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  1. #1
    Join Date
    Jul 2020
    Posts
    6

    Question Legacy Legal

    Hi guys,

    I have some questions regarding some legal legacy issues for a friend. His citizenship is Chinese, gained his permanent residency through same-sex marriage with an American citizen and has been living in the US for years and still married. His parents passed away a few days ago and he flew back to take care of everything. A Chinese lawyer showed him his parents' will which clearly and expressively states that as follows.

    No matter whether he is married or not, how many children he has/adopted and/or in any other circumstances, they only agreed to pass all their legacies (house, stocks, car, etc.) to him instead of any other people, such as his partner or his children is applicable. If he becomes divorced in the future, his partner or children can not take any percentage of their properties value in any way.

    Their will has been translated into English as well. Both Chinese and English wills have been notarized in China. He completely did not know this until he flew back to China and the lawyer reached out to him about his parents' will. He shared this information with this his partner. His partner believed that their will could not be honored/applied by the US law. If they got divorced one day, he should have half of his partner's assets no matter what simply because his partner got this legacy during the time they're still married, any assets should be divided equally by the time when they're divorced.

    1. is his partner correct?
    2. China does not allow same-sex marriage. So how does this work/not work?
    3. at this moment, all his parentsí legacies are not in the form of cash/check. If he sells everything, can he transfer all the money to the US? Will he be taxed on all amount as a permanent resident instead of an American citizen?
    4. he would not share any of his parents' legacy with his partner. Does their will suffice? What legal actions should he take to protect it?
    5. if he ends up with divorce because of this legacy division issue, will it make him lose his permanent residency?

    Please help and out and thank you guys!

  2. #2
    Join Date
    Oct 2014
    Posts
    8,238

    Default Re: Legacy Legal

    Quote Quoting Johnny829
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    1. is his partner correct?
    The issue of who get the assets his father had is determined by Chinese law since his father evidently was a Chinese citizen still domiciled in China when he died. Once your friend gets whatever property his father gives him how those assets would be divided later in a divorce between him and his partner will be determined by the law of the state in which the divorce is obtained except to the extent assets remain in China, in which case the law both the state where the divorce is obtained and Chinese law may matter. This site only handles issues of U.S. law. Chines law is in many respects quite different from U.S. law/

    As for divorce, in pretty much every state of the U.S. property a spouse gets by inheritance is his/her separate property and not divided in a divorce. However, that said, if they live in a community property state at any time your friend would need to take care that he does not do anything that would convert that separate property to community property.


    Quote Quoting Johnny829
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    2. China does not allow same-sex marriage. So how does this work/not work?
    China won't recognize his marriage. How that may impact what he gets from his father or how he may pass assets like real estate that are still in China depends on Chinese law, and I've no clue how Chinese law affects those things.

    Quote Quoting Johnny829
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    3. at this moment, all his parentsí legacies are not in the form of cash/check. If he sells everything, can he transfer all the money to the US? Will he be taxed on all amount as a permanent resident instead of an American citizen?
    The US imposes no restrictions on persons bringing in money from outside the country, though there are reporting requirements that may need to be complied with. If he brings the money in as cash or cash equivalents and the amount exceeds $10,000 US then he'll need to file a FinCen 105. See the ICE page on bringing money into the US. Regardless of whether he leaves his inheritance in China or brings the assets back to the U.S. he must file a Form 3520 with the IRS if his inheritance is $100,000 US or more. Finally, if at any time he holds an interest in a foreign financial account that exceeds certain dollar amounts he will also have additional filing requirements: A FBAR filing requirement with the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) on FinCen Form 114 and/or filing Form 8938 with the IRS. The IRS has a foreign account filing chart that explains when you need to file each of these forms and has links to each form. There is no fee or tax for filing any of these forms. But failure to file these forms can result in huge penalties, so he will want to be sure to comply with all the applicable filing requirements.

    There is no customs tax for bringing in money to the U.S. and inheriting assets is not taxable income in the U.S. Note that U.S. permanent residents are taxed exactly the same as U.S. citizens.


    Quote Quoting Johnny829
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    4. he would not share any of his parents' legacy with his partner. Does their will suffice? What legal actions should he take to protect it?
    He should see an estate planning attorney in his state. If he lives in a community property state he'll need to learn what to do to avoid converting his inheritance into community property. Also, in many states a spouse has the right to elect against a will and take a statutory share of the estate instead. So he will need to find out how that election will impact his estate planning. If most of his assets are from this inheritance it may prove impossible to prevent his spouse from getting at least part of it. To the extent assets remain in China he'll need to consult a Chinese lawyer or a lawyer in the U.S. who is well acquainted with Chinese inheritance laws to see how Chinese law will impact his estate planning.

    Quote Quoting Johnny829
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    5. if he ends up with divorce because of this legacy division issue, will it make him lose his permanent residency?
    No. Now that he is a permanent resident a divorce should not impact his immigration status other than perhaps making him wait an additional two years to get citizenship. So long as he did not lie on his immigration documents he should be fine. If, however, the marriage was really a sham, for example, that could be a problem.

  3. #3
    Join Date
    Jul 2018
    Posts
    2,730

    Default Re: Legacy Legal

    1. Maybe. It depends on whether your friend and his spouse live in a community property state or an equitable division state. Please identify their state.

    2. Doesn't matter, unless you're talking about property that is actually located in China.

    3. We have no reason to believe he would lack this ability.

    4. Does their will suffice for what purpose? Legal actions to protect what?

    5. Impossible to predict, but your post makes me at least suspect that your friend's marriage was a sham for the sole purpose of gaining permanent residency in the U.S.

    It may help you to know that, whether your friend is in an equitable division state or a community property state, assets acquired through inheritance are not considered to be marital/community property. In community property states, that means such assets are generally not subject to division on divorce unless they have been commingled with community property assets.

  4. #4
    Join Date
    Jul 2020
    Posts
    6

    Default Re: Legacy Legal

    Thank you. That was very helpful

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