Is there a US tax on my wife's inheritance from her French aunt?

January 29, 2007

From:  Martin
Date:  Wed, 29 Nov 2006

My wife has been notified that her aunt left an estate in France to her, including money and property. Is there any way around the 55% inheritance tax? My wife is a U.S. citizen.

Answer

Date:  Fri, 29 Dec 2006

Hello Martin,

The federal estate tax is imposed on the estate or trust of the decedent, not the beneficiary. Since your wife's aunt was presumably a citizen and resident of France and assuming she had no U.S. property, her estate shouldn't be subject to U.S. estate tax. The people who are administering her estate should resolve the tax liabilities relating to the transfer before distributing your wife's inheritance.

If you haven't already taken care of it, you and your wife should review your own estate plans. She will have separate property to plan for.

Good luck!
Mike Gray

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