What are U.S. Estate Taxes and how do they affect non-U.S. residents?
U.S. estate taxes are levied on the transfer of a deceased person’s estate to their heirs or beneficiaries. These taxes apply to the value of the estate, which includes assets like cash, real estate, stocks, and personal property.
If you are a non-U.S. person (non-resident alien) and own U.S. assets such as stocks domiciled in the U.S., your estate may be subject to U.S. estate taxes upon your death. For non-resident aliens, the estate tax exemption is limited to $60,000, with any amount above this being subject to estate taxes, which can range from 18% to 40% depending on the value of the U.S. assets.
How does Sarwa help shelter you from U.S. Estate Taxes?
At Sarwa, we have provisions to protect non-residents from U.S. estate tax exposure. One strategy is to hold U.S. stocks through foreign entities like a corporation or trust. In this case, the foreign entity becomes the legal owner of the stocks, shielding your estate from U.S. estate taxes upon your death.
Our Sarwa Invest, Sarwa Save, and Sarwa Save+ portfolios utilize an omnibus structure through our broker to purchase these assets, with you designated as the beneficial owner on our ledgers. This structure shelters your estate from U.S. estate taxes. Therefore, you will NOT be liable for U.S. estate taxes with these accounts. However, please note that Sarwa Trade and Sarwa Crypto do not use this structure, meaning you may be subject to U.S. estate taxes in the event of death.
Nominate a Wealth Beneficiary! For Sarwa Invest, Sarwa Save, and Sarwa Save+ accounts, you have the option to nominate a Wealth Beneficiary. This is someone you designate to inherit your assets in the event of your death. Click here to learn more about setting up a Wealth Beneficiary.