U.S.-Canadian Tax and Estate Planning for Dual Residents

Reconciling U.S. and Canadian Law on Trusts, Deemed Dispositions on Death, Situs Wills, and Wealth Transfers

Note: CPE credit is not offered on this program

Recording of a 90-minute CLE webinar with Q&A

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Conducted on Wednesday, November 18, 2020

Recorded event now available

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Course Materials

This CLE course will provide estate planners with a comprehensive guide to estate planning tax challenges and opportunities for clients who have a tax presence in both the United States and Canada. The panel will discuss the U.S. tax law and treaty provisions that govern tax and fiduciary rules in both Canada and the United States. The webinar will focus on the U.S. tax and other consequences for Canadian clients with U.S. tax presence and U.S. taxpayers with Canadian-based pensions and other assets.

Description

The long Canada-U.S. border and extensive ties between the two countries provide a significant amount of economic migration for citizens of both countries. Many U.S. citizens and permanent residents have property interests in Canada and vice-versa. Estate planning counsel and advisers must be able to identify the tax and wealth transfer planning rules and opportunities specific to U.S. and Canadian citizens with assets and presence in both countries.

The differences between U.S. and Canadian estate and wealth transfer rules present several challenges. Canada does not impose an estate tax. However, Canadian law provides for a "deemed disposition" of all capital assets on the death of a taxpayer. This disposition triggers a tax on all unrecognized gains and losses of Canadian-sourced assets.

While the U.S.-Canada tax treaty allows for reciprocal credits for U.S. estate tax and Canadian taxes, estate planners must reconcile the differences between the two countries' tax regimes and proactively minimize the tax impact of wealth transfers. Tax advisers must thoroughly grasp treaty provisions, identify whether a client needs separate estate documents specific to each country, and recognize the U.S. and foreign income and estate/gift tax implications of transactions.

Listen as our expert panel provides guidance on how to plan the estates of clients with U.S. and Canadian tax presence, including interests in business entities, real estate, and financial accounts. The panel will cover the legal and tax considerations when planning for the disposition of each type of asset.

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Outline

  1. U.S. estate tax regime
  2. Canadian "deemed disposition" rules
  3. Tax treaty credit provisions
  4. U.S. and Canadian tax treatment of trusts
  5. Filing and reporting deadlines and timelines to consider

Benefits

The panel will review these and other essential issues:

  • When is it appropriate for clients to have separate estate plan documents specific to the U.S. and Canada?
  • How does the "deemed disposition" rule work to create a recognition event upon death or transfer of assets deemed to be Canadian-sourced?
  • What are the tax treaty provisions to ameliorate dual taxation issues in estates and post-mortem tax events?
  • How to avoid inadvertent gift tax triggering events on spousal transfers
  • Options for transferring estate assets outside of an estate in Canada

Faculty

Altro, David
David A. Altro
Managing Partner
Altro

Mr. Altro has been practicing law for over 30 years in Canada and the US and divides his time between the Toronto and...  |  Read More

Thompson, Bradley
Bradley R. Thompson
Partner
Altro

Mr. Thompson is a leading cross-border Canada/US tax lawyer. Educated in both countries and qualified as a lawyer in...  |  Read More

Wu, Samantha
Samantha Y.F. Wu
Partner
Altro

Ms. Wu's practice focuses on cross border estate planning and real estate.

 |  Read More

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