Author Topic: Methods to best set up inheritance for Canadian based children  (Read 407 times)


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I am a US citizen by naturalization (also Can citizen), reside in US, my two children are Canadian citizens, residing in Canada.  At my death I would like to leave them each (50/50) the contents of a brokerage account I have in the US.  The account has capital gains in it now and will (hopefully) continue to accrue capital gains.  My preferred goal would be to leave it to them and minimize taxes for them.  Ideally by having the basis for their inheritance to be set to the value at the time of inheritance, and to thus reduce taxes due on the inheritance.

I've researched possible methods of doing this:
1. name them as beneficiaries of the brokerage account, payable/transferable on death. 
2. name my estate as beneficiary and provide in my will for their inheritance of the contents of the brokerage account, my estate paying any necessary probate costs.
3. setting up a trust in the US, and upon death migrate the trust to Canada my making one of my children the trustee, then liquidate the trust in Canada
4. setting up a trust in the US, and upon/after death transfer the capital in the account the year after death (which presumably means selling the securities for cash and paying US taxes on the capital gains??)

Could please you comment on which of these might best meet my goals.  If a trust is used, should your services be integrated with my local legal services to create such a trust?

Phil Hogan, CPA, CA, CPA (Colorado)

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Re: Methods to best set up inheritance for Canadian based children
« Reply #1 on: July 15, 2018, 12:29:58 PM »
Hi dchs

You'll definitely want to reach out to a Canadian cross-border investment advisor to ensure you don't miss any planning opportunities, however, let me try and outline some issues:

Yes, naming them as beneficiaries will be important
Do they have a US ITIN? If not, they may need one before inheriting the US accounts, depending on the broker
You'll want to discuss estate planning issues with a Canadian lawyer to ensure you don't have dual filing requirements when you pass (depending on who the executor is)
Setting up a trust and then transferring to Canada is possible, but highly complex (we can chat more if this interests you)

It's likely simplest to keep the Canadian beneficiaries on the account until you pass. Be careful however. If you have a Canadian executor of your estate you may run into Canadian trust filing requirements.

Hope that helps a little. Please let me know if you have additional questions.

Phil Hogan, CPA, CA, CPA (Colorado)
* The information contained in these posts should not be construed as professional advice and is for informational purposes onl