You’ve decided to leave Canada. You’ve worked with your advisor to get everything sorted out with your investments, banking and insurance. You’ve got a new place to live and have packed everything for the long journey.
Did you remember to review your Estate Plan?
Having a Will and Power of Attorney documents is critical for everyone. Today we are going to focus on just the Will portion of things but having a Power of Attorney is equally important. If you DO NOT have one, please make this a priority in your new country. If you DO have one, keep reading.
Is your Canadian drafted Will going to be accepted in your new country?
In the United States. Yes.
In the UK? Yes
In other countries? Well that’s a tougher question.
What you should be asking though isn’t whether your Canadian Will is accepted but rather, does it make sense in your new country?
When you get an Estate Lawyer (not to be confused with a Real Estate lawyer!) to draft a Will, they are using the laws of that country in completing the document. Canada and the UK might be members of the Commonwealth but they would have their own laws on Estates and what is permissible. We are neighbors with the United States but they have totally different laws and programs when it comes to Estates.
So even though your Canadian Will might be accepted if you have moved to London or Denver, that doesn’t mean it’s the right document. It’s written for Canadian laws and the simple fact is that you could be missing out on important Estate planning tools in your new country by not making a Will that fits your new country’s laws.
This doesn’t mean that you toss away your Canadian Will. You might still have assets here in Canada like a cottage that having a Canadian Will simplifies things for your Executors.
The other complication with cross-border Will planning relates to whom you have appointed as your Executor.
Did you know that in Canada, if you’ve named someone as your Executor and they are a non- resident, that person might be required to post a Bond in the amount of the Estate as security. Yes that’s right. To be a non-resident Executor, you need to pony up money equal to the Estate before you can act.
A small caveat to this. If you live in a Commonwealth country (ie. UK, Australia etc.) then the requirement to post a Bond is waived. Long live the King…or something like that.
The requirement to post a Bond is a real hassle and other countries, like the US, have similar rules. You can see why I’m telling you to get a new Will done when you move. Keep it Super Simple principle is in order.
There is one other Estate Plan we should also talk about. The one belonging to your parents. Remember all that stuff about posting Bonds for non-resident Executors in Canada? Well if you’re their named Executor and have moved down south, now it’s you that has to potentially post a bond for their Estate.
Even worse, the US has some very strict rules when it comes to Estates and even if you could post the Bond to act as their Executor, it might expose your parent’s Estate or you to additional taxation in the US. EVEN if they don’t have any direct exposure under the basic US Estate Tax regime.
In short. IT’S COMPLICATED.
What’s the TL/DR?
When you leave Canada, consult with an Estate Lawyer in your new home. Get an appropriate Will done that works for the laws that apply to you now.
If you have assets that remain in Canada, don’t discard your Canadian Will but do speak to a Canadian Estate lawyer about it.
Lastly, speak to your parents about their Wills and make sure they; and you, are properly prepared so that you can avoid any potential problems as a non-resident Executor.
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