A Korean-American couple with a home in New York and an apartment in South Korea created an estate plan that combined a living trust and QDOT to avoid probate and minimize their estate tax liability.
Client background
- Family organization: Husband (U.S. citizen), wife (permanent resident), 2 adult children
- U.S. assets: Queens Own Home ($1.2M), Retirement Account ($400K), Life Insurance ($500K)
- South Korea Assets: Seoul apartment (market value of 800 million won), Korean bank deposits
- Total assets: Approx. $2.7M
Key challenges
- My wife is a permanent resident (non-citizen), so the Unlimited Marital Deduction doesn't apply to her
- Risk of double taxation due to assets in both the U.S. and Korea
- I want to avoid probate proceedings
- You want to pass assets to your children efficiently
Succession planning by design
- Revocable living trustsAvoid Probate by Transferring U.S. Home and Financial Assets into Trust Name
- Qualified Domestic Trust (QDOT)Setting up a QDOT for my wife, a non-citizen spouse - deferring estate taxes during her lifetime
- Pour-Over Will: Transferring assets not included in a trust to a posthumous trust
- Power of Attorney + Healthcare DirectiveDesignate property management and health care decisions in case of incapacity
- Korea Asset Separation PlanPrevent double taxation by creating separate wills under Korean law and utilizing the Korea-US tax treaty
Result
- Probate avoidanceMajor assets in the U.S. transferred to the trust, eliminating post-mortem probate proceedings
- Estate tax deferral: QDOT allows you to defer paying estate taxes if your wife survives you
- Avoid double taxation: Strategizing for foreign tax credits under the U.S.-Korea tax treaty
- Family peace of mindPrevent family disputes with a clear estate plan
Key takeaways
For Korean-American families with assets in both the U.S. and Korea, a simple will is not enough - especially if you have a non-citizen spouse - without a QDOT, you could be immediately subject to estate taxes and forced to sell your home. Advance planning protects your family's wealth.
* Initials and some details have been changed to protect the client's privacy.
Phone: (718) 353-2699 | Email: jd@choattorneys.com
