Many people with legal residence outside the United States own real estate and other assets in Arizona and spend part of the year here. Regardless of whether the Arizona connection is for residential or business reasons, all non-U.S. citizens need to be attentive to estate planning issues that arise from property ownership in the state.
At Peterson Law Offices, located in the East Valley, our clients include many Canadians and other non-U.S. citizens. We assist with estate planning, real estate, and business concerns relating to Arizona property and assets. Attorney Shane Peterson always coordinates with clients’ other professional advisors, including legal counsel in their home countries. We welcome non-U.S. citizens to contact us to discuss their concerns and interests.
The following summary addresses the four primary estate planning considerations that non-U.S. citizens should take into account when they own property in Arizona.
If you own real estate or other assets in Arizona, title to the property can be held in a number of different ways. The way you choose to title assets affects how Arizona law treats the property in the event of your death.
Ownership may be direct or indirect. Direct ownership involves titling property in the name of one or more individuals. However, even in the case of direct ownership, choices must be made about the nature of the ownership. Direct ownership options include fee simple sole ownership and joint ownership with or without a right of survivorship, as well as other types of ownership. Special types of deeds, such as a beneficiary deed, also may be utilized.
Indirect ownership also can take several different forms. Property can be placed in a revocable or irrevocable trust or owned by a business entity like a Limited Liability Company (LLC), Limited Liability Partnership (LLP), or corporation.
If you are a non-U.S. citizen and plan to purchase or already own property or assets in Arizona, talking with an attorney familiar with the state’s property and probate laws is an essential step to take. Attorney Shane Peterson’s practice includes real estate and business law, as well as estate planning and probate, which makes him especially well-positioned to assist clients with Arizona property ownership issues.
While it can be difficult to consider what would happen if you suddenly became incapacitated (temporarily or permanently), it is extremely important for non-U.S. citizens to address that possibility if they spend time in Arizona. Even if you have incapacity documents in place for your home country, they may not protect you if something happens while you are here.
Although your home country documents may technically be legal in Arizona, it is very possible that local medical and financial personnel won’t recognize or honor them immediately. If that happens, it can cause enormous difficulties for you and your family. Having documents in place that conform to Arizona law is the only way to fully protect yourself and your family in the event you become incapacitated while you are here.
A complete Arizona estate plan includes specific documents that designate trusted individuals to be responsible for your personal and health care and manage your financial matters in the event you become incapacitated. The documents include a durable financial power of attorney, durable health care (or medical) power of attorney, and a durable mental health care power of attorney.
It is essential for non-U.S. citizens to have these documents and to get assistance from an experienced Arizona estate planning attorney to create them. You should never use pre-printed forms or online services to create necessary legal documents.
If you own property in Arizona, even if your legal residence is outside the U.S., your property may be subject to the Arizona probate process following your death. Probate takes time and costs money. It can result in a considerable delay in your beneficiaries getting access to their property and reduce the amount of their inheritance.
Probate also is unnecessary in most cases, because it can be avoided with advance planning — but the planning must occur during the property owner’s lifetime. After someone dies, nothing can be done to avoid probate if the circumstances legally require it.
The State of Arizona does not impose taxes on estates or inheritances. However, a non-U.S. citizen’s estate may be liable for federal estate tax. Calculation of the tax liability for estates of non-citizens may involve both federal tax laws and intergovernmental treaties. For example, U.S. estate tax liability for Canadians involves consideration of both the federal Internal Revenue Code provisions and the Canada-U.S. Tax Treaty.
Estate tax implications are always taken into account when an experienced estate planning attorney creates a comprehensive estate plan or addresses estate planning issues for non-citizens. The awareness of the potential for estate tax liability in the United States is imperative for all non-citizens. It is another important reason to consult with a lawyer if you are a non-citizen who owns property in Arizona.
At Peterson Law Offices, we provide high-quality legal services at affordable prices. Our services include Arizona real estate, estate planning, probate, and business law. If you are a non-U.S. citizen, attorney Shane Peterson can answer all your questions about estate planning considerations relating to Arizona laws and property ownership in the state. As both a lawyer and licensed real estate agent, Shane is uniquely well-positioned to handle all types matters and transactions involving real estate and estate planning.
We welcome inquiries from clients throughout the East Valley, including Queen Creek, San Tan Valley, Gilbert, Mesa, and Chandler. Schedule your free initial consultation by calling 480-878-5998 or using our online contact form.
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