US Estate Taxes On Canadian Estates

Guest Contributor: Peter J. Merrick, TEP

Website: EXIT WITH SUCCESS - EXPERT IN CROSS-BORDER RISK

Estate Tax: Millions of Canadians Will Unknowingly Have Their Estate Taxed By Their US' Uncle Sam. Understanding Situs Assets and How They Affect Canadians.

This message is for my fellow Canadians. Have you ever heard of the term "situs assets"? You should. But many Canadians that live in Canada their entire lives haven't! But it's essential that if you have any sizable wealth to know about US Situs assets, especially if you have properties or investments in the United States. Let's break this down into simple words.

What are Situs Assets? Imagine owning a vacation home in Florida or stocks in an American company like Apple or Disney. These assets are in the US, and therefore, they are called "situs assets." In simple terms, it's property or investments considered located in the US by the IRS.

Why Should Canadians Care? Now, you might be wondering, "I'm Canadian. Why should US taxes bother me?" Well, even if you're Canadian, the US government wants a piece of the pie if you sell your situs assets or if they are passed on after you're gone. For Canadians and other foreign nationals, this is the US Estate Tax system.

How Can Canadians Protect Themselves from US Estate Taxes?

1. Get Informed: The first step is to know what you own in the US. Talk to a US cross-border financial expert.
2. Trusts: One popular way to avoid big tax bills is by putting your US assets in a specific kind of trust. It's like a safety box that holds your assets but has some rules on how they're used.
3. US Life Insurance: Some Canadians buy US life insurance held in an?irrevocable?life insurance trust?(ILIT) that helps cover the tax bill. This way, their loved ones don't have to worry about paying a lot when they inherit the assets.
4. Talk to a Cross-Border Expert: Tax rules can be complicated. Speak with a tax specialist, especially one familiar with US and Canadian laws, to get the best advice for your situation.

Situs assets might sound fancy, but it's just another term for properties or investments in the US. If you own such assets, it's essential to know the rules and find ways to protect yourself from big tax bills. Remember, a little knowledge can protect you!

If you would like to discuss strategies and explore opportunities to protect your US situs assets from US estate taxes, let's schedule a call. To arrange an introduction to Peter J. Merrick, CLICK HERE.

About the author. Peter J. Merrick, TEP, is a Commentator/Keynote Speaker & Expert in US/ Canadian/International Cross Border and Estate Planning and Insurance & Annuity Planning - Author of The Business Novel - The King of Main Street. To read reviews, please click here.

Who is Peter J. Merrick, CFP, TEP?

Over three decades, Peter specialized in de-risking and saving his clients up to 40% of their wealth that would have otherwise been paid out because of poor planning. These proven solutions effectively shelter income, reduce taxes on income and estates and defer or eliminate tax on investments and creditor-proof assets for domestic and international clients.

Peter is also an author.

Peter has written three comprehensive LexisNexis business, legal, tax, succession and estate planning textbooks. For 18 years, Peter wrote a column for LexisNexis called "The Bottom Line," one of the largest professional tax and accounting publications.?Peter was also a university and college finance and financial planning lecturer for over 12 years.

In 2019, Peter relocated to San Diego, California, from Toronto, Canada. Right now, he sees a number of wealth-saving opportunities resolving long-ignored issues for Canadians in corporate planning, cross-border US and international planning, financial, philanthropic, and estate planning implementation, utilizing Canadian/US Life Insurance and Canadian/US Annuity strategies.

Peter works with high-net-worth individuals and their legal, tax and financial professionals performing Canadian estate freezes and terminal tax planning, as well as those who seek to relocate to the US or have financial interests in the US from places like Canada and other national jurisdictions.

It is absolutely essential that you partner with and work with an expert familiar with the Canadian Income Tax Act, the IRS Tax Code, and US/International Tax Treaties before implementing any strategy in the areas of Canadian estate freezes, terminal tax planning, and cross-border planning.

If you would like to discuss strategies and explore opportunities to protect your US situs assets from US estate taxes, let's schedule a call. To arrange an introduction to Peter J. Merrick, CLICK HERE.

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