Estate Planning Considerations for the Family Cottage

Blog by Samantha Wu

In the last few years, I had the pleasure of spending many summer weekends at a friend’s family cottage in the beautiful Georgian Bay. Like many retired Canadians, my friend’s parents spend virtually every weekend at their cottage, which they built with their own hands decades ago, and plan almost every holiday and major family event there. As a result, this cottage has significant emotional value to the family and will likely require special consideration and discussion in their estate-planning scheme.

Cottage and vacation home succession is a conflict-ridden area of estate planning as family members may have different personal goals and levels of emotional attachment to the property. The parents may want the cottage to be kept in the family for generations while the children may balk at the high maintenance costs and long drives to the property and would rather sell the property when the parents pass away. Consequently, planning for the family cottage should always start with a family conference with your children and discuss how they may wish to deal with the property in the future. Read the rest of this entry »

DOMA’s Demise – What it Means for Canadian Residents with US Ties



Last week, the US Supreme Court issued an historic and landmark ruling in the case of US v. Windsor. It has been hailed in the media as the demise of the Defense Of Marriage Act (“DOMA”), and celebrated as an extension of more than 1,000 federal benefits to same-sex couples. Read the rest of this entry »

Branch or Subsidiary: Tax Planning for CDN Companies Expanding Operations to the US



Canadian businesses looking to expand operations into the US have many issues to work through at the planning stage, and one important one is how to structure US operations from a tax perspective. This post discusses some of the considerations to keep in mind when deciding between forming a US subsidiary or operating directly in the US through a branch office. This discussion assumes that the Canadian corporate parent will be conducting active business in the US. Read the rest of this entry »

Update: US Senate Votes to Approve Gang of Eight’s US Immigration Reform Bill



Yesterday afternoon the US Senate voted to approve the US Immigration Reform Bill with a final vote of 68-32 in favor of the bill. While some modifications to the bill were made in the Senate, the key provisions for Canadians have remained largely untouched.

These key provisions include Canadian/ Snowbird Tourism, and the US Retiree visa.

Under the Canadian Tourism provision, Canadians who are 55 years old and over may be admitted as visitors to the US for up to 240 days in a rolling 12 month period as long as they also meet the following requirements: Read the rest of this entry »

Watch Out for Tax Rate Changes for Trusts



Back in March, the Canadian government had indicated that they were looking into changing the graduated tax rates applied to testamentary trusts. Trusts have always been a tool for tax and estate planning, and although their use will likely not diminish, this overhaul will drastically alter the way in which these types of trusts are taxed.

On June 3rd, 2013 the Canadian department of Finance formally released documentation proposing changes to the way federal tax would apply to many of the trusts estate planners use on a regular basis. Read the rest of this entry »

The New U.S. Immigration Bill – Impacts to Canadians Spending More Time in the U.S.



In recent weeks, there has been extensive news coverage on the Gang of Eight’s U.S. Immigration reform bill. If the new bill were to pass, U.S. Immigration (USCIS) would extend the amount of days a Canadian can spend in the U.S. from 180 to 240 per year. Many Canadian Snowbirds are delighted that their 6-month sunny winter may be extended to 8-months, pending the bill’s approval – and who could blame them? More sun, more beach, more golf and less snow! However, there may also be a costly tradeoff to this dream lifestyle in the form of double taxation and loss of health care coverage. Read the rest of this entry »

Incapacity Issues when Owning Florida Real Estate



A person is considered incapacitated when they have lost their ability to make important decisions, including those related to their assets or property.

What happens to your Florida property if you become mentally incapacitated? Your loved ones may encounter significant problems when trying to sell or transfer your property.

Under Florida law, the procedure called “guardianship” may be required in order to determine who can legally undertake the duty and responsibility to make decisions regarding an incapacitated person’s property and assets. Read the rest of this entry »

Buying in the U.S. … What About your Canadian Plan?



There is no denying that the United States continues to be a hot spot for many Canadians, and although the housing market crash has begun to recover, prices are still nowhere near where they once were. This coupled with the strength of our Canadian dollar means one thing; it’s a wonderful time to be Canadian. Although, the Canuck in me would say that it is always a great time to be Canadian, now is especially good. That aside, being a Canadian investing in the US real estate market comes with many considerations and decisions. Read the rest of this entry »

“Taxpayer Relief” could be Short-Lived



In my last update, I wrote about the American Taxpayer Relief Act, the eleventh-hour Fiscal Cliff compromise legislation, which narrowly avoided the return of U.S. estate tax for owners of US properties dying with a global estate worth more than $1 million. It was great news, especially for Canadian Snowbirds and real estate investors looking to take advantage of US real estate prices without jeopardizing the Canadian inheritances destined for their children.

But, as we say, the only sure thing in tax law is that the rules will change eventually. True to form, the latest budget proposal from the US government is suggesting changes that could have significant implications, both for Canadian Snowbirds and US citizens living in Canada. In particular, the ‘permanent’ $5 million estate tax exemption amount is back in play, and major changes in the treatment of certain trusts are proposed. Read the rest of this entry »

Update on Gang of Eight’s New US Immigration Reform Bill

Last week a bipartisan group of US Senators known as the “Gang of Eight” unveiled their proposed US immigration reform bill. The 844 page document contains what amounts to an overhaul of almost all aspects of the current US immigration system. It is still to be seen how much of the original bill will make it through the US congressional process. As it stands right now, the bill contains numerous changes of particular interest to Canadians. Read the rest of this entry »