Ideally, estate plans should be made in the jurisdiction where one’s assets are located. Some Americans moving to Canada plan to retain certain American assets, such as a home in the Sunbelt. Such clients should therefore have an American estate plan that covers American assets retained post-move and a Canadian estate plan for all assets that will be held in Canada. It is also prudent to create power of attorney documents for all jurisdictions in which one plans to retain assets and spend time.
It is likely that Americans moving to Canada have already drawn up an American will, a US revocable trust, and/or incapacity documents, such as powers of attorney for property and health care. Canadian estate planning documents such as a will and/or trust, as well as incapacity documents such as powers of attorney for property and health care, must also be drafted.
We assist our clients by reviewing their estate planning needs and determining the optimal course of action based on their assets; for example, it may be clear that an American moving to Canada should prepare a cross-border trust or alter ego trust instead of a US-situs will to avoid or minimize state-levied probate fees and the time-consuming probate process. Establishing pre-entry dynasty trusts and/or charitable trusts may also be helpful for Americans moving to Canada.
Preparing comprehensive cross-border estate plans provides peace of mind. Establishing power of attorney documents on both sides of the border guarantees that the substitute decision-maker of one’s choice will be able to act in both the US and Canada with respect to not only property, but health care decisions too. It is also important that one’s estate plan considers domestic laws on both sides of the border to ensure the proper distribution of assets to heirs.
Not only can a cross-border estate plan provide peace of mind in this manner, but it can save money in terms of probate fees (as mentioned) and by considering the US estate and gift tax regime.