Estate planning for NRIs on a work visa: what a trust won't fix

Estate planning for NRIs on a work visa usually starts with a revocable trust, which avoids probate but not US estate tax. If you aren't domiciled in the US, the IRS counts the trust's assets in your estate, taxing US assets above $60,000 at up to 40%. Fix your beneficiary forms first.

Estate planning for NRIs on a work visa starts with domicile

Your domicile, not your visa, decides which US estate tax rules apply to you. A domiciled person's estate gets a $15,000,000 basic exclusion amount for 2026. A non-domiciled person's estate gets a $13,000 credit under IRC §2102(b), which shelters the first $60,000 of US-situated assets and nothing more.

Domicile is about intent, not immigration status

Treasury Regulation §20.0-1 says you acquire a domicile by living somewhere with no definite present intention of leaving. Residence without the intention to remain indefinitely isn't enough. Two people on the same H-1B can land on opposite sides of that line.

Your income tax status is a separate test. The substantial presence test can make you a US tax resident for income tax while you stay non-domiciled for estate tax. Nobody can promise the answer, because it turns on where you live, where your family and assets are, and where you plan to stay.

What the two answers cost

Take Priya, who is on an H-1B, plans to move back to India, and holds $500,000 of US stocks and RSU shares.

Worked example: Priya's federal estate tax

• Tax on $500,000 under IRC §2001(c): $155,800
• Less the §2102(b) credit: $13,000
• If she's non-domiciled, federal estate tax: about $142,800
• If she's domiciled, federal estate tax: $0, because $500,000 sits far under $15,000,000

Her executor would file Form 706-NA within nine months of her death. Vested company shares are US-situated, which is why estate tax on RSUs catches work-visa holders.

A few states add their own layer, and Washington's estate tax reaches RSU holders too.

What a revocable trust does for you

Trust assets skip probate

Assets titled in your trust pass to your beneficiaries without a court-supervised probate. That matters most if you own real estate in more than one state, because each state where you hold real property can require its own ancillary probate. A probated will is also generally a public court record, and a trust distribution isn't.

The assets that belong in the trust are the ones with no beneficiary form, such as real estate and a brokerage account without transfer-on-death registration.

What it leaves untouched

A trust is a titling tool, and several things sit outside it:

• Estate tax. Under IRC §2038, property you can take back is in your gross estate, and §2104(b) applies the same logic to a nonresident's US property.
• Income tax. IRC §676 treats you as the owner of a revocable trust, so its income stays on your return.
• Retirement accounts. A 401(k) pays whoever its beneficiary form names, and the Supreme Court held in Kennedy v. Plan Administrator for DuPont Savings and Investment Plan that a plan follows its own documents. IRAs and HSAs also pass by their own beneficiary forms.
• Guardians. A will is the usual place to nominate a guardian for minor children, and state law decides how that works.
• Indian assets. Indian property and accounts follow Indian succession law, which depends on your religion, so you need an Indian will alongside any US paperwork.

Who this applies to

If you're non-domiciled and your US-situated assets (brokerage, RSU shares, US real estate) exceed $60,000, the estate tax exposure is real and a trust doesn't change it. If you intend to stay in the US indefinitely, the $15,000,000 federal exclusion makes a trust a probate and incapacity tool, not a tax tool.

Indian bank accounts, Indian property, and other non-US assets aren't US-situated, so they don't count toward the $60,000. A non-citizen spouse changes the planning, because the marital deduction needs a Qualified Domestic Trust to work.

What to do first, in order

1. Read the beneficiary form on every 401(k), IRA, HSA, brokerage account, and life insurance policy.
2. Sign a will that names an executor and nominates a guardian for any minor children.
3. Add a power of attorney and a healthcare directive that your family can actually use.
4. Estimate your US-situated assets and decide, with an adviser, whether you're domiciled.
5. Write an Indian will for your Indian assets.
6. Add a revocable trust only when it earns its fee: real estate in several states, privacy, or an incapacity plan you want in writing.

If you're non-domiciled and close to $60,000, the fix is structural: hold assets that aren't US-situated, such as Irish-domiciled ETFs.

I'd put the trust last. If your biggest assets are a 401(k) and a brokerage account, beneficiary forms and transfer-on-death registration do most of the probate work for less money.

Domicile is the call worth paying a cross-border adviser for, because in the $500,000 example it moves the tax from zero to about $142,800.

Common misreadings

• "My H-1B makes me a nonresident for estate tax." Visa status doesn't decide it. Domicile does, and that turns on intent.
• "I signed a trust, so I'm covered." Anything still in your own name when you die goes through probate, whatever the trust says.
• "A trust takes my estate tax away." The trust assets are still in your gross estate, so the tax is the same.

Start with the forms you already have

This week, read the beneficiary on each of your 401(k), IRA, and brokerage accounts, since that is the cheapest fix on this list. I'd hold off on a trust until you know whether you're domiciled. If you want a second opinion on that call, InvestMates can walk through it with you.