienced estate planning attorney who understands both U.S. and international law.
Avoiding Probate: Why Trusts Are Essential
One of the biggest estate planning challenges in the U.S. is probate, the court-supervised process of distributing assets. Probate is:
- Time-consuming (can take months or years)
- Expensive (court fees and attorney costs reduce the estate’s value)
- Public (your estate details become public record)
For green card holders, the best way to avoid probate is through a revocable living trust. By placing your U.S. property in a trust, you:
- Ensure assets transfer directly to beneficiaries
- Maintain control during your lifetime
- Provide instructions for minor children and family members
- Reduce legal complications across states and countries
Key Documents Every Green Card Holder Should Have
- Revocable Living Trust
Protects your assets, avoids probate, and ensures your wishes are honored. - Pour-Over Will
Works alongside your trust to capture any assets not formally transferred. - Durable Power of Attorney
Allows someone you trust to manage financial matters if you become incapacitated. - Advance Healthcare Directive & HIPAA Release
Ensures medical decisions align with your wishes and grants access to health records. - Qualified Domestic Trust (QDOT)
Critical for non-citizen spouses to defer estate taxes.
Common Mistakes to Avoid
- Relying only on a will (still subject to probate)
- Failing to account for gift tax rules between citizen and non-citizen spouses
- Not planning for international assets
- Overlooking the exit tax for long-term residents leaving the U.S.
- Failing to update your plan after marriage, divorce, or acquiring new assets
Frequently Asked Questions
Do green card holders get the same estate tax exemption as U.S. citizens?
Yes, as long as you are domiciled in the U.S., you qualify for the $13.99 million estate tax exemption.
Can a green card holder inherit property in the U.S.?
Yes. Green card holders can own and inherit property just like U.S. citizens, though taxes may apply.
Do green card holders need a will or a trust?
Both are important, but a trust offers greater protection, avoids probate, and provides privacy.
What if I have property outside the U.S.?
You may need multiple estate plans, one in the U.S. and others where your assets are located.
Why Work With AmeriEstate Legal Plan
At AmeriEstate, we’ve been helping families since 1998 with customized estate plans. We understand the unique challenges green card holders face and offer solutions that protect both U.S. and international assets. With more than 400 five-star reviews and thousands of families
As a green card holder, your ability to live and work in the U.S. comes with opportunities and responsibilities. Creating an estate plan ensures your loved ones are protected, your property is distributed according to your wishes, and taxes are minimized.
Contact AmeriEstate Legal Plan today to schedule a free consultation.
Suggested Blogs:
A Tragedy That Could Have Been Prevented: The Cost of No Living Trust
5 Powerful Benefits of a Revocable Living Trust
Free Living Trust Seminars at Your Finger Tips and on Your Timeframe
External Links
IRS – Estate and Gift Taxes
U.S. Citizenship and Immigration Services – Green Card Information
