[WSBAPT] Canadian be appointed as a PR or Trustee in US

Tue Feb 14 09:39:30 PST 2023

Carla, and anyone else who has input --

Is the Canadian-resident-fiduciary problem (see thread below) likely to be
a problem even for low-value estates, where there will be no Washington
Estate Tax or US Federal Estate Tax returns needing to be filed?  (Though,
possibly a 1041 Fiduciary Income Tax return, hard to predict on that...)

Will Revenue Canada still need to be dealt with by the Canadian fiduciary,
even in the low-value estate scenario?

Thanks,

Sarah

*Sarah O’Farrell McCarthy*

*(Pronouns: she / her)*Attorney | Kelly, Arndt & Walker, Attorneys at Law,
PLLP
P.O. Box 290 | 6443 Harding Avenue | Clinton, WA  98236

(Located on Whidbey Island, Island County, Washington)
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On Mon, Mar 23, 2020 at 11:22 AM Carla J. Higginson <
carla at higginsonbeyer.com> wrote:

> Garrett indicates that using a Canadian resident (this includes both a
> Canadian citizen and a US person who is resident in Canada) as a PR can
> pull a U.S. estate into the Canadian tax system and this causes the estate
> to have to deal with both the IRS and Revenue Canada.  He says that the
> simple rule is to just not appoint a Canadian resident as a PR.
>
>
>
> ___________________________
>
>
>
> Carla J. Higginson, Attorney
>
> *Higginson Beyer**, P.S.   * [image: cid:image004.png at 01D142F8.438976E0]
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> *From:* wsbapt-bounces at lists.wsbarppt.com <
> wsbapt-bounces at lists.wsbarppt.com> *On Behalf Of *Sarah McCarthy
> *Sent:* Monday, March 23, 2020 7:28 AM
> *To:* WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
> *Subject:* Re: [WSBAPT] Canadian be appointed as a PR or Trustee in US
>
>
>
> Does Garrett share the same concerns for a Canadian PR? Does a Canadian PR
> pull the estate into a foreign tax limbo, too?
>
> Thanks! Very helpful insight.
>
> Sarah
>
> Sent by dictation from my iPhone. Please excuse typos and missing
> punctuation!
>
>
>
> On Mar 22, 2020, at 6:07 PM, Carla J. Higginson <carla at higginsonbeyer.com>
> wrote:
>
> 
>
> According to my law partner Garrett J. Beyer, who is a very experienced
> international and domestic tax attorney who handles many U.S./Canada tax
> matters, the issue with naming a Canadian citizen or Canadian resident as a
> fiduciary (especially if that person is the sole trustee), causes the trust
> to enter the Canadian tax system (meaning it will be subject to paying
> taxes in Canada and possible tax filings in both the U.S. and Canada).
> Also, if the trustee is Canadian, the trust could be considered a “foreign”
> trust from the U.S. standpoint under Treas. Regs. Sec.  301.7701-4, and
> this will require additional reporting requirements and can have adverse
> income tax consequences to the beneficiaries.  It can also potentially
> cause issues with U.S. brokerage companies because of the “foreign” trust
> status.  He says naming a Canadian citizen or Canadian resident as a
> trustee or successor trustee has the potential to become a mess and his
> advice is, “Don’t go there.”
>
>
>
> ___________________________
>
>
>
> Carla J. Higginson, Attorney
>
> *Higginson Beyer**, P.S.   *
>
> <image002.png>
>
> *Friday Harbor Office**:*
>
> 175 Second Street North, Friday Harbor, Washington 98250 | Telephone:
> (360) 378-2185 | Facsimile: (360) 378-3935
>
> *Seattle Office**:*
>
> 701 Fifth Avenue, Suite 5500, Seattle, Washington 98104 | Telephone: (206)
> 623-8888 | Facsimile: (360) 378-3935
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>
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> *carla at higginsonbeyer.com <carla at higginsonbeyer.com>*
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> *HigginsonBeyer.com*
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> *From:* wsbapt-bounces at lists.wsbarppt.com <
> wsbapt-bounces at lists.wsbarppt.com> *On Behalf Of *John J. Sullivan, Esq.
> *Sent:* Saturday, March 21, 2020 2:20 PM
> *To:* 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com>
> *Subject:* Re: [WSBAPT] Canadian be appointed as a PR or Trustee in US
>
>
>
> If the ST is domiciled in Canada, doesn’t that change the situs of the
> trust? If the trust is governed by WA law, perhaps delegate particular
> authority sufficient to establish a U.S./WA situs?
>
>
>
> https://app.leg.wa.gov/RCW/default.aspx?cite=11.98.071
>
>
>
> John J. Sullivan
>
>
>
> *From:* wsbapt-bounces at lists.wsbarppt.com <
> wsbapt-bounces at lists.wsbarppt.com> *On Behalf Of *
> michael at westseattleattorney.com
> *Sent:* Friday, March 20, 2020 12:25 PM
> *To:* WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
> *Subject:* Re: [WSBAPT] Canadian be appointed as a PR or Trustee in US
>
>
>
> Jamia:
>
> So based upon Heather's response, did your Canadian PR get an EIN for the
> Estate and thereby avoid the issue?
>
> Thanks
>
> Mike
>
>
>
> <image001.png>
>
>
>
> -------- Original Message --------
> Subject: Re: [WSBAPT] Canadian be appointed as a PR or Trustee in US
> From: Jamia Burns <jamia at jamiaburnslaw.com>
> Date: Fri, March 20, 2020 11:24 am
> To: "WSBA Probate & Trust Listserv" <wsbapt at lists.wsbarppt.com>
>
> I have had Personal Representative's who reside in BC, Canada and never
> had a problem. I have not had a Trustee in Canada. In my experience, Schwab
> is difficult to work with.
>
>
> Jamia S. Burns
> Attorney at Law
> (360) 739-6379
>
> Office: 1200 Dupont St., Suite 1-D
>
> Bellingham, WA 98225 (By Appointment Only)
>
> Mail: P.O. Box 29453
>
> Bellingham, WA 98228
>
> jamia at jamiaburnslaw.com
>
> www.jamiaburnslaw.com
>
>
>
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>
>
>
>
> On Fri, Mar 20, 2020 at 11:17 AM <michael at westseattleattorney.com> wrote:
>
> Hi:
>
>
>
> Can a Canadian be appointed as a PR or Trustee in US?
>
>
>
> I recall that I was informed by a Successor Trustee that after the Trustor
> had passed a broker (might have been Schwab) had refused to distribute
> money to him saying he had to be a US Citizen.
>
>
>
> If this is current practice, anyway around it?
>
>
>
> Thanks
>
> Mike
>
>
>
> <image001.png>
>
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