Estate Planning

When our daughter was born, my wife and I had wills drawn up that used revocable trusts in the event that we both were to pass away. Control of the trusts would pass first to my brother and then to my sister, paralleling the guardianship of our daughter. Our goal is for the assets to follow her to her new family, with no strings attached.

Once we moved to Canada, though, we were told that having a US executors and US trustees would be problematic. At the same time, we didn’t really want to do a full re-working of everything, because our intention is that our daughter (aged 6) would return to the US if we both were to die. Thus, having a US estate plan still makes sense for us.

The solution we’ve arrived at is two-fold. First, we’re continuing to keep our US wills and US estates in place for our US assets (which is the larger share of our assets). Second, for our Canadian assets, we are having wills drawn up that, in the event of both of us passing away, use a trust services company (our bank) to enable my brother or sister to manage our estate remotely. We’ve made it clear to the trust services company that the goal is just to liquidate everything and move it back to the states.

I must confess — I’m no expert on estate planning and I’m not convinced that this is the ideal solution. I’m sure that there are things we could do, for example, to improve the tax efficiency of things. That being said, it meets our needs better than just having a US will, and because our intention (for now) is that our daughter would go back to the States if we both were to die, I think for the time being it makes sense to keep the US will in effect. Once our daughter is older (in say 10 years time) the plan will likely change to one that would keep her in Canada, at which point we’ll re-do everything with that in mind.

One downside to having the US trusts, though, is that Canada requires a tax filing for these trusts every year (even though they are empty). This isn’t a big deal, but it will add a couple of hundred bucks to our tax bill each year. My plan is to start doing our taxes ourselves in the next year or two, so I’m not hugely worried about this. Plus, since our goal right now would be for our daughter to return to the US, it makes sense to keep them even with the additional cost.

Finally, we took a similar approach with our power of attorney documents. If we both were to be incapacitated, we’re using a trust services company as co-attorney with my brother. That way, he can effectively direct things while remaining a US resident.

It was a little tricky to find a lawyer who could handle this. We worked with one lawyer initially, but it was clear that she didn’t really know what she was doing in terms of the crossborder aspects. We ended up with someone, though, that really seems to know her stuff. I don’t have any particular recommendations for trust services companies. I just went with the banks that we have our mortgage and checking account with. When we revisit our wills in 5-10 years, I suspect will get rid of the trust services company in favor of a local friend. If the goal is for our assets and daughter to remain in Canada, though, I could see us continuing to use a trust in some capacity until she reaches a certain age.

If you have any questions about estate planning, please feel free to ask, with the caveat that it’s entirely possible I will not have an answer for you. 🙂 And if you have any experience with your own version of a crossborder estate plan, I’d love to hear it!

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