My husband and I live in Japan while managing U.S. bank accounts, joint holdings, and 401(k)s. Whether you’re an American who moved to Japan or a Japanese national who worked in the U.S., organizing a cross-border estate plan is critical—and often overwhelming.
This guide provides a roadmap to help you organize your affairs, protect your family from U.S. probate, and save time and money before consulting a cross-border legal specialist.
At a Glance: How Assets Pass at Death
Probate Assets: Assets held solely in your name that do not have an applicable beneficiary designation or other arrangement allowing them to pass outside probate. Depending on the state and the asset, court-supervised probate may be required.
Non-Probate Assets: Assets such as 401(k)s, IRAs, life insurance proceeds, and eligible POD (Payable on Death) or TOD (Transfer on Death) accounts that generally pass directly to designated beneficiaries outside probate.
Trust Assets: Assets properly transferred into a living trust before death. These assets can generally pass to beneficiaries according to the trust's terms without going through probate.
Table of Contents
1. The First Line of Defense: How to Avoid U.S. Probate
2. Why the "State" in Your U.S. Will Still Matters
3. Your Estate Planning Checklist
4. Wrap Up
1. The First Line of Defense: How to Avoid U.S. Probate
Before deciding which state’s law should govern your will, start by identifying which assets can pass to your family without going through probate.
Probate is the court-supervised process of validating a will, addressing debts and claims, and distributing assets that are subject to the process. Depending on the state and the estate, probate can take time and involve legal and administrative costs.
A will does not, by itself, avoid probate. It generally tells the court how to distribute assets that are part of the probate estate. The first step is therefore to review how each asset will transfer when its owner dies.
1A. Beneficiary Designations: 401(k), IRA, and Life Insurance
Retirement plans and life insurance policies may allow you to name beneficiaries who receive the proceeds directly, outside the usual probate process.
Review each account or policy separately:
Who is the primary beneficiary?
Who is the contingent beneficiary if the primary beneficiary dies first?
Are the designations still consistent with your wishes?
Do the plan or policy terms impose any special requirements?
What to do: Contact each plan administrator or insurer and confirm the current beneficiary designations and the procedure for paying benefits after death.
1B. POD and TOD: Bank and Brokerage Accounts
Some U.S. bank accounts allow a Payable on Death (POD) designation. Some brokerage accounts allow a Transfer on Death (TOD) designation.
These arrangements can allow assets to pass directly to a named beneficiary rather than through probate. Availability and requirements depend on state law, the financial institution, and the type of account.
What to do: Ask each bank and brokerage firm whether POD or TOD registration is available for your accounts and what documentation the beneficiary would need after your death.
1C. Joint Ownership: Does the Surviving Spouse Automatically Inherit?
A joint account is not necessarily the same as an account that automatically passes to the surviving owner.
The outcome depends on the legal form of ownership, the account agreement, and applicable law. The label “joint account” alone may not answer the question.
Check:
How the account is legally titled
Whether it includes a right of survivorship
What the account agreement says happens when one owner dies
Whether the ownership arrangement has gift-tax or inheritance-tax implications
Adding an adult child as a joint owner is not merely an administrative convenience. Depending on the arrangement and the source of the funds, it may create unintended ownership, gift-tax, or inheritance-tax consequences.
What to do: Ask the financial institution to confirm the account’s legal ownership structure. Consult a qualified tax professional before adding another owner or transferring funds.
1D. Living Trusts: A More Comprehensive Approach?
A revocable living trust can help avoid probate, but only for assets properly transferred into it. Ultimately, whether a trust makes sense depends on your specific assets, family situation, personal goals, and setup costs.
When a trust may make sense: You own U.S. real estate in multiple states, have a complex family structure, or need incapacity planning.
When a trust may be unnecessary: You have a simple estate with no real estate and financial accounts that can pass directly to beneficiaries.
Critical for Japan residents: A trust that is effective for U.S. estate planning may have different tax implications in Japan. The National Tax Agency of Japan explains that gift tax may apply when someone acquires trust beneficial rights without providing adequate consideration.
The actual tax treatment depends on the trust structure and the circumstances of the beneficiaries. Consult a tax professional familiar with U.S.–Japan cross-border taxation before establishing or funding a trust.
Consult professionals familiar with both U.S. estate planning and Japanese tax law before establishing or funding a trust.
Key takeaway: First, identify which assets can pass outside probate through beneficiary designations, POD/TOD arrangements, or existing ownership structures.
My Experience
When I consulted a U.S. estate planning attorney, I learned that a living trust is not always worth the cost. Given our circumstances, including not owning U.S. real estate, the attorney advised us that the benefits might not justify the expense of setting up and maintaining a trust.
2. Why the "State" in Your U.S. Will Still Matters
Even if most of your financial assets are arranged to pass outside probate, a will can cover assets that are overlooked or not covered by beneficiary designations or other transfer arrangements.
The Role of a Will
Without a living trust: If you rely on beneficiary designations and POD/TOD accounts, a will can cover other assets. Forgotten bank accounts, overlooked digital assets, or assets without valid beneficiary arrangements may still have to go through probate.
With a living trust: A pour-over will directs assets left outside the trust into it through your estate. However, those assets may still have to go through probate before they can be transferred to the trust.
Why State Law Still Matters
When assets require probate, the applicable law can affect how your will and estate are handled. For people living in Japan with U.S. assets, determining which law applies can be more complicated.
Real estate: The law of the state where the property is located generally matters.
Other assets: Your domicile—the place considered your permanent home for legal purposes—is an important factor in determining which law governs succession to movable property.
Choice of law in a will: Naming a state's law in your will does not guarantee that it will govern every asset or succession issue.
The key point: You do not need to choose a state on your own. Explain your circumstances and assets to a qualified attorney so that your estate plan can account for the relevant laws.
3. Your Estate Planning Checklist
Start by organizing your information and finding professionals who understand cross-border estates involving the U.S. and Japan.
Step 1. Prepare Your Information
Before your first consultation, prepare a basic inventory of your assets and gather the relevant documents.
Information to Prepare Before Your Consultation
Assets: An overview of your assets in the U.S. and Japan
Bank and brokerage accounts: Account holders and the location of each account
Joint accounts: Legal ownership structure and account terms
Retirement plans: Retirement plans: 401(k), Traditional IRA, and Roth IRA beneficiary designations for each spouse
Real estate: Property locations and registered owners in the U.S. and Japan
Digital assets: Crypto holdings, online financial accounts
Debts and liabilities: Mortgages, personal/business loans, tax liabilities, and credit card debt in both countries
Existing estate planning documents: Wills and trust agreements
Citizenship and residence history: Each spouse’s citizenship and residence history
Previous U.S. residence: The state or states where you previously lived
Estate planning priorities: Your main goals, such as avoiding probate, simplifying estate administration, or facilitating the transfer of assets to family members
*Include your Japanese assets for background information.
For each asset, note whose name it is in, how it is owned, and whether a beneficiary has been designated.
Gather existing documents, where available:
U.S. and Japanese wills
Existing trust documents
Retirement-plan
U.S.Tax return form
You do not need to prepare a complete inventory of everything before your first meeting. The goal is to give the professional enough information to understand your situation and advise you on the next steps.
Step 2. Consult the Right Professionals
Start with either a U.S. estate planning attorney experienced in U.S.–Japan cross-border cases or a tax professional familiar with U.S.–Japan taxation. The order does not matter if the firm or professional can coordinate both legal and tax perspectives.
Explain your family circumstances, assets, and main concerns—such as making it easier for your spouse to manage the estate.
The professionals can help you understand the overall picture, identify the issues that need attention, and refer you to other specialists if necessary.
The goal is to arrive prepared. Consult professionals who understand the U.S.–Japan context, and get a clear picture of the steps that make sense for your family.
Questions to Ask at Your Initial Consultation
At your first meeting, consider asking the following questions:
1. What else information and documents should we prepare to assess our estate and assets?
2. Which states’ laws may be relevant to our assets and estate?
3. If we establish a trust, which state’s law would be appropriate to govern it?
4. What U.S. tax issues should we consider?
5. What Japanese tax issues should we consider?
6. What would your services cover? Would the engagement include preparing wills and trust documents, as well as transferring assets into the trust? What would the estimated costs be?
7. Do you work with attorneys and tax professionals in Japan when coordinating cross-border estate planning?
4.Wrap up
Cross-border legal and tax advice can be costly. Doing some homework beforehand can help you use professional time more efficiently and avoid unnecessary expenses.
Start with the big picture: inventory your assets, review current beneficiary designations, and pinpoint which accounts will pass outside probate.
Where possible, consider consolidating scattered or unused bank and brokerage accounts—fewer accounts make management simpler for you now and reduce legal steps for your heirs later.
Once your information is organized and your goals are clear, you will be well-equipped for a productive, cost-effective consultation with a cross-border specialist.
Aki | Japanese | Former Head of HR in Global Finance
I believe building a long-term life in Japan requires seeing the bigger picture. By understanding how visa, healthcare, taxes, retirement, senior care, inheritance, and family decisions fit together, you can make informed decisions and take calculated risks!
