Mexican Citizens and other nonresidents with Assets in the US are Subject to US estate taxes

Mexican Citizens and other nonresidents with certain assets located in the United States will cause their estates to have to file US Estate Tax returns on the value of their assets (with some exceptions) located in the USA. The tax is based on the Fair Market Value of their Assets and can be up to 35%. Nonresidents only get an exemption from this tax equal to the first $60,000 value of their US estate. The balance  of the estate's assets are subject to the estate tax.  Real estate which was owned by a deceased nonresident is subject to this tax.  The estate can only deduct the mortgage balance due from the fair market value if the estate agrees to report to the IRS the value an details of the decedents worldwide assets including those in Mexico.

Due to the large chunk this estate tax can take out of a nonresident's estate, it is best to do some advance planning to attempt to reduce it.  Email us if you want help. Read more about the nonresident  estate tax here

US Estate Planning if you Live and Work In Mexico

You cannot ignore estate planning if you wish your US and and Mexican assets passing to the heirs you desire. You  need to take the necessary steps to keep the costs and taxes at a minimum.  If you are a US expat living in Mexico, that means you have to put the necessary documents in place in Mexico  and in the USA.  The laws of both countries governing testate succession must be coordinated.

The US imposes its estate and gift taxes on your no matter where you live in the world and no matter where your assets are located in the world.  Mexico currently has no estate taxes but they are talking about changing that.

The US side of the process involves Wills, Trusts, Powers of Attorneys and Health Care Directives.  These documents will direct the disposition of your Assets located in the USA.  It may also involve a program of gifting in order to keep your US taxes down.  In Mexico you may need a Mexican Will and must take steps to make certain your Fideicomiso passes your Mexican real estate to the proper heirs. You will need a Mexican attorney or accountant to help you with these documents.

  If you do it right, you can save tens of thousands of dollars in probate fees,and often a lot more in estate taxes.  We have been doing estate planning for over 30 years.  Read more and download your estate planning questionnaire here.  After you fill it out, send it to us and we can help you implement a plan that achieves your personal wishes.

Even Mexicans who are not US Citizens or residents, need to do US estate planning if they have real estate, corporations, or other assets located in the US.  Proper advance planning also saves a lot of costs your heirs will have to incur if it is not done in advance.