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The concept of domicile is key to determining an individual's liability for US estate tax purposes.
The estate tax is imposed on transfers at death at a rate of 40%. On a statutory basis, if you're domiciled in the US at the time of your death, all of your assets will be subject to estate tax, regardless of their location. On a statutory basis, if you're considered a non-US domiciliary, only assets located in the US will be subject to estate tax.
A US domiciliary may transfer assets with a value up to $10 million, adjusted for changes in the cost of living, without paying any estate taxes. This amount is $12.92 million in 2023 but will be reduced to $5 million adjusted for changes in the cost of living on Jan. 1, 2026.
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