Estate planning can seem pretty straightforward for any Canadian resident, but many circumstances can complicate that process. One instance, in particular, is when a Canadian parent’s child decides to move to the US and become a resident there instead.
It can seem like a harmless move to some, perhaps something to be celebrated even. However, despite the reasons behind it and the festivities, this shift significantly impacts how you’d want to approach estate planning a little better.
Here is why you need advice and guidance in estate planning when your child is a US resident.
Everyone is encouraged to set out and do the tasks around estate planning. A well-made estate plan should be able to communicate how you want your wealth and possessions to be managed and divided when you’re no longer here. This should usually include:
- Making a will. Having a legal document with your written wishes will provide proof for future executors and beneficiaries on who you want the recipients of your assets to be. You may also choose your executor, entrusting the task to an expert or even just a family member.
- Creating a trust fund. Keeping an account with your money can be pretty crucial to the legal protection of one’s cash after death. These funds are often distributed amongst beneficiaries, with advice from a deceased person’s will.
- Planning donations. Should you have any organizations or charities that you want to donate your savings and assets to, including it in the estate planning process can be a good act and lower any estate taxes.
- Determining inheritors. Choosing who gets the estate and benefits is also an essential part of estate planning. The state may have its own say about how your assets would be distributed otherwise.
Parents should be giving the best for their children, even after they pass. Many do want to leave their children with their assets to ensure they’re able to live comfortably on the inheritance they receive. Some may choose to disinherit a child or opt to revise their estate plan due to the circumstances of a situation, such as a difference in the country of residency.
Additional taxes are often made when a child, who’s considered an inheritor and beneficiary that lives in the US, receives estate from a Canadian parent. This can bring quite the hassle, as that inheritance would require a clearance certificate. You would have to file for the additional taxes for each estate or trust being distributed by the executor.
It can be a case-to-case basis, but this can be complicated further when a US resident is subject to paying US Inheritance tax. It’s imperative that one gets advice on how to create an estate plan that can minimize the financial consequences while complying with the tax matters that may apply.
In summary, estate planning is a must-do for every resident in order to ensure that their loved ones are protected and taken care of after their passing. A child moving to the US can cause some tax issues and complications, so discussing it with a legal professional would be the best move.
Need a will and estate lawyer in Kanata? Ontario Wills & Estate Plans provides quality legal advice for Canadians who want to have the right approach and structure to their estate plan. Contact us today!