When it comes to inheritance, America truly is the land of the free (except when it comes to taxes). But our government cannot tell us who gets to inherit our property, unlike some other countries, which can force their citizens to pass their estates to the heirs dictated by law.
On July 4, we celebrate our nation’s independence and the fight for freedom. One of the most basic liberties is the right to control one’s property, even in death. On this holiday, it is worth remembering that not every country takes that view. How do we compare to the rest of the world?
Estate or Inheritance Tax
This is the tax that must be paid after someone dies. It is based on their wealth at the time of death and must be paid before anyone receives their inheritance. Currently, in the United States, inheritance tax (also known as estate tax) only applies to estates worth more than $12.06 million, and fewer than 0.1% of all estates are large enough to be taxed. This number does fluctuate wildly and will likely change again. Some states also have estate taxes, but Florida is not one of them.
The top U.S. estate tax rate is 40%, although the average paid rate is 17%. Here is where we rank with other countries’ rates:
- Highest rates: 40-55%
- Japan: 55%
- South Korea: 50%
- France: 45%
- United Kingdom: 40%
- United States: 40%
- Lowest rate: 0%
- Australia, New Zealand, Austria, Canada, China, Hong Kong, India, Israel, Mexico, Norway, Sweden, and many more.
Women’s Rights to Owning Property
In America, property rights are gender-neutral; the law makes no distinction between what property men and women can own, control, and receive from an estate. Unfortunately, that is not true in many other countries, including some that may surprise you.
In Chile, for instance, the husband controls all property in a marriage, even the wife’s private property, unless she acquired it completely independent of him. If she has no income, it is unlikely that she will own much separately from him.
In England, France, Germany, and some other European countries, inheritance laws stipulate that the estate goes to direct descendants, which do not include the surviving wife.
The disparity is most significant in the Middle East, Africa, and Asia, where many countries have different and unequal inheritance laws for sons and daughters.
Forced Heirship
Can the government dictate who gets your estate after you die? It can in several other countries that have laws establishing forced heirship. That is not true in America.
Under forced heirship, you must leave a certain amount of your estate to your direct descendants (not necessarily including your surviving spouse). Forced heirship laws exist in Japan, the Philippines, and several European countries, including France, Germany, Italy, Spain, and Switzerland.
The laws vary in each country. In Germany, the law requires a forced heir to get at least half of what they would have received if there were no Last Will and Testament (“Will”). Switzerland is a little more generous; the surviving spouse and parents can be included in the estate if there are no direct descendants. In the Philippines, forced heirship covers the children, surviving spouse, and parents of the deceased.
In the United States, you can leave your assets to whomever you want, and you do not have to leave a penny to anyone except your current spouse or your minor children (those under 18 years of age). In some states, like Louisiana, you may not disinherit children under age 23. Louisiana also lays out specific reasons under which you are allowed to disinherit someone.
Having the right to dispose of your property as you wish means you must take action through estate planning. To protect your estate and your freedom to control it, contact OC Estate & Elder Law at (954) 251-0332 or info@ocestatelawyers.com for a free phone consultation. Our attorneys are fluent in English, Spanish, and Russian.
