If you're a Mexican citizen purchasing real estate in the United States, it's vital that you take steps to ensure that you're protecting your heirs from an unnecessary tax burden. International real estate lawyers Antonio Gastélum and María Elia Gastélum have the expertise necessary to create a plan that is personalized to fit your family's unique circumstances.
3 Strategies an International Real Estate Investment Lawyer May Recommend to Protect Real Estate From Estate Taxes
1. Use a Trust
The estate tax exemption refers to the amount of money you can transfer to your heirs without incurring estate taxes. By placing your assets in a trust, you can use your estate tax exemption to transfer more assets tax-free.
Placing assets in a trust can also help "freeze" their value for estate tax purposes. This is particularly useful for real estate purchases that are likely to appreciate in value over time.
2. Use an LLC
An LLC owned by a trust offers additional estate planning benefits beyond using a trust alone. If you are planning to invest in multiple properties, we may recommend a series LLC owned by a trust with a single operating agreement for various subsidiary LLCs as a means of diversifying the liability associated with each project.
If you're concerned with how to maintain control over your assets, an LLC owned by a trust is an excellent choice. By placing your assets in an LLC owned by a trust, you can maintain control over the assets during your lifetime while still ensuring that they are managed according to your wishes after your death.
3. Increase Your Life Insurance Coverage
Life insurance is an often-overlooked part of the estate planning process, but it can be used to pay estate taxes on real estate or other assets so heirs aren't forced to sell assets that you intended to pass down to future generations. Estate taxes need to be paid within nine months of the date of death, which can be problematic if heirs must wait for probate to access the needed funds.
Life insurance can be used to provide the necessary liquidity to meet estate tax obligations. If you are worried that your heirs might use the funds inappropriately, the insurance policy can be owned by a living trust and designated for this specific purpose.