Published on
01 Mar 2023
4 min read

The Importance of Will Writing for Indians Who Are U.S. Citizens with Global Assets

Mar 17, 2023

As an Indian citizen residing in the United States, you may have accumulated a variety of assets and investments over the years. These may include property, bank accounts, stocks, mutual funds, and other financial instruments. It's important to understand that the laws governing inheritance and estate planning can vary widely between India and the United States, and the rules governing global assets can be especially complex. In this context, writing a Will can be one of the most important steps you can take to ensure that your assets are distributed according to your wishes.

Here are some of the key reasons why Will writing is so important for Indians who are U.S. citizens with global assets:

To avoid intestacy laws: If you die without a Will, your assets will be distributed according to the intestacy laws of the state where you reside. These laws may not align with your wishes or cultural beliefs, and they may not take into account the existence of assets outside the United States. By writing a Will, you can ensure that your assets are distributed according to your specific wishes and that your loved ones are taken care of in the way that you intended.

To appoint guardians for minor children: If you have children under the age of 18, it's essential to name a guardian for them in the event of your untimely death. Without a Will, a court will appoint a guardian for your children based on their interpretation of your wishes and the best interests of the child. By naming a guardian in your Will, you can ensure that your children are placed in the care of someone you trust and who shares your values and beliefs.

To provide for charitable giving: If you have the desire to support charitable causes, you can use your Will to make a gift to a charity or non-profit organization. This can be a meaningful way to leave a legacy and support causes that are important to you, while also potentially reducing your estate tax liability.

To avoid family disputes: One of the most important benefits of writing a Will is that it can help to prevent disputes among family members and other beneficiaries. By clearly stating your wishes and intentions, you can reduce the risk of misunderstandings and disagreements and ensure that your assets are distributed in a way that is fair and equitable.

To minimize estate taxes: Estate taxes can be a significant burden on your heirs and beneficiaries, especially if you have a large estate or assets in multiple countries. By working with an estate planning attorney to draft a Will, you can take advantage of tax planning strategies to minimize the impact of estate taxes and ensure that your assets are distributed in the most tax-efficient manner possible.

If you have assets outside India, you also need to consider the tax laws of the country where the assets are located. For example, if you have real estate or other assets in the United States, you need to consider the U.S. estate tax laws. Under these laws, U.S. citizens and residents are subject to estate tax on the value of their worldwide assets at the time of their death. The estate tax rate can be as high as 40%, and the exemption threshold changes frequently.

The estate tax laws in the United States can be particularly complex for non-citizens who own U.S. assets. If you are not a U.S. citizen or resident, your estate may still be subject to U.S. estate tax if your U.S. assets exceed a certain threshold. 

To avoid or minimize the impact of estate taxes in both India and the United States, it's important to work with an experienced estate planning attorney who can help you develop a comprehensive estate plan that takes into account the tax laws of both countries. 

Some strategies that may be helpful include:

Establishing a trust: A trust is a legal arrangement in which you transfer assets to a trustee to be held for the benefit of your beneficiaries. Depending on the type of trust you establish, you may be able to reduce your estate tax liability in both India and the United States.

Making charitable gifts: Charitable gifts can be a tax-efficient way to reduce your estate tax liability while supporting causes that are important to you.

Gifting assets during your lifetime: Gifting assets to your beneficiaries during your lifetime can reduce the value of your estate and therefore reduce your estate tax liability.