For families with ties to both the United States and the United Kingdom, estate planning is more than just drafting a will. It’s about navigating two complex legal systems, managing different tax regimes, and ensuring that your legacy is protected on both sides of the Atlantic.
Whether you’re a dual citizen, own property in both countries, or have family members spread across the US and UK, cross-border estate planning requires a coordinated approach. Here are some key considerations to help you safeguard your family’s wealth, reduce tax exposure, and avoid legal complications.
Understanding US and UK estate tax systems
One of the most important and often confusing aspects of cross-border estate planning is taxation. Both the US and UK impose estate or inheritance taxes, but they do so differently:
US Estate Tax
In 2025, the federal estate tax exemption is roughly $13 million per individual. However, this may be reduced in 2026, meaning more estates could become taxable.
UK Inheritance Tax (IHT)
IHT applies to estates over £325,000, taxed at 40% above that threshold. While exemptions exist, the rules can be strict.
Families with US and UK assets, or beneficiaries in both jurisdictions, must be mindful of double taxation risks. Thankfully, a US-UK estate tax treaty exists to help avoid being taxed twice, but interpreting and applying the treaty correctly requires specialist knowledge.
Without proper planning, cross-border estates can be hit with substantial tax bills, reducing the wealth passed on to heirs.
Drafting valid wills for both jurisdictions
Each country has its own rules for wills, probate, and asset distribution. A will valid in the US may not be accepted in the UK and vice versa. Instead, you can choose to draft a single international will (carefully structured) or create separate wills for each country.
Many experts recommend having separate, coordinated wills, each covering assets within its own jurisdiction. This simplifies probate and avoids legal conflicts. Just ensure the wills don’t unintentionally revoke each other.
Utilising trusts and lifetime gifts to minimise tax
Trusts and lifetime gifting are effective tools for reducing estate taxes in both countries. In the UK, for example, assets placed into a trust more than seven years before death may be excluded from the estate for IHT purposes. On the other hand, in the US, irrevocable trusts can reduce taxable estate value, especially for high-net-worth individuals.
Common strategies include discretionary trusts for flexible wealth distribution and gifting assets to reduce the size of your taxable estate. These strategies must be tailored to fit each country’s laws and your specific family needs.
Seeking cross-border legal help
Navigating estate planning across two countries requires specialist advice. Professionals experienced in US-UK cross-border planning can help align wills, trusts, and tax strategies with current laws, while ensuring compliance and financial protection.