An international succession is never the simple addition of two systems
When an estate is divided between France and the United States, the succession becomes a balancing act between two very different legal, tax and administrative frameworks.
Many families think that it is enough to apply the rules of each country independently. In reality, it is often the interaction between these systems that creates the main difficulties.
The result: longer deadlines, unforeseen costs and sometimes deadlock situations for the heirs.
Trap n°1: the double inheritance procedure
In a transatlantic succession, it is common for two separate procedures to be necessary:
- a procedure in France;
- a procedure in the United States (probate in some states).
Each jurisdiction has its own rules, deadlines and formalities.
In the United States, the probate procedure can result in:
- a temporary asset freeze;
- significant legal costs;
- publicity of the estate;
- deadlines that can vary greatly from one State to another.
Source : https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax
Trap n°2: unsynchronised inheritance taxation
France and the United States apply different tax logics in terms of inheritance.
- In France: taxation based on family ties and the value of property.
- In the United States: potential estate tax depending on the status of the deceased and the location of the assets.
In some cases, the same estate may be exposed to two different tax systems, requiring the application of tax treaties to limit double taxation.
However, these mechanisms are not automatic and depend heavily on the structure of the assets.
Trap n°3: poorly structured real estate assets
Real estate is often the most problematic asset in an international succession.
Without appropriate structuring:
- goods may be subject to different procedures depending on the country;
- the heirs may be in international joint ownership;
- The sale may be delayed by local legal constraints.
In some cases, the lack of planning can force a flip sale of assets to pay for fees and taxes.
Trap n°4: bank accounts and blocked investments
In the United States, accounts and financial assets may be temporarily blocked during the inheritance process.
This can create:
- a lack of liquidity for heirs;
- difficulties in paying inheritance taxes;
- delays in the management of global assets.
This risk is even greater when assets are spread across multiple countries and financial institutions.
Trap n°5: differences in inheritance law
France and the United States are based on opposing legal logics:
- France: protection of forced heirs;
- United States: testamentary freedom (depending on the state).
These differences can lead to conflicts of interpretation when estate documents are not perfectly coordinated.
A will that is valid in one country may not produce the expected effects in the other.
Trap n°6: Trusts misunderstood or misused
Trusts are widely used in the United States to organize the transfer of wealth.
In particular, they make it possible to:
- avoid probate;
- Centralize asset management.
- to organize a gradual transmission.
However, in a Franco-American context, their tax and legal treatment can become complex, especially when the settlor or the beneficiaries are subject to French taxation.
Pitfall 7: Tax residency issues
Tax residency is a determining factor in an international succession.
It influences:
- the applicable tax regime;
- the location of inheritance tax;
- the reporting obligations of the heirs.
A misclassification of the tax residence can significantly modify the overall cost of the transfer.
Pitfall n°8: lack of liquidity at the time of succession
In many international successions, wealth is mainly composed of illiquid assets (real estate, shareholdings, long-term investments).
Without sufficient liquidity:
- heirs may be forced to sell assets quickly;
- delays in paying fees can be problematic;
- The estate can become financially strained.
Pitfall n°9: the lack of coordination of legal documents
A transatlantic succession often requires several documents:
- American will;
- French will;
- possible trust;
- Asset holding clauses.
Without coordination, these documents can contradict each other, leading to disputes or divergent interpretations.
Pitfall n°10: underestimating administrative complexity
International succession involves a multiplicity of actors:
- notaries;
- lawyers;
- tax institutions;
- banks in several countries;
- administrators of estates.
Each actor applies its own rules, deadlines and documentary requirements.
Franco-American families particularly exposed
When the family is divided between France and the United States, the risks of complexity increase:
- heirs in several jurisdictions;
- assets spread across multiple countries;
- currency differences;
- non-aligned tax systems.
Without planning, succession can quickly become a time-consuming and expensive process.
How can the risks be reduced?
Effective planning is generally based on:
1. A global vision of heritage
All assets must be identified and mapped.
2. International legal coordination
The documents must be consistent between the jurisdictions concerned.
3. Optimisation of the holding structure
Trusts, real estate companies or asset structures can simplify the transfer.
4. A liquidity strategy
Provide financial resources to cover:
- inheritance tax;
- legal fees;
- the needs of the heirs.
5. Regular analysis of the situation
Tax and family rules are changing, as is the composition of assets.
In conclusion
Transatlantic succession is a complex area where the risks do not only come from the rules of each country, but above all from their interaction.
Dual procedures, non-aligned taxation, illiquid assets, poorly coordinated legal structures: the pitfalls are numerous but often avoidable.
Well-constructed international wealth planning makes it possible to transform a potentially complex process into a fluid, anticipated and controlled transfer.
In a Franco-American context, anticipation remains the main lever of security for families.
Official sources used
- IRS – Estate Tax : https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax
- IRS – International Taxpayers : https://www.irs.gov/individuals/international-taxpayers
- Service-Public.fr – Successions: https://www.service-public.fr
Future written communications may be in English only. This material is provided for educational purposes only and should not be viewed as a recommendation or as investment, tax, or legal advice. Guardian and its subsidiaries do not provide tax or legal advice. Individuals should seek advice from their own qualified tax and legal professionals regarding their specific situation and any strategies discussed. 8967228.1 Exp 6/28