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When most people hear “estate planning,” they picture billionaires shielding fortunes from tax through exotic legal structures. But the reality is that strategic estate planning is just as critical—if not more so—for families with assets under the U.S. federal estate tax exemption limit of $13.99 million per individual in 2025 (or $27.98 million for couples). For Canadians or dual residents with U.S.-situs assets, cross-border estate planning becomes especially important.

Whether you’re a Canadian snowbird, a U.S. green card holder, or you have assets and family on both sides of the border, a thoughtful estate plan ensures control, clarity, and peace of mind—regardless of whether you’re subject to estate tax.

Why Estate Planning Still Matters—Even Without Estate Taxes

Case Study: Mark and Jennifer – Canadian citizens living in Florida part-time, U.S. green card holders
Mark and Jennifer own a $1.5M vacation home in Florida, $2M CAD in retirement accounts (RRSPs and IRAs), and hold $1M in term life insurance. With three children in Canada, they assume estate planning isn’t a priority.

But if both passed unexpectedly:

• Who would serve as guardian of their minor children across borders?
• Would U.S. probate apply to their Florida home?
• Are their Canadian wills recognized in the U.S.?
• Do their beneficiary designations align with their wishes?

Lesson: Cross-border families face layers of legal complexity across two countries. Without coordination, even modest estates can trigger delays, higher taxes, or court battles.

Planning Around Future Estate Tax Risk

Today’s high U.S. estate tax exemption is scheduled to drop in 2026, potentially to around $7 million USD per person. For Canadians with U.S. assets or those who become U.S. tax residents, this could trigger unexpected exposure. Real estate, U.S. brokerage accounts, and U.S. business interests may all be considered U.S.-situs assets.

Planning Tip: Use the current high exemption to “lock in” benefits through gifting or trust structures. Cardinal Point can help evaluate whether you’re at risk of U.S. estate tax, even if you live in Canada.

Top Estate Planning Misconceptions

• “I’m Canadian—U.S. estate tax doesn’t apply.”
  Not true. Canadians with U.S.-situs assets may face U.S. estate tax without careful planning.
• “I already have a will.”
  Wills need to be coordinated across jurisdictions to be enforceable and tax-efficient.
• “Everything is joint with my spouse.”
  Joint ownership can bypass probate, but may not mitigate tax exposure or protect beneficiaries.

Must-Have Cross-Border Documents

Regardless of your net worth, everyone should have:

• Wills valid in both Canada and the U.S. – Ideally drafted in both jurisdictions to reduce probate complications.
• Powers of Attorney – Appoint someone to manage your financial and healthcare decisions across borders.
• Advance Directives – Ensure your wishes for medical treatment are honored, even when abroad.

Planning Tip: For Canadians with U.S. real estate, a cross-border trust may reduce exposure to U.S. estate tax and avoid dual probate.

Don’t Forget Beneficiary Designations

Case Study: Anthony
A Canadian retiree with a U.S. IRA listed his sister as the beneficiary 20 years ago. He later married and had children but never updated his forms. Upon his passing, the assets bypassed his wife and children entirely.

Lesson: Review beneficiary designations after major life changes, especially for cross-border retirement accounts (RRSPs, IRAs, TFSAs).

Lifetime Gifting Opportunities

While most Canadians don’t face gift tax, U.S. citizens and residents must consider it.

Annual Gift Tax Exclusion (U.S. residents only):

• $19,000 USD per recipient in 2025; or
• $38,000 per recipient if gifted jointly as a couple.

Cross-border planning tip: Canadians gifting to U.S. persons should coordinate with cross-border advisors to avoid U.S. tax complications.

Education and Medical Gifts

Case Study: Carla and Ron
Living in Canada, they wanted to pay their granddaughter’s U.S. private school tuition. By paying the school directly, the gift was not subject to U.S. gift tax, even though they’re non-U.S. residents.

Planning Tip: Direct payments to institutions (not individuals) often avoid tax consequences.

Using 529 Plans for Education Gifting

529 plans offer U.S. tax-free growth for qualified education expenses. While not available to Canadians, U.S. grandparents or parents can fund them to support U.S.-based education.

• Contribute up to $95,000 USD per child (per person making the gift) in 2025 using 5-year front-loading.
• Great for U.S. citizens/grandparents living abroad.

Portability vs. Credit Shelter Trusts (CSTs)

U.S. residents have access to “portability,” allowing a surviving spouse to claim the unused exemption of their deceased spouse. This can reduce the need for traditional CSTs, but only if properly filed via IRS Form 706 upon death.

Drawbacks: Portability isn’t recognized in many U.S. states or in Canada. CSTs may still be appropriate in second marriages, for asset protection, or when shielding from U.S. generation-skipping tax (GST).

Roth Conversions for Cross-Border Retirees

Roth IRAs grow and distribute tax-free in the U.S., and under the Canada-U.S. tax treaty, qualified distributions are not taxable in Canada if properly reported.

When to convert:

• While temporarily in a lower tax bracket;
• Before U.S. estate exposure grows; and/or
• To reduce required minimum distributions (RMDs).

Strategic Use of Life Insurance

Life insurance remains a cornerstone of estate planning, especially cross-border.

Benefits:

• Provide liquidity for estate taxes.
• Equalize inheritances when business assets are involved.
• Offset charitable gifts or replace RRIF/RRSP wealth lost to taxes.

Planning Tip: Use an Irrevocable Life Insurance Trust (ILIT) to keep life insurance proceeds outside the U.S. taxable estate. Consider the Canadian tax implications of this ILIT before funding.

Don’t Overlook State-Level or Provincial Tax Rules

Case Study: Louis
A U.S. citizen living in New Jersey with a $4.8M estate paid a 16% state estate tax, even though his estate was under the federal exemption.

Canadian parallel: Some provinces apply probate taxes as high as 1.5% of estate value. And Quebec has strict formalities for wills drafted outside the province.

Lesson: Provincial and state-level planning matters just as much as federal coordination.

Planning for Special Family Situations

• Second Marriages: QTIP and CST structures can ensure biological children are protected.
• Disabled Beneficiaries: Special Needs Trusts preserve government benefits while allowing financial support.
• Pet Trusts: Yes, even pets can be included in your estate plan.

Case Study: Ellen

Ellen, a widow, has no children but has two cats she considers family. She funded a $50,000 pet trust in her will, appointed a trustee and caretaker, and included residual instructions to donate remaining funds to an animal rescue organization.

Estate Planning for All, Not Just the 1%

Whether you have $500,000 or $5 million, estate planning is about control, protection, and peace of mind. Tax law is only one piece of the puzzle. What matters more is:

• Preserving family harmony;
• Reducing financial burdens during times of grief; and
• Ensuring your values are reflected in your legacy.

Next Steps:

• Review your wills and power of attorney documents in both countries.
• Update beneficiary designations on all accounts.
• Consider whether portability or trust planning is better for your needs.
• Discuss Roth conversions, gifting, and U.S.-situs asset exposure with your Cardinal Point advisor.

At Cardinal Point Wealth Management, we specialize in cross-border financial and estate planning. If you’d like to understand your unique opportunities, we invite you to contact Cardinal Point.

In today’s dynamic estate planning landscape, affluent families—particularly those with cross-border ties between Canada and the U.S.—must navigate both opportunity and complexity. While tax law provides powerful tools for wealth transfer, effective estate planning requires more than legal documents. It demands foresight, communication, and alignment across generations.

For families with U.S. or Canadian citizenship, U.S.-situs assets, or beneficiaries on both sides of the border, the 2025 window offers a unique opportunity. With the U.S. federal estate and gift tax exemption scheduled to fall by half on January 1, 2026 (from $13.99M to roughly $7M per person), timely action could yield millions in tax savings.

This article outlines strategic principles for cross-border estate planning and provides real-world insights for families looking to preserve wealth, reduce taxes, and maintain harmony across generations and jurisdictions.

Who Are Cross-Border Multi-Generational Families?

At Cardinal Point, we define cross-border multi-generational clients as families with:

• Wealth exceeding the lifetime needs of the founding generation;
• Canadian or U.S. citizenship or residency (or both);
• U.S.-situs assets (real estate, securities, business interests); and
• Children, grandchildren, or trusts situated across jurisdictions.

These families often own illiquid assets such as family businesses, real estate, or limited partnerships, and require coordination of U.S. and Canadian estate, gift, and trust rules.

The 2025 Planning Opportunity—and What Happens After

As of 2025, each U.S. citizen or domiciliary has a $13.99M USD exemption from estate and gift taxes. This is not applicable to Canadians—unless they own U.S.-situs property, in which case a pro-rata exemption may be available under the U.S.-Canada Tax Treaty.

Without legislative changes, this exemption will drop to ~$7M USD on January 1, 2026. Above that threshold, U.S. assets are subject to a 40% estate tax. The Generation-Skipping Transfer (GST) exemption—used to shield gifts to grandchildren or future generations—is also set to be reduced on January 1, 2026, without legislative changes.

Cross-border implication: Canadians with U.S. assets may want to act now to lock in treaty-based planning advantages and consider strategies such as gifting, trust funding, or entity restructuring.

Strategic Tools for Cross-Border Families

1. Annual Exclusion Gifting

Every U.S. taxpayer can gift $19,000 USD per recipient annually (or $38,000 USD if gifting as a couple) without using lifetime exemptions. Canadians are not subject to gift tax but should beware of attribution rules and capital gains carryover on gifted property.

Tip: Use annual exclusions to gradually move wealth out of taxable estates while maintaining simplicity.

2. Spousal Lifetime Access Trust (SLAT)

A SLAT allows one spouse to make a gift to an irrevocable trust benefiting the other, thereby removing assets from the estate while maintaining indirect access.

Cross-border caution:

• Ensure SLATs are structured under U.S. trust law if the grantor is a U.S. person.
• Coordinate with Canadian tax advisors to avoid FAPI, deemed disposition, or double tax.

3. Generation-Skipping Transfer (GST) Trusts

GST-exempt trusts can avoid U.S. estate tax for multiple generations. This is particularly powerful for families with U.S. citizen grandchildren or those planning U.S.-domiciled dynasty trusts.

Why this matters for Canadians:

• If gifting U.S. real estate or U.S. shares to future generations living in the U.S., use a properly structured U.S. trust to avoid GST tax.
• GST exemption is not portable—each U.S. spouse must use it or lose it.

4. Grantor Trusts

U.S. grantor trusts allow the donor to pay income tax on trust income, enabling the trust to grow tax-free.

• Useful in cross-border planning when the grantor remains a U.S. taxpayer.
• Can be layered with SLATs, GST trusts, or Installment Sales.

Canadian caveat: Canadian beneficiaries may trigger income attribution and trust reporting obligations under CRA rules. Careful planning and compliance are critical.

5. Discounted Transfers & Installment Sales

Ownership in U.S. or Canadian private businesses or real estate can be transferred using valuation discounts and sales to trusts.

Example:
A Canadian-U.S. family gifts a minority interest in a U.S. business to a GST-exempt trust at a 30% discount. With the full 2025 exemption, they transfer ~$40M USD of value using only $28M USD in exemption, locking in estate tax savings before 2026.

Installment sales to U.S. grantor trusts can further freeze estate value while passing appreciation to heirs.

Coordinating Strategies Across Borders

Best-in-class estate plans combine:

• Exemption-based lifetime gifts;
• SLATs for spousal security;
• GST-exempt dynasty trusts;
• Grantor trust status for tax efficiency; and
• Valuation discounts and installment sales.

Canadian Consideration: Gifting and trust strategies must be reviewed under Canadian rules for deemed disposition, income attribution, and compliance reporting (e.g., T1135, T1141, T3 return obligations).

More Than Taxes: Preserving Values Across Generations

Studies show that 70% of intergenerational wealth transfers fail, not because of bad tax planning, but due to:

• Breakdown in communication;
• Unprepared heirs; and/or
• Lack of shared family vision.

At Cardinal Point, we help families align technical planning with human priorities by:

• Establishing family governance structures;
• Conducting family meetings and education; and
• Designing legacy strategies rooted in shared values.

Final Thoughts: A Narrow Window for Meaningful Planning

The temporary high U.S. exemption offers a once-in-a-generation planning opportunity. For Canadian and cross-border families, it’s also a chance to:

• Reassess U.S.-situs exposure;
• Update outdated trust or entity structures; and
• Use lifetime strategies that avoid the punitive 40% estate tax.

But waiting until 2026 may be too late.Start the conversation today with your cross-border advisory team at Cardinal Point. We specialize in estate and tax planning for families who live, invest, and leave legacies on both sides of the border.

Estate Planning: Why signed legal documents are not enough.

The Challenge

Often when a loved one becomes incapacitated or dies, there are two tragedies. The first one is obvious. The second one isn’t: it’s incomplete estate planning.

Many tragedies in estate planning stem from one hard truth: a set of signed legal documents is NOT a complete estate plan. There is more to an estate plan than a will and/or trust, health care directives, and powers of attorney.

Equating the legal documents with a complete plan can contribute to a host of problems for estate administrators. Estate administrators are the friends and family members who will manage your affairs in case of your incapacity or death: your executors, trustees, and/or attorneys in fact (the technical name for people who hold powers of attorney).

In what sense are the legal documents not a complete estate plan? The legal documents set the boundaries of the plan, what is required and what is prohibited, and provide some guidance on a few essential tasks. But the documents offer only a small fraction of the guidance that estate administrators need to effectively manage your affairs and carry out your wishes. Your estate administrators need to know what to do and how to do it, in light of your life routines, concerns, personal and financial preferences, family dynamics, and a host of other issues. Legal documents alone are inadequate for addressing these critical issues of proactive and comprehensive estate planning.

Estate planning lawyers will not fix this. Sadly, but understandably, lawyers will insist that the legal documents are “the plan” and will not draft additional guidance. Why? They fear that additional lawyer-drafted guidance will be construed as legally enforceable, widening the scope of estate planning and making it more complex.

But the situation still needs to be fixed. Lawyer concerns about complexity do not trump the need for efficient management of your affairs. Leaving your estate administrators to fumble around in the dark with insufficient guidance isn’t fair to them or to your estate plan. Keep in mind that estate administrators typically have no legal or estate planning background.

Lacking essential guidance, estate administrators may experience high levels of stress and frustration and feel inadequate and overwhelmed. Procrastination in fulfilling such difficult and time-consuming responsibilities is common. Many administrators regret that they ever agreed to accept such a burdensome role.

The Solution

The good news is that this situation is entirely preventable. Below we outline a straightforward and effective solution:

• A Certified Financial Planner® (CFP) professional with training and experience in estate planning can and will provide that missing guidance. In both Canada and the United States, financial planners lawfully provide estate planning services; they just cannot draft the legal documents required to implement the plan (that would be deemed “practicing law without a license”).
• The missing guidance is not given by the client’s estate planning lawyer and is not within the scope of the legal documents traditionally associated with an estate plan (Wills, Trust, Power of Attorney documents, etc). Therefore, this guidance does not add to the legal documents in the plan or increase its complexity, nor is it advice from your attorney that makes them legally accountable. 
• The CFP has an ongoing relationship with the client and has a holistic understanding of the client’s broad life situation. The CFP is trained to understand how actions in one area of a client’s financial life may affect other areas. Therefore, the CFP is ideally positioned to provide estate planning guidance that is truly tailored to the client and their specific needs, wishes, and goals. Cardinal Point Certified Financial Planner® professionals (CFPs) have decades of experience in estate planning and helping clients effectively and efficiently manage after the incapacity or death of a loved one. Our CFPs are exceptionally qualified to provide estate planning guidance not covered by the legal documents.

What exactly is this guidance? The guidance is detailed, step-by-step descriptions of what to do and how to properly do it to best manage your affairs in the event that you become incapacitated or upon your death.

This includes:

• Detailed, comprehensive task lists for incapacity or death, and 
• Statements of your intent regarding such things as funeral or memorial service arrangements, pet care, online accounts/assets and other planning and strategizing that is typically not included in legal documents drawn up by your attorneys.

Detailed Task Lists Unfortunately, one cannot simply assign the drafting of task lists to a financial planner. Your task lists are unique and require in-depth knowledge and insight that only you have. You need to drive the development of these lists, with the financial planner serving as a sounding board and advisor. Consider this approach:

• Develop two task lists: one for death and one for incapacity.
• For each task, write enough to capture the essence of the task (e.g., feed the cat, water the plants, pay bills, cancel my subscription, call my work supervisor, etc.). Be comprehensive. Don’t leave any part of your life unaddressed. But at this point you don’t have to provide all the details, just an overview of tasks to be done.
• In a separate work session, go back and flesh out the details of each task including procedures and steps, due dates, phone numbers and addresses, account information, contact persons if the administrator runs into problems, etc. Include tips for completing the task. Remember: the estate administrators do not know how you normally do these tasks, so give them that information.
• Consult and confer with your spouse, your Cardinal Point financial planner, and the person who would usually perform the task. Are the instructions clear? What steps are missing? What other guidance would help the administrator handle these responsibilities?

Cardinal Point has a template of more than 100 of the most common tasks to be completed in the first twelve months following a spouse’s death, so we know that developing these lists is a marathon. But it is worth your time. Look at it this way: volunteering to serve as your executor, trustee, attorney-in-fact, etc. is an act of love. Love them back by making their work as understandable and easy as possible.

Statement of Last Wishes

There is a compelling reason to avoid putting your personal wishes in a Last Will document: if your estate goes through the probate process, that document becomes a public record, and you may want to keep that information private and confidential.

Instead, craft a separate Statement of Last Wishes (a document that remains private, though not legally enforceable). Describe your vision for your funeral or memorial service and celebration of your life. Provide details that won’t leave your loved ones confused or guessing what you would have wanted. Also add instructions regarding things that should be done that are not in your Will. For example, you may add letters to be distributed to your loved ones.

Statement about Pets 

Create a separate document about pet care. In addition to care and feeding, consider providing guidance about medication, play routines, favorite toys, playmates, preferred veterinarian, and your vision about what should happen upon their death.

Statement about Your Digital Life

Some of our most valuable and intimate personal information can be found in our online accounts, profiles, and online forums. Your Cardinal Point financial planner can help you draft a confidential Statement that preserves important digital artifacts, protects your digital identity, and provides for the efficient disposition and closure of online accounts.

Team Coordination

There is enormous value in proactively addressing the complexity of your estate plan with your loved ones in family meetings while you are still alive and well.

• Consider hosting a family meeting every few years to go over the plan at a high level: the general steps that will be followed and, in the event of death, how your assets will be dispersed. Use these meetings to clarify your wishes and answer any questions your loved ones may have.
• Regularly meet with your estate administrators. Confirm that they understand their roles and are prepared to execute their responsibilities.
• Invite your Cardinal Point financial planner to arrange and manage the family meetings for you.

Don’t Procrastinate

These documents are invaluable for managing your affairs in case of incapacity or death even if you don’t have a set of legal estate planning documents. But you need to take the initiative. Why not get started today? Will you need these documents tomorrow? No one can predict the future. Talk with your financial planner: clear written communication of your needs and wishes, and what needs to be done and how to do it, will put you on the path to a smooth and effective estate planning strategy.