When a U.S. Citizen and non-U.S. Citizen are married, I always take special care in explaining U.S. Federal Estate Taxes. This is because a non-Citizen spouse receives no special exemption from estate taxes on any inheritance from a Citizen spouse. Compare this to inheritances left to spouses who are U.S. Citizens: these inheritances are entirely exempt from estate tax.
Spouses and advisors should be aware that this is also a lifetime gift tax issue that can crop up in joint tenancy accounts. If a U.S. Citizen has separate property (usually this is property acquired before marriage or through inheritance), and places that property in a joint tenancy account with her non-Citizen spouse, gift tax may be due. Half of the value of the account may be subject to gift tax at rates up to 47%. If the gift goes unreported, the IRS can levy a 25% penalty plus interest in addition to the tax.
Joint tenancy accounts can often create unintended tax and liability consequences. Always consider tax treatment carefully before putting property into joint tenancy.