An IRS-issued document known as a Federal Transfer Certificate (FTC) enables the transfer of assets located in the United States to the beneficiaries of a non-resident decedent’s estate. The FTC is necessary if the assets’ worth in the US reaches US$60,000. Here, we outline all you need to know about federal transfer certificates.
What is a Federal Transfer Certificate?
It is possible to transfer assets to beneficiaries without the estate being liable to US estate tax, thanks to a certificate known as the FTC. The estate executor must submit Form 706-NA, Application for Federal Transfer Certificate, to the IRS to acquire an FTC. The following documents must be included with the form:
- A certified copy of the deceased’s death record
- An authenticated duplicate of the will or other probate documents
- A list of all the assets that are in the US
- A valuation of the assets
If all the conditions are met, the IRS will examine the application and issue the FTC. If the deceased was a resident of the US at the time of death, the FTC is not necessary. Additionally, it is unnecessary if the assets’ US worth is less than US$60,000.
When Might You Need a FTC ?
A FTC may be required for the following reasons, among others:
- To exchange or sell equity in a US corporation.
- To sever a banking relationship in the US.
- To transfer property that is located in the US.
- To obtain a life insurance coverage that is situated in the US.
A Federal Transfer Certificate can be processed swiftly but often takes several months. The FTC has a one-year expiration date when it is issued.
Advantages of a Federal Transfer Certificate
The following are some advantages of getting a Federal Transfer Certificate:
- It enables the estate’s executor or administrator to distribute assets to the intended recipients without triggering the US estate tax.
- It might facilitate a quicker probate procedure.
- It can aid in avoiding uncertainty and potential legal issues.
If you are the executor of an estate with assets in the US, you should speak with a lawyer to determine whether an FTC is necessary. It is always best to seek professional advice and ensure you do so with plenty of time.
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