The Henson Trust in Quebec

580x230-Header-AltroLevy-David_Antoine

Version française aussi disponible.

Earlier this year the Quebec superior court rendered a judgment in the case of Québec (Curateur public) c. A.N. (Succession de), 2014 QCCS 616 (CanLII) where the court clarified the nature of a beneficiary’s right in a testamentary discretionary trust.

In this case, the beneficiary of the testamentary discretionary trust had a serious mental health condition similar to autism, which made him entirely dependent on his mother until her death. The beneficiary’s condition and inability to provide for his own needs made him eligible to receive financial and social assistance payments from the ministère de l’Emploi et de la Solidarité sociale (the “Department”). Read the rest of this entry »

The Benefits of Buying in the Sunbelt

Blog by Shlomi Steve Levy

With winter just around the corner, many Canadians are dreaming about escaping to the U.S. sunbelt.

Luckily, according to BMO Bank of Montreal’s Annual Snowbird Outlook, U.S. vacation homes in popular snowbird destinations like Florida remain affordable compared to the housing prices we saw in 2006.

At the same time, as noted in a recent Financial Post article, snowbirds face a tough rental market. While the American economy has been recovering, many Americans have been renting homes instead of buying them. As a result, rental prices across the U.S. are increasing while the number of rental properties available for Canadian snowbirds is decreasing. Read the rest of this entry »

Cross Border Estate Planning: Gifting to US Resident Children

Blog by Heela Donsky

Canadian parents are no strangers to losing their kids to the US – some may leave Canada to study in the US never to return, while others are recruited by US companies and sponsored by them for immigration purposes.

Once becoming a US person, the child becomes subject to the dreaded US gift and estate tax regime. Click here for a review of these rules. While this may not have an immediate impact on a child whose assets are below the exemption amount of $5.34 million USD, the child may be impacted downstream once he or she has amassed some personal wealth and/or received an inheritance from mom/dad’s Canadian estate. Read the rest of this entry »

Tax Issues for American Corporations: Corporate Inversions

Blog by Shlomi Steve Levy

I recently discussed the choice being made by some U.S. citizens living abroad to renounce their U.S. citizenship in order to avoid being subject to the Foreign Account Tax Compliance Act.

But there is another kind of renunciation that has also become increasingly popular of late: corporate inversions. When a U.S. company buys a company in another, more tax-advantageous country and then designates the foreign jurisdiction of the newly merged company as the legal home of the multinational corporation, the U.S. company has effectively renounced its U.S. citizenship. Read the rest of this entry »

The Benefits of Owning a U.S. Property in a Trust

Blog by Bonnie L. Altro

Holding property titled in personal names is the most common, simplest and least expensive way to go about owning US real estate. Be forewarned, however, that the issues that can arise in such an ownership structure are important ones and the consequences of not planning appropriately can be costly.

Avoiding Probate and Bypassing Guardianship Procedures

Probate is the legal procedure required to transfer legal title to children or beneficiaries upon your death. As per Florida statutes, for example, probate may cost up to approximately 3% of the value of the Florida estate upon the date of death. If a Florida property costs $200,000 USD to purchase, probate fees and expenses translate into approximately $6,000 USD. Of course, it is highly likely that the value of the property will have greatly appreciated at the time of death and that probate expenses would be significantly higher. Read the rest of this entry »

Advisor.ca – Reduce taxes for Canadians with U.S.-resident children



David A. Altro and Jonah Z. Spiegelman recently co-authored an article which appeared on Advisor.ca and is scheduled to appear in the April or May 2014 edition of Advisor’s Edge magazine.

In the article, David and Jonah explain the considerations and opportunities that Canadians should keep front of mind if they have US-resident children who will inherit their estate. Click here to view the article online or scroll down to read an excerpt from the piece. Read the rest of this entry »

What is Mine Might Not be Yours: Estate Planning for Blended Families



Post-divorce, many Canadians are lucky enough to find second relationships, whether it is cohabiting leading to a common law partnership or another trip down the aisle. According to a 2011 census data release by Statistics Canada, blended families (where one or both spouses have children from previous relationships) have become a national norm, representing about one in eight couples’ families with children. This blog takes a closer look at the type of estate planning issues that blended families can face.

As new relationships are formed with the new spouse’s family, estate planning becomes more complicated and steps must be taken to ensure that your intentions to protect your children from the prior marriage and/or for your new spouse to be protected upon your death, and that your estate will ultimately be distributed to the intended beneficiaries. Read the rest of this entry »

Planning for Disabled Beneficiaries in Ontario



Whether you own Cross-Border assets or not, when dealing with the transfer of assets to a disabled beneficiary who is resident in Ontario, special planning may be needed to preserve your disabled beneficiary’s entitlement to certain benefits he or she may be receiving, or may be entitled to receive in future.

The Ontario Disability Support Program (“ODSP”) is a provincial program offering income and employment support to adults with physical and/or mental disabilities.

An eligible applicant must show financial need, which is determined by calculating the assets held by such applicant. A single adult is entitled to hold up to $5,000 worth of assets. If he or she has a spouse (whether married or common-law), the limit rises to $7,500. The limit increases by $500 for each dependent child living with the disabled beneficiary. Read the rest of this entry »

Tax Efficient Estate Planning through Wills



Apart from any other estate planning measures one might choose to implement, there is always a role for a well-planned will. However, the content of those wills depends on whether one or both spouses are US citizens.

Mixed Marriage – One Spouse is a US Citizen

In the case of a mixed marriage, the wills of each spouse will be very different. The reason for this is that different strategies and tools will be employed based on the rules that apply to a given estate.

To illustrate this scenario, take the example of Harry and Wanda. Harry is a US citizen by birth who came to Canada as a child. He married Wanda, a Canadian citizen, and they had three children who did not inherit Harry’s US citizenship. Their combined estate is $10 million, virtually all of which is held in joint names. Read the rest of this entry »

Is a U.S. Revocable Trust Okay for Canadians?



Revocable trusts are a common estate planning tool in the U.S. Also referred to as living trusts and grantor trusts, they provide a method of avoiding costly probate and incapacity proceedings. A well written revocable trust will also include tax and creditor protection planning for future generations. In addition to all of these benefits, the individual setting up the trust remains in control of the trust and trust property during his or her lifetime.

A revocable trust does not provide creditor protection to the grantor, nor does it shield the grantor from U.S. estate tax liability. Rather, it is a powerful and popular tool for U.S. citizens and residents who are below the U.S. estate tax exemption amount to hold their personal residences. The revocable trust is popular among Americans, and rightly so. Read the rest of this entry »