If you are a non-resident with assets in the U.S., the day you pass away your family faces an estate tax that starts almost from zero. It is the biggest and least-known wealth risk of investing in the U.S. — and it is planned before, not after.
Enter the market value of your assets in the U.S. Assets outside the U.S. are not part of this calculation.
The key is the concept of "U.S. situs": it doesn't matter where you live, it matters where the asset is deemed to be located.
| Asset | Subject to estate tax? |
|---|---|
| Real estate in the U.S. | Yes |
| Stocks and ETFs of U.S. companies | Yes — even if held at a broker in your country |
| Physical assets located in the U.S. | Yes |
| Deposits in U.S. banks (not connected to a U.S. business) | Generally no |
| Bonds that qualify as "portfolio interest" | Generally no |
| Life insurance on your own life | Generally no |
| Shares of NON-U.S. companies | No |
Careful here: income tax treaties (the ones that reduce withholding on dividends) are different from estate tax treaties. The U.S. has about 15 estate tax treaties — with countries like the United Kingdom, France, Germany, Italy or Japan. No Spanish-speaking country has one. Mexico or Venezuela having an income tax treaty changes nothing here.
A single-member "disregarded" LLC does not eliminate the exposure on its own: for these purposes it is usually looked through. The structures that are actually used for this (for example, a foreign corporation as a holding company) have their own costs, obligations and tax trade-offs — they are evaluated case by case and before buying.
The executor files Form 706-NA if U.S. assets exceed $60,000. In practice, until that is resolved the property cannot be cleanly transferred or sold: the family is left with a frozen asset.
It is one of the most common — and riskiest — "home remedies": it can trigger gift tax (which has even harsher rules for non-residents) and doesn't necessarily solve the estate problem. Not a decision to make without advice.
Before the deed is signed or the portfolio is built. After buying, the options shrink and restructuring can trigger taxes that didn't exist at the start.
If the number above gave you pause, that's the signal.
It's the kind of risk that is solved with structure, and structure is defined before buying. 15-min consultation: $29.