Estate Planning for Undocumented Immigrants

immigration immigrants undocumented deportation estate planning

Many of the millions of undocumented immigrants currently living in the United States are hardworking individuals who simply want to provide a better life for their families. Despite this, they struggle with the daily threat of deportation, a burden made heavier by the fear of possible separation from family members, including children, who are U.S. citizens.

Though it’s scary to think about what one will do to survive if returned to their home country, one of the biggest concerns of deportation is not knowing whether the family you’re forced to leave behind will be taken care of financially. That’s why it’s always better to have some type of estate planning measures in place.

The following are just a couple of options available if you are one of the millions struggling with this fear:

Power of Attorney

The simplest estate planning option is to grant a U.S. citizen power of attorney. Much the same way a living will might work, the grantor can include what should be done with particular assets, healthcare matters, and who may be designated as the guardian of their children.

Self-Settled Trusts

Setting up a self-settled trust (sometimes called a “deportation trust”) is a bit more complex. This type of trust works in a similar way to an asset protection trust, wherein the grantor and the beneficiary are the same person.

The trust allows the grantor the ability to add guardianship details, stipulate the payment of debts and what should happen to assets not listed in the trust, and can be setup so that the beneficiary can receive discretionary payments approved by the trustee as long as the grantor is living in the United States.

This type of trust protects real estate, bank accounts, businesses and personal property, making it difficult, if not impossible, for authorities to freeze or confiscate these assets should the grantor suddenly be forced to leave the U.S.

There are three major hurdles one must consider before creating a self-settled trust:

  • The grantor must first apply for an International Taxpayer Identification Number (ITIN) with the IRS. This allows the undocumented citizen to open a bank account needed to setup the trust.
  • Only a handful of states currently allow self-settled trusts. California and Arizona do not recognize self-settled trusts, though California doesn’t necessarily prohibit them either. It’s just much harder to receive the benefits that the trust may allow.
  • Advanced planning is critical. Most states apply a protection statute of limitation on the trust, requiring a set time a trust must be in place before benefits will go into full effect. Do not wait to set up the trust when deportation is imminent, otherwise, there may not be enough time to settle all affairs.

For more information on these, or other estate planning options that may be available to you as an undocumented immigrant, or how taxation matters might affect you, contact a qualified immigration attorney.

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