As our world becomes more interconnected, many American families find themselves with strong ties to Israel—whether through property ownership, business interests, or beloved children and grandchildren who live there. If you are a U.S. person (a U.S. citizen or green card holder) with assets or descendants in Israel, thoughtful cross-border estate planning is essential to ensure your wishes are honored and your loved ones are protected.

1. Understanding Cross-Border Estate Planning

Estate planning becomes more complex when it involves more than one legal jurisdiction. The United States and Israel have distinct laws regarding inheritance, taxation, and probate. Without a coordinated plan, your estate may be subject to unnecessary delays, expenses, or even legal disputes.

A well-crafted estate plan should bridge the gap between U.S. and Israeli legal systems to avoid these pitfalls and provide clarity for your heirs.

2. Key Issues to Consider

A. Differing Inheritance Laws

In the U.S., estate planning is largely governed by state law, and you can generally distribute your assets as you wish. In contrast, Israeli inheritance law is statutory and, absent a will, follows a strict order of succession.

If you pass away without a will (intestate), Israeli courts will apply local inheritance rules to any Israeli-situated property—even if your U.S. documents say otherwise. A properly executed will, ideally one that complies with both U.S. and Israeli requirements, is crucial.

B. Israeli Assets

Real estate, bank accounts, business interests, or investments in Israel can trigger probate proceedings in Israeli courts. Even if your primary estate is handled in the U.S., separate Israeli probate may be required for these assets.

To streamline this process, you may consider:

A separate Israeli will for assets located in Israel (coordinated with your U.S. estate plan to avoid conflicts).
Structuring ownership through entities or trusts where appropriate.
Designating local executors or trustees who can manage affairs on the ground.

C. Tax Considerations

The United States imposes estate taxes on the worldwide assets of its citizens and residents. Israel does not currently have an estate or inheritance tax, but it does have capital gains taxes that may apply when inherited property is later sold.

U.S. estate taxes may still apply to Israeli property. To avoid double taxation and maximize any available exemptions (like the federal estate tax exemption), it’s critical to work with professionals familiar with cross-border tax strategies.

3. Planning for Israeli Heirs

If your beneficiaries live in Israel, additional considerations come into play:

Currency Transfers: Distributing U.S. assets to Israeli residents may involve currency exchange regulations and bank reporting.
Gift and Inheritance Laws: While Israel has no gift or estate tax, significant foreign transfers may trigger compliance reviews or reporting obligations.
Trusts and Guardianships: If you are leaving assets in trust or naming guardians for minor children or grandchildren in Israel, be sure these structures will be recognized under Israeli law.

4. Legal Documents to Review

To ensure your plan functions as intended in both countries, review and update the following:

Wills (consider a U.S. will and an Israeli will, properly coordinated)
Trusts (with U.S. and Israeli tax implications in mind)
Power of Attorney and Health Care Directives (valid in both jurisdictions if possible)
Beneficiary Designations (for retirement accounts and life insurance)

5. Work With Cross-Border Professionals

At Kierman Law, we understand the nuances involved in cross-border estate planning. We collaborate with legal and tax professionals in Israel to ensure your estate plan is:

Legally valid in both the U.S. and Israel
Optimized for tax efficiency
Structured to reduce administrative burdens

Aligned with your personal, familial, and charitable goals

Final Thoughts

Whether you own an apartment in Tel Aviv, support family living in Jerusalem, or simply want to leave a legacy that crosses continents, estate planning with an international lens is essential. With careful coordination and experienced guidance, you can protect your assets and ensure your loved ones—no matter where they live—are cared for according to your wishes.

Contact Kierman Law today to discuss how we can help you plan for your cross-border legacy. (480) 719-7333