Q: I am a resident of Oregon and own property in Canada. One piece is a condo at Whistler, BC and the other is one is ownership of half of a home that my sister and I inherited from my mother. Here in Oregon, my wife and I have a revocable living trust to avoid probate at our passing. I have heard that if I own assets in other states or countries, they will go through probate unless I place them in trust. Should I hire a Canadian lawyer to place these two properties in my trust?
A: Your general points about trusts, avoiding probate and out of state property, are correct. However, not for property outside the US, for example in Canada. Each country has unique systems and laws. In general, when owning assets in another country one must learn the rules of ownership, management, tax, and descent for that country. And one must do so by relying on a professional licensed in that country. In Canada, that would be a Canadian estate planner in the relevant province(s).
Thus, unfortunately, your Oregon or Washington trust is most certain to be useless in Canada; something like a square peg in a round hole. It would be adequate for a San Diego condo and half a house in Nashville, but just not relevant in Canada.
You need to meet with the Canadian estate planner and explore options. One, of course, is a trust that meets Canada requirements. But note that a revocable living trust to avoid probate is much less common in Canada. Among the reasons are that income-producing trust assets can pay higher income tax rates and transfers in and out of trust may have capital gains tax consequences. Further, Canada does not have one standard revocable living trust. Instead, there are variations, each with its unique qualities. One possible trust is for folks over the age of 65, called an Alter Ego Trust. It is closer to our common trust. Other options may include joint ownership, life estates, revocable deeds and just plain wills.
Finally, note that testamentary trusts in Canada – for minors, disabled adults, spendthrifts, etc. – are treated very differently than revocable living trusts. So, if your beneficiary is Canadian, that is another subject.
To establish a Living Trust in Oregon, please call an attorney with the Law Offices of Nay & Friedenberg LLC at (503) 245-0894. We will take the time to understand your needs and craft a plan specific to your unique situation.