Things to Consider for Cross Border Estate Planning
It is not unusual for an individual to have assets in more than one province or country. But whether you have a cabin in British Columbia or a winter property in California, it can mean that your estate planning needs are a little more complicated.
Our Edmonton probates and wills lawyers may be able to advise you of more things to consider for cross border estate planning.
Do You Need Multiple Wills?
Planning a will in each jurisdiction where you own assets can greatly simplify matters for your executor or executors after you are gone, but there is a risk associated with this strategy if your wills are not prepared properly. The best way to execute multiple wills is to have the lawyers preparing them work together to ensure that one will does not revoke the other. This way, the wills may work together to effect your estate plan on both sides of the border.
When prepared properly, having a will in each jurisdiction where you own property can be a practical estate planning solution that results in an executor needing to deal only with courts and assets in their own state or province.
Tax Considerations
Different countries have different tax rules. The rules of the jurisdiction in which you intend to own assets should be considered, ideally before you acquire the asset.
One major difference between the tax regimes in the United States and Canada is the US gift and estate tax (often known as estate tax or death tax). This is a transfer tax based on the value of an estate when it is transferred to a beneficiary.
Canada does not have a similar tax on the transfer of estate assets upon death, but it does have deemed disposition rules whereby the deceased person is deemed to have sold all of their assets in the year of their death, and income tax is calculated accordingly.
If you reside in Canada and are not a US citizen, the US estate tax will only be relevant to assets that are situated in the US, which may include:
- real property located in the US
- tangible personal property (usually the contents of real property and vehicles)
- shares of US stocks
- debt of a US person or company
Other countries have their own specialized tax rules that may affect your assets upon death.
Strategies for Cross Border Estate Planning
A number of strategies can be used to minimize tax consequences, including owning foreign-based assets through a corporation, partnership or trust. The best option for you will depend on a number of factors, including:
- the value of your assets in the foreign jurisdiction
- the value of your total worldwide assets
- the jurisdiction(s) in which you own assets and the applicable tax rules
- your citizenship and the country in which you reside
- where your potential beneficiaries are located
Regardless of which strategy is best for you, estate planning should be put in place from the time you acquire an asset.
Contact our Edmonton Probates and Wills Lawyers Today For a Consultation
Our team of Edmonton probates and wills lawyers would be happy to talk through your questions as well as the specifics of your cross border estate planning, and do our best to help you move forward with informed decisions. Contact us today to schedule a consultation.
*The information in this article is intended as an introductory overview of cross border estate planning, and does not constitute legal advice. For legal advice, please speak with a lawyer.