A specialist qualification that offers you a detailed insight into the different issues that arise when dealing with cross-border estate planning and succession worldwide. The team at O’Sullivan Estate Lawyers LLP is equipped with the experience and legal understanding to comprehensively review your situation and, in conjunction with U.S. tax and legal professionals, provide estate planning solutions that will minimize tax as well as exposure to adverse cross-border issues. Accordingly, if the expat grantor moves to Germany with her family, the children-beneficiaries will be German residents and the intended consequences of the grantor trust will conflict with German gift and inheritance tax laws. That said, the U.S. federal estate tax regime may be described as in a state of flux, with some policymakers calling for its complete abolition, and others seeking to return the exemptions to much low-er levels. Cross-Border Estate Planning You may need cross-border estate planning if you: Own a Canadian company with a U.S. subsidiary or that earns a significant amount of income in the U.S. Want to retire in the U.S. or spend a significant amount of time in the U.S. in retirement Ask us a question now! Concepts of citizenship, residency and domicile have crucial significance in determining the exposure of a person to the transfer tax regime of any particular country. Similar results may occur in France, which has a relatively new tax regime applicable to any trust with French situs assets or a French domiciled settlor or beneficiary. Families with a mix of citizenships and/or immigration statuses face unique challenges. With offices in the United States and Canada, we help clients with cross-border law matters and legal concerns. KeatsConnelly can assist in your cross border tax planning needs. Info Here > US ESTATE AND GIFT PLANNING. TD Bank Tower Toronto-Dominion Centre66 Wellington Street West, Suite 3430P.O. Cheyenne received her J.D. Tax filing requirements as well as health insurance and risk management needs are other key cross border considerations that we analyze. A traditional will provides written directions on how the individual (the “testator” of the will) wishes to distribute her assets upon her death. Cross-Border legal issues? Trusts are a primary method of devising a scheme of distribution that may allow some or all of the decedent’s assets to bypass probate, and (sometimes) to defer or avoid estate taxation. For example, the situs rules discussed earlier illustrate that investments in U.S. publicly traded fixed-income (bonds) will not subject the foreign investor to estate taxes (nor income taxes). Permanent resident (green card) status would in most (but not necessarily all) cases establish domicile. While U.S. citizens and residents are subject to federal estate tax on worldwide assets, the non-resident alien’s estate is subject to federal estate tax only on U.S. situs assets, consequently “situs” has an important role to play in estate planning for many cross-border families. Avoid Serious Cross-Border Tax Issues with Effective Estate Planning. We obtain this additional information only directly from you, not from any third-party service. Registration: Registration fee is $720.00 plus GST $36.00 totalling $756.00 covering your access to the live webinar and electronic materials. Visit Creative Planning, Join Our Mailing List And Get Our Latest News, Thun Financial Advisors, a division of Creative Planning, 2018 Guide to International Estate Planning for Cross-Border Families, Thun Financial’s research article on 529 Plans for ex-pats, A Brief General Overview of Contrasting International Tax Regimes, Concepts of Citizenship, Residency and Domicile, Understanding the Role of Situs in International Transfer Taxation, The Interplay of Tax Treaties and Foreign Tax Credits, Examples of Tools that May Not Travel Well, Estate Planning for Families that Include a Non-U.S. Citizen Spouse, Non-U.S. In contrast, common law systems tend to have more concise constitutions and statutes and afford more discretion and interpretive power to the courts when applying the laws to the particular facts and circumstances of particular cases. They also provide the donor with control over the use of the gifted proceeds and flexibility regarding the designation of account beneficiaries. Estate planning for France and the UK Cross-border estate planning is just as complex or more so. Cross Border Planning provides a coordinated solution for those who have financial affairs in more than one land. By Estates & Trusts Team, at McInnes Cooper. While the foreign investor in the U.S. may become very aware of the federal (and possibly state) income tax regime, she might be well served by learning the particulars of the federal (and possibly state) estate tax regimes that could impact the distribution of those investments to her heirs. Situs generally: The general situs rule is that tangible assets physically located in the U.S. are subject to federal estate tax, but the situs rules for intangible property are somewhat involved and complicated. Cheyenne received her J.D. Currently, the vast majority of Americans, at home or abroad, have little concern for U.S. federal estate taxes. Indirect ownership can be a particularly effective means for non-U.S. persons to own U.S. real property, too. Caution when moving overseas with trust structures: If your estate plan includes trusts, it is particularly dangerous to move overseas with your old domestic estate plan in tow as it may not travel well at all. This service is ideal for clients who have cross-border interests that require protection, or estate matters that require administration. These treaties are far from uniform, and some treaties eliminate double taxation better than others. Introduction Few countries enjoy the close, friendly relationship enjoyed by Canada and the United States. (For more information, please see the relevant portions of the U.S. Tax Code including 26 U.S. Code § 2014 “Credit for foreign death taxes”). Cross-Border Successions within the European States & Estate Planning for Canadians Other experts suggest one “geographic will,” which would incorporate the laws of the relevant jurisdictions involved in the distribution of the testator’s assets. Generally, more recently ratified U.S. estate tax treaties follow the “new” rules based upon a domicile-based approach. Recently, Cirone's practice has seen an increase in inquiries in the following areas: Planning and preparation of cross-border Wills ("CB Wills") for U.S. citizens living in Canada. For estates larger than the lifetime exclusion limit, alternative estate planning strategies may be required, two of which are discussed below. SCOPE OF OUTLINE More and more of the clients who come to us for estate planning bring issues that involve other countries. We do not pay third parties to provide us with lists of personal data. No matter how complex your needs may be, our Toronto Estate Lawyers are adept at identifying and implementing out-of-the-box solutions that deliver excellent results. Estate Planning Advisor. Correctly tailoring that cross-border estate plan will require legal and tax experts with a deeper understanding of the relevant estate/ succession/gift/generation-skipping transfer (collectively As with any estate plan, the specific family’s needs should be taken into account. Here are the general situs guidelines for non-resident aliens and their U.S. estate tax exposure: The U.S. situs rules are particularly instructive for expat families that include non-U.S. persons (e.g., an American abroad married to a foreign spouse), or to non-U.S. persons with investments in the United States. As a result, a major part of her practice is related to cross border U.S. – Canada transactions and estate planning, including estate, gift, and generation skipping tax issues. However, families with multiple nationalities are in particular need of a cross-border estate plan … This is analogous to the intestate succession rules followed in common law when the decedent has otherwise failed to legally direct the distribution of wealth upon death. Portability of unused exemption to surviving spouse: Beyond that, if the first-to-die spouse’s exemption amount is not fully utilized, an election on that estate tax return will preserve the remaining unused exemption amount for the second-to-die spouse. Access a 40% discount on the cost of purchasing European Cross-Border Estate Planning textbook, written by Timothy Lyons (Sweet & Maxwell). What do … Accordingly, and perhaps ironically, non-Americans are more likely to trigger federal transfer tax liability than a similarly situated U.S. citizen. Additionally, in Canada, which shares the British common law heritage, a special capital gains tax will be periodically assessed on trusts holding Canadian real property. Part of the Raymond James Financial family of companies, Raymond James (USA) Ltd., or RJLU, is a Canadian based US registered investment firm offering integrated cross-border wealth management solutions to Americans living in Canada and Canadians living in the US.As RJLU advisors, we are licensed and regulated in both Canada and the US, … Now imagine that typical affluent American family in a modern, global setting: A husband that is a United States citizen living in Germany, married to a citizen of France (a “non-U.S. person”), with two children from a prior marriage living in the United States and one from the present marriage living with her parents in Germany. Read Article. U.S. expats need to be aware that standard U.S. estate planning techniques will likely fail to protect wealth in cross-border situations and may even produce unintended, counter-productive results. Thun Financial Advisors is a Creative Planning, LLC company. For example, if you are a Canadian who owns property in the US but are not a US citizen or resident, the US will tax your estate 40% of the fair value of the property. Will Todd is an independent lawyer who provides cross-border tax and estate planning advice to individuals and families from his downtown Vancouver office. Since a non-resident alien is generally not subject to taxation by the United In common law jurisdictions, it is usually the estate of the decedent that is taxed prior to distribution of wealth to chosen heirs. Except in response to direct instructions from you (e.g., a client asks us to send a brokerage tax record to their accountant), we do not share your personal data with third parties. Cardinal Point’s team of advisors specialize in cross-border planning, transition of assets, and ongoing oversight of investment portfolios. CROSS BORDER TRUST AND ESTATE PLANNING. Our small size and our proximity to the capital of Europe, Brussels Belgium, enable us to deliver timely and personalized service to manage these challenging cross border issues.Contact us today to learn more about how Cross Border Planning can streamline and … Cross-Border Estate Planning Articles. More concerning, it will also subject the foreign, non-resident to a more complicated tax regime – the Foreign Investment in Real Property Tax Act (FIRPTA) – which creates a myriad of tax headaches that are well beyond the scope of this article. However, in some cases, we may seek and collect data about individuals through publicly available third-party sources, such as social media, news, or company websites. Cross-Border Estate Planning. Connections between Canadians and the U.S. have never been as numerous or transparent as they are now: many Canadians own U.S. property, have U.S. spouses or partners, and have … Despite its importance, cross-portfolio investment optimization is something that is seldom discussed in a meaningful way, much less implemented effectively. That the testator be legally competent and not under undue influence; That the will describe the property to be dis-tributed; That the will be witnessed by the requisite number of witnesses. If the grantor and his beneficiaries remain in Germany over ten years, the tax relief offered by the U.S.-Germany Estate and Gift Tax Treaty phases out and distributions from the trust could be exposed to the highest German transfer tax rate of fifty percent. Be wary of trust structures when moving abroad If your estate plan includes trusts, we do not recommend moving abroad with your old domestic estate … The treaty rules establish taxation priority by first determining which jurisdiction was the domicile of the decedent. Assisting a wealthy Southeast Asian individual with cross border trust and estate planning of his substantial listed stakes on the KLSE and UK real estate interests. The magnitude of unintended tax consequences might intensify over time. More sophisticated estate planning tools become necessary at more modest estate levels whenever the assets of a non-U.S. person are concerned. We work with families and individuals from a broad range of backgrounds and circumstances, creating customized plans to meet the unique needs of each client. However, while U.S. expats are free to open and fund 529 college savings accounts, they must be aware of the local country rules in their country of residence regarding the gains that will eventually accumulate within these accounts. Will provides tax and estate planning solutions for Canadian-resident U.S. citizens and their family members and Canadians owning or acquiring U.S. real property, among others with exposure to Canadian and US taxation. • Providing confidential consultations to potential clients or others who are considering doing business with us; Estate planning can become complicated by the different tax, estate planning and estate administration laws and rules between Canada and the U.S. Thun Financial is also committed to safeguarding and protecting the privacy of all visitors to its website or interested persons whom communicate personal and financial information with Thun Financial, whether potential clients or otherwise. We specialize in U.S. & Canadian immigration financial strategy. If you live a cross border lifestyle, we highly recommend speaking to our cross border tax experts to ensure you have a well structured estate plan to eliminate any future tax issues. Solutions can even be modified with sophisticated ownership structuring (e.g., the wife might own securities through a trust or offshore company), all designed with the assistance of legal and tax advice from competent consultants in the relevant jurisdictions. A client may be subject to U.S. estate tax and married to a non-citizen spouse; a U.S. Cross-border families and multinational asset portfolios add substantial complexity to the financial planning needs of global families. However, the United States has not extended the investor-friendly income and estate tax rules to foreign investment in U.S. real estate. This article does not constitute legal or tax advice, nor a solicitation to obtain clients to provide legal or tax advice. Correctly tailoring that cross-border estate plan will require legal and tax experts with a deeper understanding of the relevant estate/succession/gift/generation-skipping transfer (collectively referred to herein as “transfer”) tax laws in each of the relevant countries that may factor in the distribution of property prior to and upon death. cROSS BORDER TRUSTS. Meeting All Aspects of Your Cross-Border Experience Our collaborative team approach provides cross-border and domestic strategies for tax optimization, corporate structure, estate and trust planning in multiple countries, and cross-border healthcare planning. The QDOT can be created by the will of the decedent or the QDOT can be elected within 27 months after the decedent’s death by either the surviving spouse or the executor of the decedent’s estate. The Cross-Border Estates Global Special Interest Group addresses the domain of estate planning and the administration of estates/successions across international borders, with a focus on reconciling divergent inheritance rules between civil code jurisdictions, common law jurisdictions, and other codes of law. If an individual and his or her family have ties across the border, either through residency, citizenship, domicile or the location of an asset, it is important to obtain legal advice from experienced lawyers who can assist in identifying critical issues and preparing a coordinated and effective cross-border estate plan. Accordingly, a gifting strategy can be implemented to shift non-U.S. situs assets from the citizen spouse to the non-citizen spouse over time, thereby shrinking the taxable estate of the citizen spouse. Michael Kennedy provides representation and counseling related to all facets of estate planning and business enterprise throughout the United States. Webinar: Cross-Border Estate Planning. Types of data collected by Thun Financial Succession and forced heirship dominate civil law and other regimes: Civil law countries tend to follow a succession regime, also known as forced (or Napoleonic) heirship. For instance, a special trust to benefit your family members may in certain cases minimize U.S. estate tax and protect your wealth. For instance, all or part of your estate may be or become subject to U.S. estate tax if: There is a special tax treaty between Canada and the U.S. that provides various types of relief from double taxation on death. The applicability of an estate tax treaty between the U.S. and the country of residence, domicile and/or citizenship; The availability of tax credits in the relevant jurisdictions where overlapping taxes are levied. At the Toronto, Ontario, law firm of O’Sullivan Estate Lawyers LLP, we provide tailored solutions to clients who have a U.S. affiliation and cross-border estate planning issues working with U.S. estate planning advisors. Citizenship/domicile/residency, location and character of investments (situs of assets), applicable tax treaties and/or the availability of foreign tax credits, and the existing or proposed estate plan are some of the critical variables that must be factored into a financial plan and in the design of a comprehensive portfolio that is optimized for income as well as transfer tax efficiency. U.S. taxation – “exceptional” in reach and scope: America is “special” in many ways, but few aspects of American “exceptionalism” are as tangible as the way the U.S. Treasury levies taxes on its citizens who leave its borders to live and work abroad. If the investor resides in 1 of the 16 estate tax treaty countries, there may be significant relief, however. Estateslawyertoronto.ca skilled lawyers can help with all cross-border estate family and estate litigation services with experience. Cross-border estate planning lawyers Having a lawyer with experience in both Canadian and US estate planning is key. Determining which country is the decedent/donor’s domicile for transfer tax purposes; Determining in which country the property is deemed to be located. Does your estate plan have a U.S. connection? Within the cross-border context, individuals would be wise to seek legal counsel with a specialized focus on estate planning in the relevant jurisdictions. can also help with transfer taxes. The Tyra Law Firm, LLC Helping our neighbors plan for their family’s future and avoid painful issues. As a registered adviser, Thun Financial guards its client’s personal and financial information in the strictest of confidence. Terry Ritchie featured in The Insurance & Investment Journal article, Managing Cross-Border Clients. Conversely, the situs rules of the foreign jurisdiction will apply to that portion of the U.S. person’s estate that is deemed to have situs in that foreign jurisdiction. A new team of expert trusted advisors is going to be required. Therefore, it is quite possible that the expat individual will find that gifting through a 529 plan could create detrimental tax consequences, as the donor may potentially incur tax liability on any investment gains in the portfolio going forward (recognized or unrecognized gains, depending on the local tax rules). From an income tax perspective, direct ownership of investment real estate will subject the foreign, non-resident investor to preparing the annual federal income tax (U.S. 1040-NR) and state income tax return. Additionally, the countries may provide secondary credits where both countries impose tax because their individual situs laws determine that the (FATCA) create income tax problems that vastly outweigh any estate planning benefits. While a country-by-country discussion of the situs rules is beyond the scope of this article, many jurisdictions employ situs rules similar to the U.S. He adds, “Maybe have it in a cross-border trust or a partnership, or a vehicle that doesn’t die.” The goal is to bring the value of the estate below the amount that will trigger federal and state estate tax, and to avoid probate. Certain transfer tax treaties provide spousal relief that may lessen the need for a QDOT, and, if the treaty benefit is claimed, the QDOT may no longer be utilized. Your Rights Regarding Your Personal Data For that reason, standard traditional estate planning tools will not work in those situations. Recent estate tax law changes have significantly increased the federal estate and gift tax lifetime exclusion amount to very high thresholds: Accordingly, with a $22.4 million-per-couple exemption, most Americans feel that the estate tax is something that can be ignored. Some experts on the subject of international estate planning suggest multiple “situs” wills, with each will governing the distribution of property in the country for which the will is executed. Call us at 416-847-1859 ... Planning ahead for this transfer of property can eliminate lengthy procedures and ensure that your assets are protected from domestic and foreign estate … Who Can Benefit Those clients who benefit from our cross-border financial, tax and estate planning and investment management oversight expertise include: The domiciliary country will then provide foreign transfer tax credits for taxes paid to the non-domiciliary country. Cheyenne Reese , Principal, Legacy Tax + Trust Lawyers, Vancouver, BC. Cross Border Estate Planning for Canadians. An expat should understand the particular definitions and requirements under the laws of the country(ies) in which they live, work, or own property. The U.S. husband’s portfolios might be over-weighted in certain asset classes including U.S. stocks or ETFs, while his wife’s portfolio might be overweight bonds, international equities, or non-U.S. ETFs). Estate planning for cross-border families can get a bit tricky or complicated when family structure includes one U.S. citizen and one non-U.S. citizen. In the USA, typically no taxes are directly imposed on the buyer of real estate. This matter involved giving advice to a non-UK resident and non-UK domiciled individual and his family to ensure a coordinated succession planning strategy across two jurisdictions. Recently, Cirone's practice has seen an increase in inquiries in the following areas: Planning and preparation of cross-border Wills ("CB Wills") for U.S. citizens living in Canada. While the global income taxation of U.S. citizens gets far greater attention, U.S. transfer taxes apply no matter where a U.S. citizen lives, gifts property, or dies. The border between the U.S. and Mexico is nearly 1,900 miles long. The propriety or effectiveness of the geographic will is likely to depend on the particular laws of the relevant jurisdictions and the particular expertise of the legal advice that went into the design and execution of the will. We are committed to protecting and respecting your privacy. Domicile is acquired by living in a jurisdiction without the present intention of leaving at some later time. Accordingly, the QDOT can be a critical wealth planning tool for deferring the estate tax until distribution to eventual U.S. citizen heirs when the surviving spouse is a non-U.S. citizen. If the decedent fails to construct a legally valid will (a situation known as intestacy), trust or other will-substitute scheme (e.g., joint titling all property), the state intestacy laws will direct the distribution of the decedent’s property. When engaging in cross border financial planning, we determine a client’s cross border tax, estate, investment, retirement, and immigration planning needs in light of their particular goals and objectives. Persons Investing in the United States. Transfers during lifetime to the non-U.S. citizen spouse can reduce the U.S. citizen spouse’s estate, but the annual marital gift tax exclusion is reduced from unlimited to $155,000 (2019). Additionally, estate tax may be owed on certain assets transferred to others within a fixed time period before death, or where the decedent retained an interest in the property. Frequently, it will make sense to own U.S. Real Estate through an offshore corporate or trust structure (for a foreign, non-resident investor only, as U.S. persons should certainly avoid offshore corporate or trust structures) to avoid U.S. estate tax, and possibly reduce U.S. income tax as well. 529s) to reduce your tax-able estate: Lifetime gifting strategies are a common method for reducing a taxable estate in the United States. KeatsConnelly can assist in your cross border tax planning needs. Alternative college savings or generational gifting strategies (including having U.S. based relatives open the 529 account) may work better for expats. Perhaps one of the more dangerous routes that an expat family could take would be to rely upon the estate planning that was done before leaving the United States. INTRODUCTION A. Non-resident alien taxation 1. Box 68 Toronto, ON M5K 1E7, Toll Free: 888-365-6235Phone: 416-363-3336Fax: 416-363-9570, U.S.-Canada Cross-Border Will and Estate Planning, Cross-Border and Multijurisdictional Estate Matters, Contact Us – Estate and Trust Administration, Multijurisdictional Estate Administration, Multijurisdictional and Cross-Border Will and Estate Planning, Cross-border incapacity planning including use of a power of attorney in U.S. jurisdictions, Cross-border will planning and separate situs wills, Cross-border trust planning including Canadian trusts to hold U.S. situs asset. Cross Border Living and Tax Planning. 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. Learn More. Speak to one of our cross-border experts: https://bit.ly/2GHt3Gg # BlevinsFranks # WealthManagement # TaxPlanning # … There are a number of strategies that can help minimize the amount of tax that must be paid by the estate following death. The crossborder family may have alternative solutions for providing for the heirs and for the maintenance of the noncitizen spouse that are more practical or even more tax efficient (such as a lifetime gifting strategy, discussed above). Estate plan may no longer protects wealth as intended marrying a foreigner version! No legal validity in a succession regime may accumulate more than one land terry Ritchie in... Countries, there is no bright-line test for non citizens to establish domicile for estates larger the. Lawyers, Vancouver, BC information only directly from you, not from any third-party service! ” button.... 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