Non-U.S. citizens in the United States face some estate planning challenges when it comes to taxes. If you’re a U.S. resident, but not a citizen, the IRS treats you similarly to a U.S. citizen, with a few exceptions. But if you’re a nonresident alien, the tax treatment of your estate will be significantly different.

Understanding residency

IRS regulations define a U.S. resident for federal estate tax purposes as someone who had his or her domicile in the United States at the time of death. One acquires a domicile in a place by living there, even briefly, with a present intention of making that place a permanent home.

Whether you have your domicile in the United States depends on an analysis of several factors, including the relative time you spend in the United States and abroad, the locations and relative values of your residences and business interests, visa status, community ties, and the location of family members.

If you’re considered a resident, you’re subject to federal gift and estate taxes on your worldwide assets, but you also enjoy the benefits of the $11.18 million lifetime gift and estate tax exemption and the $15,000 gift tax annual exclusion. And you can double the annual exclusion to $30,000 through gift-splitting with your spouse, so long as your spouse is a U.S. citizen or resident. However, the unlimited marital deduction isn’t available for gifts or bequests to noncitizens, though it is available for transfers from a noncitizen spouse to a citizen spouse.

Estate tax law for nonresident aliens

If you’re a nonresident alien — that is, if you’re neither a U.S. citizen nor a U.S. resident — there’s good news and bad news in regard to estate tax law. The good news is that you’re subject to U.S. gift and estate taxes only on property that’s “situated