U.S.-Israeli Tax and Estate Planning for Dual Citizens

The close social and political ties between the United States and Israel make for significant economic migration for citizens of both countries. Many American citizens avail themselves of the "right of return" (Hok Hashvut) to emigrate to Israel and claim dual citizenship.

Estate planners and advisers serving clients contemplating emigration to Israel must know specific issues and provisions in Israeli and U.S. law governing estate and trust transfers to avoid costly tax consequences. The differences between U.S. and Israeli estate and wealth transfer rules present several important challenges.

Although Israel does not impose an estate tax, a recently passed Israeli law imposes significant Israeli income tax liabilities and reporting obligations on trusts created by a foreign person with Israeli beneficiaries.

The U.S.-Israel tax treaty allows for reciprocal credits for U.S. estate tax and Israeli taxes. Still, estate planners must reconcile the differences between the two countries' tax regimes and plan to minimize the tax impact of wealth transfers. This requires a thorough grasp of treaty provisions and recognizing the U.S. and Israeli income and gift tax implications of wealth planning transactions.

Listen as our experienced panel discusses planning clients' estates with U.S. and Israeli tax presence, focusing on Americans seeking Israeli citizenship, including interests in business entities, real estate, and financial accounts. The panel will cover the legal and tax considerations when planning for the disposition of each type of asset.

I. Estate planning and probate for the global family involving the U.S. and Israel

II. Israeli income tax treatment of foreign trusts

III. U.S.-Israel income tax treaties

IV. U.S. disclosure requirements

V. Structuring and planning before emigration to Israel

The panel will review these and other notable issues:

• What are the considerations required to reduce the overall cost of inheritance, including relevant taxation, when there are U.S. and Israeli nexuses?
• What is the tax treatment for foreign-settled trusts with Israeli beneficiaries?
• Where are the "gap" areas in the U.S.-Israel tax treaty where income may be subject to dual taxation, and how may planners structure trust vehicles that minimize the impact?

Learning Objectives

After completing this course, you will be able to:

• Identify differences in U.S. and Israeli estate and inheritance law that may impact the U.S. estate plans of taxpayers with a presence in Israel
• Determine needed steps in adjusting existing U.S. estate plan before emigrating to Israel or seeking dual citizenship
• Recognize income tax impact of foreign-settled or situs trusts with Israeli beneficiaries
• Discern areas where the U.S.-Israel tax treaty may not protect trust assets and distributions from dual taxation

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite:

  Three years+ business or public firm experience at mid-level within the organization, drafting wills and trust documents, supervising other attorneys or estate planners. Specific knowledge of concepts regarding taxation of foreign investments held by U.S. taxpayers; familiarity with tax treaty provisions.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).