[mikesheila]

we have just bought a lot in the villages and are getting a home built. however a lawyer in canada that specializes in US law is telling us that we need to set up a trust and buy the home through the trust in order to avoid estate taxes. In Canada if one spouse dies, it automatically passes to the other spouse. Not so in the states if you are not an american citizen. has anyone else heard that we should buy through a trust?

[texasfal]

You should put it in a trust. In Florida if you have to go through probate, the estate fees (they don't use the word taxes here) are up to 20% of the value of the estate.

[Barefoot]

Originally Posted by mikesheila

we have just bought a lot in the villages and are getting a home built. however a lawyer in canada that specializes in US law is telling us that we need to set up a trust and buy the home through the trust in order to avoid estate taxes. In Canada if one spouse dies, it automatically passes to the other spouse. Not so in the states if you are not an american citizen. has anyone else heard that we should buy through a trust?

I was told by my Canadian real estate lawyer that as long as our Florida home is purchased as "joint tenants" and not as "tenants in common", that the home would automatically pass to the other spouse.

I've heard it said previously that a home should be purchased through a trust. I look forward to hearing more about this from Canadians who have consulted a lawyer that specializes in US law.

This will be a great discussion topic for our new club "Loonies and Toonies" .. which is meeting for the first time in April!

[gump1]

A good book I read on a lot of these issues prior to buying is " The Canadian Snowbird in America" by Terry F Ritchie and Brian D. Wruk who are accountants specializing in Canada/U.S. tax situations. It is available on Amazon.com.

According to one section in the book with property held jointly the title passes to the survivor but the IRS will automatically assume that in the event of the death of a spouse the spouse that passed away contributed 100% of the cost of the house unless the surviving spouse can prove otherwise and as a result there will be a tax on the total value of the property. It is important therefore that each spouse has it documented the amount that they contributed to the purchase.

[rubicon]

We have a revocable trust. We are US citizens living in Florida. Our attorney did not include our home in our trust because we have tenent in entirety which according to our attorney affords us rights and credits via the Homestead Act. Following the death of the first spouse the attorney then suggests placing the home in trust and deeding it accordingly.

[RVRoadie]

McLin & Burnsed are attorneys upstairs in the same building where you do the closing. We used Fred Goller to revise our wills and trusts when we moved to Florida. They were very convenient, prices were reasonable and we were happy with the service. Recently spent about 1/2 hour reviewing our documents to see if any changes were needed after one year. No changes, and no charge for the time.

[Barefoot]

Originally Posted by RVRoadie

McLin & Burnsed are attorneys upstairs in the same building where you do the closing. We used Fred Goller to revise our wills and trusts when we moved to Florida. They were very convenient, prices were reasonable and we were happy with the service. Recently spent about 1/2 hour reviewing our documents to see if any changes were needed after one year. No changes, and no charge for the time.

Are you Canadian? Did you buy your home in the name of a Trust?

[ijusluvit]

Here's another one for the mix:

My Canadian neighbor told me when he bought and was negotiating his mortgage with a prominent local bank, he was told he would have to pay an additional fee (thousands), because he was not a citizen. He said "Hell no" and paid cash for the house.

Sounds unfair to me.

[gjbl8114]

Originally Posted by ijusluvit

Here's another one for the mix:

My Canadian neighbor told me when he bought and was negotiating his mortgage with a prominent local bank, he was told he would have to pay an additional fee (thousands), because he was not a citizen. He said "Hell no" and paid cash for the house.

Sounds unfair to me.

It's not only the local banks, it's also The Villages. We had the same experience when we decided to buy. My husband is British and they wanted to charge us an additional fee. This shouldn't be legal.... We did the same thing, paid cash....

[Harleyman]

If you want the correct answer to this question, e mail the Canadian Snowbird Assoc and they will either tell you or point you to the article that they published about this problem, Two years ago their lawyer spoke to the Loonies and Toonies club about this matter. The problem was going to arise when the US changed their tax laws in 2013. If both persons died at the same time, and if you Canadian assets were worth a certain figure, then the US taxman was going to be able to tax your whole estate. It seems to me that the law did not come into effect because we were going to do the trust and didn't. At the time it was a very important topic because if I recall, the asset figure was dropping to 1,000,000 from 5,000,000. If you are not a member of the Cdn Snowbird Assoc it is only $25 per year and well worth it. I have asked several Canadian lawyers about it and have not found one yet that really knows the answer. If you find the answer, please post it on here so we will all know.

[Harleyman]

I should have added one more sentence. The problem would arise If the second person died while you still owned the house. The law apparently own applies upon death of both parties. So it is my understanding that if one person dies and the second person sold the house there would be no tax. I think this is how it works, or was going to work if the law went into effect. I do not know if it did.

[villages07]

Bump for harleyman.... Thread and post is still here. Hasn't been commented on since your last post, so, if you selected new posts you wouldn't see it in the list of update threads.

You can always go into your profile and view participated/subscribed threads to see those areas you've commented on.