In this segment for Investment Executive, Terry Ritchie talks about U.S. estate planning issues for Canadians with property in the U.S. Recent estate property tax changes in the U.S. have relieved the burden for many Canadians of what happens upon their death when they own U.S. property. If a Canadian owns property with a worldwide value of less than $5.25 million (USD), then the applications of credits may resolve any U.S. estate tax issues.
Those owning property (including U.S. shares) may still be subject to U.S. estate tax, but exemptions do help. An executor would need to file a U.S. estate tax return, and the worldwide estate is part of that filing. If Canadians don’t want the IRS involved upon death, they may benefit from alternative strategies such as partnerships or trusts.
For U.S. citizens living in Canada, estate tax exemptions are much higher now at $5.25 million, which will rise with inflation. If an American in Canada is married, that couple can double up on the exemption. In summary, the estate tax has not gone away completely, but the number of those affected by it has diminished dramatically.