EP 18: What is English for “Situs?”
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In today's "Shortie" episode, we define the word "Situs." It comes up a lot when discussing investment property and other types of investment.
Situs is heavily used in the cross-border space. We tell you what it is, its importance in the legal, tax, and estate planning arena, and how it affects what happens to property at the end.
We'll also address different types of properties.
Situs is not to be confused with domicile - We defined domicile in Episode 8.
The speakers' views and opinions discussed in this episode should not be considered financial, tax, or legal advice. Consult your advisor for any legal, cross-border tax, and financial advice.
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Jane Mepham, CFP (00:02.883)
shortie episode. These are episodes where in 10 minutes or less, Manasa and I will take a term used in the cross-border space or tax financial terminology and sort of give it to you in common English. Today's terminology or term is SITUS, S-I-T-U-S. This is really, really key in the cross-border context. So, Manasa.
What is Situs and why do we care what we want to talk about? Take it away.
Manasa Nadig, EA (00:35.978)
Yes, thank you Jane. CITUS is the location of a property for legal purposes and it depends on the type of item. So for most physical items the CITUS is the place where the object is located presently and you know it is important for legal tax and estate planning because
The type of the item determines the treatment of it for legal purposes. Say, for example, let's go into this. If it is a tangible, movable item, like let's say artwork or jewelry, or is it a tangible, immovable item, like maybe real estate in the US?
Or what if it is an intangible item like stocks or shares of life insurance policies and such? So knowing what the CITUS is then becomes an important point to consider. Jane?
Jane Mepham, CFP (01:50.179)
Right. And so just to kind of go into a little bit on that, let's say for example, because we deal with some of these all the time, if you have an insurance policy, the status for that policy is where the application is signed and the policy delivered, which means the laws of that state will apply. If you think of, let's say, another example is that, let's say like an irrevocable trust.
where this is created and signed. And by this, I mean the country and the state is really what laws will apply. There is a big difference between domicile and situs. And we actually talked a lot about domicile in episode eight, and we're going to put a link to this. And so the question still comes back to and this is the part that we want to answer in the cross-border context.
Why do we care about Situs? Why do we care about where assets are located?
Manasa Nadig, EA (02:52.146)
Oh, definitely. And that's something that keeps coming up, you know, because right now, in a cross border context, if you look at the estate exemption for US citizens on their worldwide assets, it's at around 13.61 million dollars in 2024. This may change soon. But here we're just looking at the difference between
what the US citizens have as an exemption amount and what a non-US citizen has as an exemption amount, which is just around $60,000. So if you are a US citizen, excluding about $13.61 million on your worldwide assets may or may not be that big a deal. But if you are a non-US citizen,
and you have assets which are located in the US and you have a lower US gift or estate tax exclusion, then it becomes an important thing for you to remember to plan for the future. So that's one of the reasons why you should care to know what the Situs of your asset is.
Jane Mepham, CFP (04:12.911)
Mm-hmm and in talking about
Yeah, talking about that, one of the things that I've seen, which really makes this practical is if you're a foreign national on a non-immigrant work visa and Manasa and I work with a lot of people in this situation, you really do need to take this into consideration. And especially if you have minor children, if you have any assets, let's say, and something happens to you, guess what?
be applying to your estate. So obviously you need to take into consideration what assets you have. You need to take into consideration your minor children, your family, and how you want to leave them and what assets you want to leave them with. So it's key that you understand where your assets are located, hence the Situs of your assets. And I think
We've addressed it in 10 minutes or less. I'll pass it back to you, Manasa, to conclude.
Manasa Nadig, EA (05:17.602)
Thank you, Jane. Yes. So if you, dear listener, like listening to our shortie episodes, and of course, our long episodes as well, hit follow on any major podcast platform you like and listen to our episodes. And please share that with your friends and family. Thank you.
