International & Mixed-Status Families: A Plain-English Guide for Californians
If your family spans borders—by passports, property, or relatives—your estate plan has to work in more than one context. With a few smart choices, you can keep things simple, save taxes, and spare your family red tape on both sides of a border.
Start with three facts that shape everything
First, “where you live for taxes” and “where you’re legally based” aren’t always the same thing. For estate and gift taxes, the key idea is domicile—the place you live and intend to stay. Second, the marital deduction that lets assets pass to a surviving spouse tax-free works automatically only if the survivor is a U.S. citizen. If not, you may need a special trust the IRS recognizes so your spouse can receive assets without an immediate estate tax bill. Third, California’s community property rules apply because you live here, not because of citizenship. Get the character of your property right and you can earn a valuable full step-up in tax basis when one spouse dies.
If one spouse isn’t a U.S. citizen
When the citizen spouse dies first, the surviving non-citizen spouse doesn’t automatically get that tax-free transfer. The fix is straightforward: build in language for a qualified marital trust—think of it as a safety valve the IRS requires. It must have a U.S. trustee and follow certain rules, but it keeps options open and buys time. Many couples also reduce the need for this trust by spreading ownership more evenly during life, using a higher annual gift limit that applies to gifts to a non-citizen spouse, and, when relevant, coordinating timing if citizenship is already in progress.
Community property without the headaches
Handled well, California community property can be a gift to future you: a full basis step-up at the first death that can lower capital gains taxes for the survivor. The trap is messy commingling—especially with accounts or real estate tied to another country. Solve it with a short marital property agreement, clean titling, and simple records. These are small steps that prevent big arguments later.
Owning assets in more than one country
Here’s the rule of thumb: the country where an asset sits often wants a say when it transfers. A condo in Spain or Mexico may require a local probate unless you plan around it. The practical solution is usually a California living trust for your U.S. assets and a short, country-specific will or trust for the property abroad, coordinated so they don’t conflict. Bank and investment accounts outside the U.S. also play by local rules. Some countries limit who can inherit and in what shares. We align your beneficiary forms and your trust with those rules so your plan isn’t quietly undone by a default you didn’t know existed.
Keep your trust “domestic” on purpose
Most families want a California-based trust that files U.S. returns and avoids extra reporting. That hinges on two simple choices: keep the trust under U.S. court supervision and put decision-making in the hands of U.S. people. Giving a foreign trustee real power can flip the trust into “foreign” status with added complexity. We pick the right trustee lineup and write powers carefully so you keep the straightforward version.
Don’t forget the living documents
Cross-border families need sturdy incapacity planning as much as a will or trust. California Advance Health Care Directives and Durable Powers of Attorney should name people who can actually act across time zones. Many foreign banks won’t honor a U.S. power of attorney without local formalities, so proper planning is required where needed.
How to move forward—simply
Make a one-page list of what you own, where it’s located, and whose name it’s in. Confirm each spouse’s citizenship, immigration status, and where you’re legally “based.” Decide whether you want to keep the trust squarely domestic and pick fiduciaries who make that true. If a non-citizen spouse could inherit, include the IRS-approved marital trust as a backup. Coordinate with a local lawyer for any property outside the U.S., and make sure your account titles and beneficiary forms match the plan. Finally, set a short annual check-in with your attorney and CPA. Cross-border families change fast; your plan should keep up.
Bottom line: you don’t need a complicated plan—you need a coordinated one. With a few focused decisions, your California estate plan can work cleanly across borders, protect your spouse, cut friction and taxes, and give your family clarity when it matters most.