US resident, CDN citizen - create a will

canuck_girl999 · Post by **canuck_girl999** » Mon Oct 31, 2016 4:13 pm

I realize this might not be totally a tax question but would effect my estate's final taxes hugely if handled improperly I'm guessing.
I have a will in Canada. I was advised by the Canadian lawyer that I should have a will in the US as well, as otherwise it could be a problem.
My situation is that I have an IRA that I'll be taking withdrawal payments in the next 5 years and will not be moving it to Canada.

So has anyone in this situation gotten a will in the US where the IRA is the major part (such as when I move back to Canada, it would 100% of my US assets)?

Would this will be just like a US citizen / resident getting a standard will (ie: all my US assets go to my dog?, etc) and is this do-able by a standard US lawyer.

Thanks for any help.

CG

nelsona · Post by **nelsona** » Mon Oct 31, 2016 4:30 pm

A couple of points. As long as a will is drawn up in the jurisdiction where you LIVED AT THE TIME, it is valid, even after you move. And most wills have a clause that states that whatever was not specifically addressed goes to ABC, or my estate.

You can only have ONE legitimate will, so when your Cdn advisor said to draw up one in US "as well", this was NOT sound advice.

Regardless of where you live though, or where the bulk of your assets are , you want the will to address any Cdn death tax and US estate tax concerns in BOTH jurisdictions, and if the one you have now does not do that you would need to REPLACE or MODIFY it, not draw up a secondary one.

As to your specific concern, I do not believe your will would have much bearing on what taxes you would pay in US or Canada, based on what you describe. Your IRA has a designated beneficiary (and you would probably want this to match your will), they will inherit the IRA upon your death, and then they will choose to either collapse it of take withdrawals, like you are. That will be up to them.

More important than the will, will be where you die. If you die while a resident of Canada, the death taxes in Canada (due to everything being considered sold/collapsed at death) should be more than enough to cover any possible US estate taxes. There are enough exemptions and limits that unless you have 5-10 million or more, you won't have much estate tax.

So, speaking to a US estate planning expert might be wise, but it may be more important to change your current plans than changing or replacing your will.

nelsona · Post by **nelsona** » Mon Oct 31, 2016 4:33 pm

To clarify last sentence:
So, speaking to a US estate planning expert might be wise, but his advice may lean more to changing your current plans than changing or replacing your will.

canuck_girl999 · Post by **canuck_girl999** » Tue Nov 01, 2016 6:27 pm

Thank you Nelson.

canuck_girl999 · Post by **canuck_girl999** » Tue Nov 01, 2016 6:32 pm

One more clarification Nelson.

If I didn't have a US will and moved back let's say in 1 month, could I then alter my will in Canada to address the US IRA as well?

What I'm wondering is does there need to be any US will? or will altering the Canadian one once I'm resident of Canada again be okay? ( I know not having the US one may be dumb but just wanted to check more about there having to be any US will or not).

Thanks.

nelsona · Post by **nelsona** » Tue Nov 01, 2016 10:43 pm

As I said, you don't need a "US will". You need a will that addresses any US concerns, regardless of where you live. the only thing that matters is that it is drawn up under the rules of the place you are resident at the time you write the will.

You don't need a willspecifically for just an IRA, since you already list the beneficiaries.