Inheritance and Estates Between Poland and the USA

Introduction

Poles living in the USA often inherit from relatives in Poland (and vice versa). The matter is complicated – different inheritance laws, different taxes, and many formalities.

Which Law Applies

• Real Estate (house, plot): law of the country where the property is located
• Movable Property and Bank Accounts: law of the last place of residence of the deceased
• Poland: Civil Code + EU Regulation 650/2012 (Brussels IV) if the deceased lived in the EU
• USA: law of the state where the deceased lived (each state is different)

Inheritance from a Relative in Poland (You Live in the USA)

Step 1: Learn About the Death

• Family in PL contacts you
• Notary or court notifies about the proceedings

Step 2: Death Certificate

• Extract from the Polish USC (Civil Registry Office)
• Apostille and translation into English (for matters in the USA)

Step 3: Declaration of Inheritance

• Notarial – all heirs agree; faster (1-2 weeks); cost 200-500 PLN
• Court – in case of dispute or incomplete family; 3-12 months; cost 100 PLN + lawyer
• From abroad: notarial power of attorney with apostille (see power of attorney) for a person in PL

Step 4: Entry in the Land and Mortgage Register (if property)

• Application to the land registry court
• Fee 200 PLN + 1/2 of the notarial fee for the power of attorney

Step 5: Inheritance Tax in PL

• Group I (spouse, children, parents, siblings): full exemption if reported within 6 months (SD-Z2)
• Group II (grandparents, grandchildren, nephews): 7-12% of the value
• Group III (others): 12-20%
• Deadline: 6 months from the declaration of inheritance

Step 6: Sale or Transfer

• Sale of property in PL – 19% PIT on income if sold within 5 years of acquisition
• Transfer to the USA: transfer money via Wise; then report IRS Form 3520 if received >100k USD/year from a foreign person

Inheritance from a Relative in the USA (You Live in PL)

Step 1: Probate

• State court (probate court) resolves the inheritance
• Executor manages the process
• Without a will: intestacy laws of the state
• Time: 6-18 months
• With a trust: probate is avoided (see trust in the USA)

Step 2: Federal Estate Tax

• Exemption 2026: 13.99 million USD per person (relief from TCJA)
• Above – rate 18-40%
• Most Poles will not exceed the threshold
• State estate tax – some states additionally (NY 5.93 million USD, NJ none since 2018, MA 2 million USD)

Step 3: Inheritance Tax (State)

• 6 states: IA, KY, MD, NE, NJ, PA – tax on the heir (not on the estate)
• Rates 1-18% depending on kinship
• Spouses exempt; distant relatives pay the most

Step 4: Reporting in Poland

• Foreign inheritance = EXEMPT in PL if reported within 6 months (SD-Z2 for family group I)
• Submit to the Polish US (tax office)
• Translation of the death certificate and probate ruling is necessary

Will – Where to Draft

• In Poland: notarial (safest), handwritten, oral (rare)
• In the USA: in the presence of 2 witnesses, signed; preferably notarized
• If assets in both countries: two wills – one for PL, one for the USA
• Specify the law of choice: "I choose Polish/American law for inheritance" (Brussels IV)

Trust in the USA – Avoids Probate

• Living Trust – assets bypass probate court (see trust in the USA)
• Beneficiaries receive immediately
• No public disclosure (probate is public)
• Cost of establishment: 1,500-3,500 USD with a lawyer

Community Property (PL) vs USA

• Poland: statutory community of spouses
• USA: 9 states "community property" (CA, AZ, TX, NM, NV, WA, ID, LA, WI); the rest "separate property"
• Polish spouse inherits 1/2 of the community property + share in the inheritance

Renunciation of Inheritance (with Debts)

• The inheritance may include debts (credit, mortgage)
• Poland: 6 months to renounce (notarial declaration); by default "with the benefit of inventory" (you are only liable up to the value of the inheritance) if you do not renounce
• USA: "disclaimer" – within 9 months of death; varies by state
• Consult a lawyer before making a decision

Common Mistakes

• Inheritance informally accepted – automatic acquisition of inheritance under Polish law (with debts!)
• Failure to report SD-Z2 within 6 months – loss of tax exemption
• Sale of property within 5 years without planning – 19% PIT
• No will – intestacy distributes according to default rules, not according to wishes
• No trust in the USA – probate extends payout by 6-18 months
• Failure to report IRS Form 3520 (gift/inheritance >100k USD from foreign person) – penalties of 25,000 USD+
• Family conflicts – hire a mediator before a lawyer