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What Snowbirds Should Know Before They Buy Down South

Posted: 06/17/2013 12:19 pm

The Canadian population is becoming increasingly globalized, whether by reason of marriage, property ownership or otherwise. Because of this, Canadian assets are becoming more commonly held in foreign jurisdictions, causing legal complications, especially for estates.

Those dreaming of a tropical escape from the slush and ice of Canadian winters are looking South for a place to thaw out. In particular, current inexpensive housing prices in the United States has made it an attractive place for Canadians to buy real estate. Those in the market for snowbird condominiums or other properties south of the border need to buy what it is they can afford and can make them happy, without their estate plans at the forefront of their mind. However, it's important not to be naïve in these cross-border property purchases, in order to ensure assets pass on in a meaningful way.

It is not enough to focus solely on the tangibles that can be dealt with when making these decisions, the next moves need be examined as well. In the case of a Florida condo, for instance, buyers need to speak to their tax advisers for specific advice as to their current circumstances. Lawyers can give some direction in a broad manner but tax advisers are better versed in specifics of the situation at hand.

When purchasing property in the United States, it is prudent to look into the country's frequently changing tax laws and restrictions. There are often changes to exemption rates and to actual tax rates as well. One aspect is the need to consider what kind of ownership is desired and to make sure it is properly adjusted according to the location of the property. Joint ownership may mean something different in a foreign jurisdiction than it does in Canada. Options in a place like Florida may include joint tenancy, tenancy by the entirety, tenancy in common or single ownership.

Trusts are also becoming more frequently used vehicles within Canada. Canadians should be alert, however, to the complications that can arise when holding American assets in a Canadian trust. Corporately-held assets can also become complicated by jurisdictional issues. Because individual circumstances differ and severe consequences can follow from poor planning, it is important to consult an experienced professional for advice on these matters.

In particular, it is important to talk to a tax expert about estate taxes because federal organizations, such as the NRA and CRA, operate differently and can change dramatically. Recently, the United States has gone through tremendous change in terms of federal and state estate taxes. These changes will have a significant impact on Canadians who hold assets in the U.S.

In considering that new retirement property for the children and grandchildren to enjoy, don't shy away because of tax concerns. The best thing to do is to consult with financial and legal professionals about your specific interests and concerns and then continue on from there. When armed with the information uniquely applicable to your circumstances, your estate planning will be clearer, more concise and reduce issues for yourself and your family.


*Ian Hull and Suzana Popovic-Montag are partners at Hull & Hull LLP, an innovative law firm that practices exclusively in estate, trust and capacity litigation. To watch more Hull & Hull TV episodes, please visit our Hull & Hull TV page.

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    Beneath spreading Live Oak branches, Trinity Episcopal Church has served <a href="http://www.visitflorida.com/Apalachicola" target="_hplink">Apalachicola</a> since 1838. [Colin Hackley for <a href="http://www.visitflorida.com" target="_hplink">VISIT FLORIDA</a>]

  • Quincy

    Many <a href="http://www.visitflorida.com/Quincy" target="_hplink">Quincy</a> residents became wealthy by following the advice of local banker Mark W. "Mr. Pat" Munroe and investing in Coca-Cola stock at the start of the 20th century. [Colin Hackley for <a href="http://www.visitflorida.com" target="_hplink">VISIT FLORIDA</a>]

  • Sebring

    The Buckeye Building facade in <a href="http://www.visitflorida.com/Sebring" target="_hplink">Sebring</a>. [Lara Cerri for <a href="http://www.visitflorida.com" target="_hplink">VISIT FLORIDA</a>]

  • Homestead

    <a href="http://www.visitflorida.com/Homestead" target="_hplink">Homestead</a> is the second-oldest city in Miami-Dade county. The Overseas Railroad was completed in 1912 and the city of Homestead was incorporated in 1913. [Peter W. Cross for <a href="http://www.visitflorida.com" target="_hplink">VISIT FLORIDA</a>]

  • Lake Worth

    After 18 years and covering more area than any other festival of its kind, <a href="http://www.visitflorida.com/Lake_Worth" target="_hplink">Lake Worth</a> claims bragging rights to having the largest street painting festival in the country. [Peter W. Cross for <a href="http://www.visitflorida.com" target="_hplink">VISIT FLORIDA</a>]

  • Stuart

    The St. Lucie River is <a href="http://www.visitflorida.com/Stuart" target="_hplink">Stuart's</a> water gem. There's Riverwalk Stage, the fishing pier and boat docks as well as a beautiful boardwalk where you can take a stroll along the river's edge. [Peter W. Cross for <a href="http://www.visitflorida.com/" target="_hplink">VISIT FLORIDA</a>]

  • Madison

    Lunch is served at Rancho Grande Mexican restaurant, one block from <a href="http://www.visitflorida.com/Sebring" target="_hplink">Madison's</a> courthouse. [Colin Hackley for <a href="http://www.visitflorida.com" target="_hplink">VISITFLORIDA</a>]

  • Micanopy

    Mosswood Farm Store and Bake House in <a href="http://www.visitflorida.com/Micanopy" target="_hplink">Micanopy</a> sells organic foods, coffee and artisan bread baked in a brick oven. [Lara Cerri and Ted McLaren for <a href="http://www.visitflorida.com/" target="_hplink">VISITFLORIDA.com</a>]

  • Fort Pierce

    The Arcade Building, a historic 1926 structure in downtown <a href="http://www.visitflorida.com/Fort_Pierce" target="_hplink">Fort Pierce</a>, rests at the corner of U.S. 1 and Orange Avenue. In 2001, the building was listed on the U.S. National Register of Historic Places. [Peter W. Cross for <a href="http://www.visitflorida.com" target="_hplink">VISIT FLORIDA</a>]

  • Inverness

    Visitors stroll along the wooden boardwalk at Cooter Pond Park in <a href="http://www.visitflorida.com/Inverness" target="_hplink">Inverness</a>. [Lara Cerri for <a href="http://www.visitflorida.com" target="_hplink">VISIT FLORIDA</a>]

  • Mount Dora

    The lighthouse on Palm Island Park. <a href="http://www.visitflorida.com/" target="_hplink">Mount Dora</a> is a charming, historic small town that offers shopping, dining, lodging, boating and several annual festivals. It sits in the heart of Central Florida and is surrounded by lakes. [Julie Fletcher for <a href="http://www.visitflorida.com" target="_hplink">VISIT FLORIDA</a>]

  • Winter Garden

    <a href="http://www.visitflorida.com/Winter_Garden" target="_hplink">Winter Garden</a> is fondly referred to as a modern-day Mayberry. The West Orange Trail offers a variety of eateries, coffee shops, bicycle stores, a theater and historic hotel. [Julie Fletcher for <a href="http://www.visitflorida.com" target="_hplink">VISIT FLORIDA</a>]

  • DeLand

    <a href="http://www.visitflorida.com/DeLand" target="_hplink">DeLand</a> history is told in a series of vivid murals that illustrate the town's evolution. [Julie Fletcher for <a href="http://www.visitflorida.com/" target="_hplink">VISIT FLORIDA</a>]

  • Winter Park

    Quaint alleyways provide intimate dining and shopping experiences. <a href="http://www.visitflorida.com/" target="_hplink">Winter Park</a> is best-known for its outdoor cafes, bistros, upscale specialty shops, history and culture. It has many museums and galleries in the downtown core. [Julie Fletcher for <a href="http://www.visitflorida.com/" target="_hplink">VISIT FLORIDA</a>]

  • Leesburg

    <a href="http://www.visitflorida.com/Leesburg" target="_hplink">Leesburg's</a> Mote Morris house, built in 1892, is listed on the National Register of Historic Places. The building was moved one block south and two blocks west from its original location in 1990. [Lara Cerri for <a href="http://www.visitflorida.com/" target="_hplink">VISIT FLORIDA</a>]

  • Havana

    A visitor to downtown <a href="http://www.visitflorida.com/Havana" target="_hplink">Havana</a> crosses Highway 27 at the town's main intersection. [Colin Hackley for <a href="http://www.visitflorida.com/" target="_hplink">VISIT FLORIDA</a>]

  • Delray Beach

    Forty of the orignal 100 feet is all that remains of the Florida East Coast Railway Station, constructed in 1896 and located just one block north of Atlantic Avenue in downtown <a href="http://www.visitflorida.com/Delray_Beach" target="_hplink">Delray Beach</a>. [Peter W. Cross for <a href="http://www.visitflorida.com" target="_hplink">VISIT FLORIDA</a>]

  • Cedar Key

    A decorative doorway in downtown <a href="http://www.visitflorida.com/Cedar_Key" target="_hplink">Cedar Key</a>. [Ted McLaren for <a href="http://www.visitflorida.com" target="_hplink">VISIT FLORIDA</a>]

  • Monticello

    Locals gather for food and a how do you do in <a href="http://www.visitflorida.com/Monticello" target="_hplink">Monticello</a>. [Colin Hackley for <a href="http://www.visitflorida.com" target="_hplink">VISIT FLORIDA</a>]

 

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