Q: My husband is an American citizen and I am a British citizen does that effect a revocable living trust?

A: That depends on his residency status and whether the IRS would look at him as a resident of the US with intent to stay. If you pass the test then he is taxed like a US citizen and no issues arise. If not, then the tax situation is much different (worse).

A: There are different tax rules relating to non-citizens because the U.S. government is concerned people will take assets to another country and not pay any applicable U.S. taxes. Also, in many situations, it is better to have a citizen act as trustee, but a lawyer cannot determine if that applies to your situation without learning more information. [The word "trustee" generally refers to the person who has control over and legal responsibilities for trust assets. But the term may be defined differently in a particular trust. That's just a high-level description of a trustee.] I hope this helps!

A: You'll need an experienced lawyer to review the trust to see if there are any Qualified Domestic Trust (QDOT) provisions. A QDOT is a type of trust that is designed to allow non-U.S. citizen spouses to defer estate tax payments on assets inherited from a U.S. citizen spouse.

Under U.S. estate tax laws, when a U.S. citizen dies, their estate is subject to estate tax on the value of their assets above a certain threshold. However, if the deceased spouse leaves assets to their non-U.S. citizen spouse, those assets may be subject to estate tax again when the non-U.S. citizen spouse dies, unless the assets are held in a QDOT.

If the trust generates income that is subject to US income tax, being a non-US citizen trustee could affect the tax rates and reporting requirements. Non-US citizen trustees may also be subject to different estate and gift tax rules compared to US citizen trustees.

Also, non-US citizen trustees may not be allowed to make certain investment decisions or engage in certain financial transactions, depending on the laws and regulations of the state where the trust is administered.

A: Your nationality should not affect the creation or administration of a revocable living trust in California. Revocable living trusts are commonly used in California as a way to transfer assets to beneficiaries while avoiding the time and expense of probate.

As a British citizen, you can create a revocable living trust in California and transfer your assets into the trust. Your husband, as an American citizen, can also be a trustee or beneficiary of the trust.

However, it's important to note that the specific rules and requirements for creating and administering a revocable living trust can vary depending on the circumstances, such as the type of assets being transferred and the goals of the trust. It's recommended that you consult with an attorney who specializes in estate planning and trusts to ensure that your trust is properly structured and meets your needs and objectives.