When your rich uncle in Texas dies and you suddenly inherit from the USA
An inheritance from the USA brings money, but also tax pitfalls. Here is what European heirs need to watch out for.
Picture this: you are enjoying a relaxed Sunday brunch at home in Europe when a registered letter arrives from the USA. Inside, a notary from Texas informs you that your (admittedly slightly eccentric) Uncle George, who spent decades on his ranch somewhere between Austin and Amarillo, has passed away, and you are one of the heirs.
Your first thought? “Yeehaw!”
Your second thought: “Oh no, what does this mean for my taxes?”
That is exactly what this article is about. Welcome to Mount Bonnell Advisors: we bring order to your American inheritance. And don't worry, it is more entertaining than it sounds.
USA: No inheritance tax shock, or is there?
First, the seemingly good news: if you are neither a US citizen nor a “US resident”, you personally owe no inheritance tax (estate tax) in the USA, at least when the deceased was a US person. In that case the tax is paid by the estate itself before anything is distributed. The exemption is $15 million (2026). Only the amount above that is taxed, at up to 40 %, so in practice this only hits very large estates.
But careful: if the deceased was not a US taxpayer (resident) but, say, a European with a holiday home in Florida or a brokerage account at Merrill Lynch, different rules apply. Then a sharply reduced exemption of just $60,000 applies, and everything above it can be fully hit by estate tax.
Example: An Austrian uncle dies owning an apartment in Manhattan worth $1.5 million. Although he was not a US citizen, estate tax of up to 40 % may apply to $1.44 million. A disaster for many heirs, and often one they never saw coming.
So get advice before you pass on or take over US assets. We have covered the details of US estate tax for non-US citizens separately for you.
Switzerland
Now the practical part: how do I get my money?
However generous the deceased was, a US bank will not release anything just because you show them a letter. In practice you need:
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a certified copy of the will or a so-called probate order
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often a local US attorney to handle the probate proceedings
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and almost always an ITIN, the tax number for foreigners
The truth about the ITIN
The Individual Taxpayer Identification Number (ITIN) is a must if you:
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receive US income (e.g. rent, dividends, interest)
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earn income from inherited US bank or brokerage accounts that is reported to the IRS
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have to file a US tax return (including as an heir)
But: getting an ITIN is not quick. It usually takes several months, and without experienced support, applications are often rejected.
Mount Bonnell Advisors can guide you through the entire ITIN process, including identity verification by IRS-certified agents, without you having to travel to the USA.
When real estate is involved…
Inheriting a house in Florida, an apartment in New York or a ranch house in Arizona? Then more is coming your way:
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Transfer of ownership (title transfer)
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Property tax: the clock keeps ticking from day one
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possibly local property management or renting out
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and often a US tax return because of rental income
In other words, you are suddenly a landlord in the USA. Congratulations, but you need a plan. Mount Bonnell Advisors works with experienced US property managers and accountants to handle your new obligations, so you don't have to become an “American landlord” yourself.
What happens when there are several heirs?
Several heirs (say, you, your cousin in Zurich and a long-lost cousin in Berlin) often mean drawn-out probate proceedings.
A court-appointed executor handles the estate. If there is a dispute, the whole thing often takes years, especially with real estate or trusts. Here too, we can recommend US attorneys to represent your interests.
Trusts: a tax trap made in America?
More and more Americans use trusts to pass on their wealth. Often a good solution for US citizens, but for foreign heirs a nightmare.
Mount Bonnell Advisors knows these situations well and works with US law firms to document, assess and, where needed, adjust trust structures cleanly for tax purposes. How US trusts are taxed for clients who do not live in the USA is explained under US trusts.
A US inheritance is not a lottery win, it is a tax operation
Inherit from the USA and you get more than dollars: you also get paperwork, reporting duties, tax forms and pitfalls.
Our advice:
Don't wait. Get professional advice early.
Because with international inheritances involving trusts, real estate or large sums, mistakes get expensive fast, often running into six figures.
What you can do now
Have you inherited, or are you expecting an inheritance, from the USA?
Then book a paid initial consultation with Mount Bonnell Advisors. We analyze your individual situation and give you concrete recommendations: tax, legal and practical.
Need an ITIN or want access to US accounts?
We support you through the entire process, including communication with US banks, notaries and the IRS.
Want to sell or rent out an inherited property?
We handle that too, with our partners on the ground in Texas, Florida, New York or California.
Book an appointment now, before the tax office moves faster than your payout.
Consultation & implementation
If you'd like to find out what this means for your own situation, the best step is to book a consultation.
