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

[Heather de Vrieze]

In my experience, any fiduciary who does not have a US taxpayer ID number will run into issues serving as Personal Representative or Trustee. If they need to get a tax ID number for the estate or trust, they need to list their own. Also, establishing a bank account for the estate is problematic enough for out of state fiduciaries, out of Country much more so.

Heather

Heather S. de Vrieze
Attorney-at-Law
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3909 California Avenue SW
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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Sarah McCarthy
Sent: Tuesday, February 14, 2023 9:40 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>; carla at higginsonbeyer.com
Subject: Re: [WSBAPT] Canadian be appointed as a PR or Trustee in US

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
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On Mon, Mar 23, 2020 at 11:22 AM Carla J. Higginson <carla at higginsonbeyer.com<mailto: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.    [cid:image003.png at 01D9405B.DAA4B810]
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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto: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<mailto: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<mailto: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

carla at higginsonbeyer.com<mailto:carla at higginsonbeyer.com>
HigginsonBeyer.com

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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto: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<mailto: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<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of michael at westseattleattorney.com<mailto:michael at westseattleattorney.com>
Sent: Friday, March 20, 2020 12:25 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto: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<mailto:jamia at jamiaburnslaw.com>>
Date: Fri, March 20, 2020 11:24 am
To: "WSBA Probate & Trust Listserv" <wsbapt at lists.wsbarppt.com<mailto: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<mailto:jamia at jamiaburnslaw.com>
www.jamiaburnslaw.com<http://www.jamiaburnslaw.com>

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On Fri, Mar 20, 2020 at 11:17 AM <michael at westseattleattorney.com<mailto: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

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