Key Takeaways
- The US taxes wealth transferred at death — up to 40% of the taxable estate
- US citizens: estate tax on worldwide assets with a $13.99 million exemption (2025)
- Non-US citizens: estate tax on US situs assets only, with just a $60,000 exemption
- A $1 million US portfolio can attract up to $376,000 in estate tax for NRAs
How Estate Tax Works
When a person passes away, the fair market value of their assets is aggregated. After deductions, the remaining taxable estate may face federal estate tax — up to 40%. Some states also impose their own estate taxes with lower exemption amounts.
The NRA Trap
For non-US citizens and non-domiciliaries (such as Indian residents), estate tax applies to US situs assets — including US real estate, shares of US corporations, and tangible property located in the US. The exemption is only $60,000. A US asset portfolio worth $1 million could trigger an estate tax bill of up to $376,000.
Planning Solutions Exist
While estate tax may seem daunting, there are proven US estate tax blockers and planning tools — entity structuring, trust solutions, and treaty-based planning — that can help reduce exposure.