US couple wants to retire to Canada with a living trust
QUESTION:
We are US citizens contemplating early retirement and moving to Canada (applying for Canadian residency).
Post retirement income will mainly be funds distributed from retirement plans.
Currently we have a living trust established here for estate planning.
Please advise re: tax consequences, and also, if this trust will be applicable under Canadian law.
How can I buy "The Border Book"?
Thanks for your help.
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david ingram replies:
I apologize but your question is too extensive and personal for me to answer as part of this forum. I have added you to the list and others may want to comment but in general:
1. It is unlikely that you can retire to Canada unless you are Canadian Citizens who moved to the US in the first place. To put it into perspective, our Prime Minister and the Premier of BC would not qualify to retire to Canada under our immigration rules. Neither would they or I qualify to retire to the United States.
You can check out your own qualifications by filling in our self-assessment questionnaire at: http://www.cic.gc.ca/english/skilled/assess/index.html
You need 75 out of 100 points to qualify.
There is also a business immigrant class where you have a net worth of $800,000 and invest $400,000 in canadian Business or pay about $135,000 in fees to qualify.
2. Your living trust has no use in Canada and likely has NO use in the US. For the most part, US living trusts are not as effective as a good will. The proof of this is that your annual tax return disregards the living trust if prepared properly.
Very few people can genuinely take advantage of a living trust and even then, it only avoids probate fees while costing more to adminster and hold onto for years BEFORE you die. The US Federal Trade Commission has some interesting comments about Living Trusts at: http://www.ftc.gov/bcp/conline/pubs/services/livtrust.htm
The Border Book is out of print. However, the two major chapters have been updated and can be found at www.centa.com. Click on US/Canada Taxation for a 26 page comparison and analysis of what you would have to go through.
You would not be happy with the tax consequences of moving to Canada at any rate. Although many do retire here, they are almost always a couple where one was born a Canadian and they move here in early retirement to take advantage of our medical system AFTER their US benefits have run out and they do not yet qualify for Social Security Medical.
If you wish a comparison send me your last two years US returns and we will prepare a "quick and dirty" pro-forma Canadian Tax return which will show you the differences. Let me know what province you are thinking of coming to as well. If your present tax return does not reflect what you expect to be getting, send what you expect to get in retirement and we will do a comaparison for you. The fee would be around $300.00 US.
We are US citizens contemplating early retirement and moving to Canada (applying for Canadian residency).
Post retirement income will mainly be funds distributed from retirement plans.
Currently we have a living trust established here for estate planning.
Please advise re: tax consequences, and also, if this trust will be applicable under Canadian law.
How can I buy "The Border Book"?
Thanks for your help.
=
david ingram replies:
I apologize but your question is too extensive and personal for me to answer as part of this forum. I have added you to the list and others may want to comment but in general:
1. It is unlikely that you can retire to Canada unless you are Canadian Citizens who moved to the US in the first place. To put it into perspective, our Prime Minister and the Premier of BC would not qualify to retire to Canada under our immigration rules. Neither would they or I qualify to retire to the United States.
You can check out your own qualifications by filling in our self-assessment questionnaire at: http://www.cic.gc.ca/english/skilled/assess/index.html
You need 75 out of 100 points to qualify.
There is also a business immigrant class where you have a net worth of $800,000 and invest $400,000 in canadian Business or pay about $135,000 in fees to qualify.
2. Your living trust has no use in Canada and likely has NO use in the US. For the most part, US living trusts are not as effective as a good will. The proof of this is that your annual tax return disregards the living trust if prepared properly.
Very few people can genuinely take advantage of a living trust and even then, it only avoids probate fees while costing more to adminster and hold onto for years BEFORE you die. The US Federal Trade Commission has some interesting comments about Living Trusts at: http://www.ftc.gov/bcp/conline/pubs/services/livtrust.htm
The Border Book is out of print. However, the two major chapters have been updated and can be found at www.centa.com. Click on US/Canada Taxation for a 26 page comparison and analysis of what you would have to go through.
You would not be happy with the tax consequences of moving to Canada at any rate. Although many do retire here, they are almost always a couple where one was born a Canadian and they move here in early retirement to take advantage of our medical system AFTER their US benefits have run out and they do not yet qualify for Social Security Medical.
If you wish a comparison send me your last two years US returns and we will prepare a "quick and dirty" pro-forma Canadian Tax return which will show you the differences. Let me know what province you are thinking of coming to as well. If your present tax return does not reflect what you expect to be getting, send what you expect to get in retirement and we will do a comaparison for you. The fee would be around $300.00 US.
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