Cross Border Tax & Estate Planning

Canada and the U.S. have two distinct tax and legal systems. When a Canadian owns assets in the U.S. he is now subject to a combination of laws on both sides of the border. Without proper planning, a Canadian may encounter a host of legal issues during his lifetime or after he passes away. Our professionals analyze the facts specific to each client’s situation in order to recommend and implement a customized tax and estate plan that ensures a smooth transfer of assets to the next generation in a tax effective way. One of the key questions that we address is how a client should take title of his U.S. residence in Florida, Arizona, Vermont, California, Hawaii, etc. Many clients currently have the property in their name personally which may expose their family to unwanted and costly problems upon their passing. Another important issue that can create a lot of confusion and stress for our clients is U.S. estate tax. A Canadian may be subject to up to 40% of U.S. estate tax on his U.S. assets depending when he passes away and how much his U.S. assets / worldwide assets are worth at the time of death. Our firm specializes in calculating the U.S. tax exposure, providing recommendations and implementing a cross border tax plan to defer, reduce or eliminate the tax burden for the client.

We have developed particular expertise in the following areas:

  • Creation of a Cross Border TrustSM to avoid estate planning issues such as probate and incapacity
  • Settling U.S. estates
  • Guardianship procedures
  • Minimizing capital gains tax upon sale of U.S. property
  • Using Qualified Domestic Trusts (“QDOT”) to defer U.S. estate tax
  • Creating Non Recourse Mortgages to eliminate U.S. estate tax
  • Protection for beneficiaries against creditors and divorce
  • Cross Border Dynasty Trusts
  • Preparation of U.S. estate tax return (form 706NA)
  • Irrevocable Life Insurance Trusts
  • Avoiding double taxation upon sale or death
  • Gifting strategies
  • Creating corporate structures for setting up a business in the U.S. (LLCs, C Corp, S Corp, etc.)
  • Preparation of wills and/or revocable trusts
  • Drafting, funding and administering “Irrevocable Life Insurance Trusts,” including preparation of “Crummey” notices, when appropriate
  • Creation of multi-generational irrevocable “Dynasty Trusts” or “Intentionally Defective Grantor Trusts” (“IDGTs”)
  • Incorporating “Qualified Domestic Trusts” for appropriate cases involving clients with non-citizen spouses
  • Preparation of incapacity planning documents including Durable Powers of Attorney, Designations of Health Care Surrogates and Living Wills/Declarations


Different Ownership Strategies for Canadians Owning U.S. Property

  • In one’s name alone
  • Jointly with spouse
  • Canadian corporation
  • Limited partnership
  • Canadian irrevocable family discretionary trust
  • Cross Border TrustSM
  • Revocable trust
  • Add kids on title

David A. Altro’s book Owning U.S. Property the Canadian Way, Third Edition, provides an in depth look at the pros and cons of each ownership structure. Contactus to order a copy or to setup a consultation.

David A. Altro in a recent webinar on Cross Border Planning. David was asked to speak for a team of cross border bankers for one of North America’s leading financial institutions:

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