Question

Hi, I found your name on a google search and you seem to be the right person to help me with my situation.

I live in Vancouver and my father recently passed away in September. He left me a house (in a revocable trust), his IRA and his Fidelity investment account. The total of these amounts is over $1.5 million.

I don’t plan on moving back to the US and need to know how to handle the accounts. Fidelity said the IRA can stay in the US but the investment account needs to be closed.

I don’t want to trigger any unnecessary taxes by making the wrong move and need some advice on how to properly handle these investments. I’m also curious about any US tax that I may have to pay on these assets.

Is this something you can help with?

Thanks

XXXXXX

Answer

Hi XXXXX

Very sorry to hear about your father.

Definitely a wise move to reach out for some advice especially considering the complexity of the situation. I’ll give you a quick rundown of some of the more important issues below, however we should meet soon to discuss a prospective plan in more detail.

Unless you have a compelling reason to leave the IRA in the US I would suggest moving it up to Canada along with the investment account. It will be much more efficient to have one firm manage the money rather than having the accounts split between Canada and the US. We have access to cross border investment professionals that can help transfer these accounts up to Canada.

I’m assuming that the IRA was transferred down as an inherited IRA to you as the beneficiary. If not please let me know. If this is the case you’ll be able to continue deferring the bulk of the account until such time as withdrawals are made. You’ll likely need to continue taking your father required minimum distributions however.

The regular investment account may be more challenging. We’ll need to review what’s actually contained within the account, but likely US securities such as stocks, bonds and treasuries. Your father’s estate will be responsible for any tax on these assets and you’ll only be taxed on any growth going forward. Also it looks like his estate will be under the estate tax exemption limit, therefore likely no tax on the estate regardless. We can work with the cross border investment advisor to review when and how to liquidate these securities including a review of converting US dollars to Canadian.

The house also presents some challenges as it’s currently in a trust. Depending on who the executor of the trust is there may be additional Canadian and US trust filing requirements. We’ll need to review these potential implications at our meeting.

Once again, the information above is simply general points and we’ll need to gather further information to properly assess tax and investment consequences.

I’ll have my reception reach out to book a meeting and I look forward to seeing you soon.

Cheers

Phil

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