It is important to have an experienced cross-border attorney analyze an existing estate plan prior to a move. In like manner, a U.S. cross-border attorney and a Canadian cross-border attorney are often consulted when assets remain on both sides of the border. Cross-border estate planning is a sophisticated field and is subject to frequent change. The estate planning laws in Canadian provinces and in U.S. states are not uniform, which can lead to different interpretations. Tax ramifications, ease of administration and financial objectives should all be considered when constructing a cross-border estate plan. Collaboration between cross-border financial advisors, CPAs, CAs and other practitioners creates a cohesive strategy and is highly recommended. Importantly, a knowledgeable cross-border financial advisor has the ability to identify shortcomings and work under a team approach.
Private pension income is an important revenue source for many Canadians. Individuals who have Canadian corporate pensions should understand how a U.S. domicile might effect their pension taxation in lieu of a Canadian domicile.Currently, the CRA fully taxes company pension plans but subtracts an annual $2,000 dollar credit for Canadian residents. However, Canadian pensions are taxed at IRS income tax rates when domiciled in the U.S. The IRS income tax rates can create additional after-tax pension income but double taxation might also be the outcome of a transition without the involvement of a knowledgeable cross-border professional. Double taxation by the CRA and IRS can be mitigated through the Canada-U.S. Tax Treaty and proper tax filings.
There is no “one size fits all” cross-border financial planning strategy. Therefore, it is important to partner with a qualified team of tax, legal and investment professionals who specialize in Canadian and United States cross-border transitioning. Please contact Cardinal Point Wealth Management at http://www.cardinalpointwealth.com/US/contactus.html to review your unique situation.