Estate Planning For Foreign Property

It’s increasingly common for U.S. residents to own property abroad—whether it’s a vacation home, an inherited family residence, or housing tied to international work. While these properties typically don’t raise immediate tax concerns—due to the high federal estate tax exemption and state laws like New York’s exclusion of out-of-state real estate—the real challenge arises when settling the estate and ensuring the foreign property passes to the intended heirs. Without careful planning, foreign property can become entangled in legal delays, conflicting inheritance laws, and cross-border complications.

The most effective approach is to create two separate wills: one covering U.S.-based assets (excluding the foreign property), and another prepared under the laws of the country where the foreign property is located. Each will should clearly define the assets it governs and state that it does not revoke or interfere with the other. This helps prevent confusion and ensures that each will is legally valid in its respective jurisdiction—especially in countries with strict requirements for language, execution, or notarization.

Some countries also impose inheritance laws that guarantee certain family members a share of the estate, or require beneficiaries—rather than the estate itself—to pay inheritance taxes. With guidance from legal professionals in both countries, these challenges can be addressed in advance. Ultimately, if you own property outside the U.S., having two well-coordinated wills is a smart and effective way to ensure your wishes are honored and your loved ones are spared unnecessary complications.