Tag: Cross-Border

11 Aug

The Chambers Global Private Wealth Guide

Nick Esterbauer Charities, Common Law Spouses, Estate & Trust, Estate Planning, Executors and Trustees, General Interest, News & Events, Pension Benefits, Power of Attorney, RRSPs/Insurance Policies, Trustees, Wills Tags: , , , , , , , , 0 Comments

Earlier this year, Ian M. Hull, Suzana Popovic-Montag and I contributed the law and practice content for the Canada chapter to the Chambers and Partners 2017 Global Private Wealth Guide.

The Global Private Wealth Guide includes a chapter for nineteen different countries and features practical information regarding tax issues, succession law, the status of trusts, business and charitable planning, and the role of fiduciaries in each jurisdiction.  The Guide also features a profile page for each country, in which general information related to relevant business practices is summarized.

The Private Wealth Guide is a helpful tool for lawyers assisting clients who may hold property or business interests in multiple jurisdictions.  Among the interesting features of the website for the Guide is the option of comparing the treatment of each issue between two or more jurisdictions.  For example, it offers the opportunity to obtain quick and reliable information regarding any differences between the treatment of marital property in Canada and the United States.

A complete electronic copy of the guide is available here.  A link has also recently been added to the resources section of our website.

Thank you for reading and have a great weekend.

Nick Esterbauer

18 Nov

Estate Issues for Americans to Consider Before Moving North

Nick Esterbauer Estate Planning, General Interest, In the News Tags: , , , , , , , , , 0 Comments

Just over a week ago, the Canadian Immigration and Citizenship website crashed following the conclusion of the U.S. presidential election.  After hearing about this, I started to wonder, how difficult would it really be for Americans who are dissatisfied with the outcome of the recent election to flee to Canada?

Aside from entering the country on a student or work visa, certain individuals wishing to immigrate to Canada may apply for Express Entry as a skilled worker, caregiver, or a refugee.  Americans with family in Canada may also be able to apply directly for immigration to a province through the Provincial Nominee Program.

Issues with cross boarder estate assets
“If new Canadian residents own assets cross-border, it may result in difficulty in administering property during incapacity and/or following death.”

Individuals qualifying for immigration to Canada who may be considering doing so should not neglect cross-border tax and estate planning issues that may result from their relocation before proceeding with such a move.

When moving from one jurisdiction to another, it is important that one takes extra steps to ensure that elements of existing incapacity and/or estate plans will be recognized in his or her new home.

If new Canadian residents own assets cross-border, it may result in difficulty in administering property during incapacity and/or following death.  It is important that fiduciaries are chosen appropriately, so as to facilitate their access to assets in the relevant jurisdiction, without triggering cross-border tax issues and issues of inaccessibility.  Depending on the jurisdiction, taxes may be payable with respect to foreign assets based on citizenship, residence, location of the individual or his or her assets, domicile, or any combination of these factors.

It is also important to remember that simply immigrating to Canada may not exempt U.S. citizens from the payment of American inheritance tax.  As my colleague, Noah Weisberg, blogged last month, President Elect Trump has vowed to abolish inheritance tax altogether.  However, Mr. Trump has proposed to replace current U.S. inheritance tax with what is being referred to as a capital gains tax that applies to assets of certain estates valued at $10 million or greater.  At this point in time, it remains unclear which of the policies upon which the incumbent president’s campaign was based will ultimately be implemented.

Have a great weekend.

Nick Esterbauer

07 Jul

Creating Uniform Power of Attorney Legislation

Nick Esterbauer Capacity, Elder Law, Power of Attorney Tags: , , , , , , 0 Comments

Ten years have now passed since the introduction of the Uniform Power of Attorney Act by the American Uniform Law Commission.  Since 2006, the Uniform Power of Attorney Act has been approved and recommended for enactment in all US states.

Much like our own Uniform Law Conference of Canada, the American Uniform Law Commission is tasked with enacting legislation that individual states are thereafter encouraged to adopt.

earth, space, lights, USA, United States, satellite, orbitTo date, many states have not yet adopted the Uniform Power of Attorney Act or other comparable legislation to deal with attorneyship and guardianship issues.  So far this year, however, five states, including Utah and Washington, have introduced and/or enacted the uniform legislation.  A surprising number of states, which include our neighbours in New York State and vacation hotspots such as Florida and California, where a number of Canadians own property and spend the winter months, have not implemented the Uniform Power of Attorney Act.

The Uniform Power of Attorney Act is subdivided into four articles:

  • Article 1 defines the term “incapacity” to reflect American common law, outlines the formal requirements for Powers of Attorney, and provides, among other terms, that a Power of Attorney will be treated as if durable or continuing (i.e. the authority of an attorney will continue during a period of the grantor’s mental incapacity, rather than being limited to use while the grantor remains capable) and will come into effect immediately, unless the document states otherwise;
  • Article 2 outlines the authorities of attorneys for property and the circumstances in which an attorney may or may not exercise a Power of Attorney to transfer or deplete assets that are otherwise the subject of bequests under the grantor’s Last Will and Testament;
  • Article 3 contains Power of Attorney forms and related instructions for use by lawyers and laypeople alike;
  • Article 4 includes miscellaneous provisions that clarify the role of the Act within the context of other legislation and Powers of Attorney that predate it.

In Ontario, the Substitute Decisions Act governs most matters involving Powers of Attorney.  If older Canadians and/or those experiencing cognitive decline spend time in the United States, it is advisable to look into the relevant state’s requirements to ensure that their Powers of Attorney provide the authority required to assist in managing affairs in these other jurisdictions.

Thank you for reading.

Nick Esterbauer

05 Jul

How Can Life Insurance Supplement an Estate Plan?

Nick Esterbauer Beneficiary Designations, Elder Law Insurance Issues, Estate Planning Tags: , , , , , 0 Comments

Life insurance can be a useful tool in estate planning to offset tax liabilities and supplement the assets that may otherwise be available to leave to a surviving spouse or other family members.

An article by Michael Grob, featured in the most recent issue of the Step Journal, highlights the potential of life insurance in estate planning, with a focus on the utility of insurance within the context of high net worth individuals who have assets in multiple jurisdictions.

business, document, proposal, marketing, pen, office, desk, notepadLast year, the Canadian Life and Health Insurance Association released statistics from 2014, which suggests that the size of Canadian life insurance policies continues to grow, despite prolonged low interest rates and slower than average investment growth.  During 2014, the value of life and health insurance policies increased by 11.5% to $721.2 billion.  While these figures suggest that the use of life insurance in estate planning is increasing, Mr. Grob states that it is less commonly used to its potential in the cross-border context.

There are many reasons why life insurance policies are such an effective estate planning tool, and why they may be especially suitable when cross-border issues may also present themselves.  These reasons, which are highlighted within Mr. Grob’s article, can be summarized as follows:

  • Availability of liquid funds available for use by an estate upon death, including for the satisfaction of foreign taxes and/or inheritance tax, where there may otherwise be complications in obtaining probate that will delay the payment of these estate liabilities;
  • Tax concessions generally associated with life insurance (in Canada, life insurance proceeds are not typically taxable, nor are they normally subject to probate fees when a designated beneficiary other than the estate is identified);
  • Accessibility to life insurance in other jurisdictions, even if local access is limited, through international providers;
  • Variety of different options regarding policies and their terms; and
  • Equalization of inheritances left to survivors; for example, in circumstances in which a business will be left to one child and the testator wishes to establish a life insurance policy to benefit the other(s) or to provide a corporation with sufficient funds to buyout the business interests left to one or more shareholders.

With all of the benefits associated with the use of life insurance policies, it is important to consider the potential of life insurance in achieving clients’ objectives when assisting them with estate planning.

Thank you for reading.

Nick Esterbauer

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