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Estate administration: Dealing with a cross-border estate

There are some Canadians who own property stateside. Many snowbirds purchase property in the United States and when British Columbia residents who own such a property die, estate administration could get dicey. Executors of wills could find themselves in a pickle if they aren't familiar with cross-border tax laws and/or regulations regarding reporting.

The federal estate tax on a U.S. estate applies to worldwide assets of any estate worth in excess of $5.34 million. The same is not true for Canadian estates. There are different rules in the States regarding probate as well, which could be more costly and proceed more slowly than in Canada. Executors must wait for a court day in the United States before anything can be done with the will. One other significant difference between the two countries when it comes to estate administration is that tax payments due to the government in the United States come from the estate; however, if the executor doesn't file it, he or she could be held liable.

Then there are issues within issues such as whether the testator held dual citizenship between Canada and the United States or whether he or she had children that are U.S. citizens. Also, many individual states require court-supervised estate administration. In Canada, once probate is granted, an executor is free to administer the will. There is a lot more red tape involved south of the border.

Estate administration can be complex, especially when some assets are located in the United States. Getting the advice of a British Columbia lawyer who has wills and estate planning experience can be invaluable in these circumstances. A lawyer will guide his or her client on involved issues like cross-border assets and probate.

Source: advisor.ca, "How to deal with a cross-border estate", James Dolan, Accessed on Oct. 21, 2017

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