A Comprehensive Estate Planning Checklist for US/ UK Connected Families

Written by Dan Keeley

Estate planning is more than just drafting a will, it’s about creating a long-term strategy to protect your wealth, provide for your loved ones, and ensure your legacy lives on. For families with connections in both the United States and the United Kingdom, planning becomes even more critical due to the differences in tax laws, inheritance rules, and probate systems. Whether you have property, family, or financial interests in both countries, here’s a detailed estate planning checklist to help you navigate the process effectively.

Understand the Differences Between the US and UK Estate Tax Systems

The first and most crucial step in cross-border estate planning is understanding the key differences in tax systems.

As things stand, in the United States, the federal estate tax applies to estates valued above a high exemption threshold of c. $13.99 million per individual ($27.98 million for married couples) in 2025. Anything above that is taxed at a rate of up to 40%. Additionally, some states impose their own estate or inheritance taxes with lower thresholds and different rules.

It is worth noting that the $13.99 million threshold is due to “sunset” at the end of 2025 and, unless Congress intervenes, the lifetime gift tax exclusions will reduce to c. $7.2 million (per individual) as of 1^st January 2026. Therefore, if your estate is worth more than $7.2 million, then there may be a benefit to expediting gifts from a US perspective and seizing the opportunity to capture the higher threshold. That said, careful consideration should be given before you do anything and please feel free to reach out to MASECO to discuss your family’s situation.

In the United Kingdom, the equivalent tax is known as Inheritance Tax (IHT). It is levied on estates over £325,000 (Nil Rate Band) at a flat rate of 40%. This threshold can be increased in certain situations, such as if you are passing wealth directly to your spouse/ civil partner or if you’re passing your home to direct descendants. Unlike the US, the UK system also takes into account lifetime gifts made within seven years of death, potentially pulling them back into the taxable estate.

Importantly, your domicile status plays a central role in UK inheritance tax planning and can differ from your tax residency. A US citizen considered a “Long Term Resident” in the UK (i.e. an individual who has lived in the UK for more than 10 of the last 20 UK tax years), may be subject to tax in both countries. While the US-UK estate tax treaty can offer relief from double taxation, navigating it requires careful planning and advice.

Ensure You Have a Valid Will (or Wills)

A legally valid will is the foundation of your estate plan. If you have assets in both the US and the UK, you will need to consider whether a single global will or separate wills for each jurisdiction is more appropriate.

A global will may streamline the process, but it must be drafted carefully to ensure it is legally effective in both countries.
Separate wills, one for the UK and one for the US, can provide clarity and make probate easier in each country. However, these must be carefully coordinated to avoid conflicts or unintended revocations.

Either way, your will should clearly detail how your assets should be distributed, appoint guardians for minor children, and name your executors.

Seek Cross-Border Professional Advice

Estate planning becomes significantly more complex when it spans multiple jurisdictions. One of the most important things you can do is work with experienced professionals who understand both US and UK laws.

This might include estate planning attorneys, tax advisors, and financial planners. Their expertise will ensure you navigate issues like domicile, tax treaties (such as the US-UK estate tax treaty), and compliance with both countries’ inheritance laws effectively.

Professionals can also help you structure your affairs, through trusts, tax-efficient investments, or lifetime giving, in a way that meets your financial and personal objectives across borders.

Please feel free to reach out to MASECO and we can either help answer your questions or put you in touch with our trusted network of specialist advisors.

Establish a Lifetime Gifting Strategy

Strategic gifting can significantly reduce your estate’s tax burden, but the rules differ between the US and UK.

In the US, individuals can gift up to $19,000 per recipient per year (in 2025) without using their lifetime exemption. Larger gifts, unless to their spouse/ civil partner, are tracked against the lifetime exemption and reported to the IRS.

In the UK, individuals can make small annual gifts (e.g., £3,000 total annually, plus wedding or birthday gifts) without triggering IHT. More substantial gifts may be considered “Potentially Exempt Transfers” and fall under the “7-year rule”, if you survive seven years after making the gift, it may fall outside your estate for Inheritance Tax purposes.

Given the UK’s relatively low £325,000 Nil Rate Band, making Potentially Exempt Transfers can be a very tax-efficient way to pass substantial wealth to your beneficiaries, but you must survive for 7 years following the gift to ensure that no Inheritance Tax is due.

It’s wise to maintain records of all gifts and work with advisors to determine the most tax-efficient way to support your loved ones during your lifetime.

Consider Leaving a Legacy to Charity

Charitable giving is not only a way to support causes that matter to you, it can also reduce your estate’s tax bill.

In the US, charitable donations are deductible from the value of your taxable estate, potentially saving your heirs a significant amount.
In the UK, if you leave 10% or more of your estate to charity, the IHT rate on the remainder may be reduced from 40% to 36%.

You can structure charitable giving through bequests in your will, charitable trusts, or donor-advised funds, depending on your goals and where the assets are held.

Summary

Estate planning for families with ties to both the United States and the United Kingdom requires a coordinated, cross-border strategy. We at MASECO specialise in helping clients devise and implement, estate plans that work for their family’s specific needs. We can work alongside our client’s existing advisors, or bring in our network of trusted advisors, to help ensure that your plans are watertight from a legal, tax and planning perspective.

By taking these steps now, you’ll bring clarity and confidence to your family’s future, wherever your assets are located.

The Legal Stuff

This document may not be forwarded, copied or distributed without our prior written consent. This document has been prepared by MASECO LLP for information purposes only and does not constitute investment, tax or any other type of advice and should not be construed as such. The information contained herein is subject to copyright with all rights reserved.

The views expressed herein do not necessarily reflect the views of MASECO as a whole or any part thereof. All investments involve risk and may lose value. The value of your investment can go down depending upon market conditions and you may not get back the original amount invested. Your capital is always at risk. Information about potential tax benefits is based on our understanding of current tax law and practice and may be subject to change. The levels and bases of, and reliefs from, taxation is subject to change. The tax treatment depends on the individual circumstances of each individual and may be subject to change in the future.

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