🚀 go-pugleaf

On 5/12/2013 7:08 PM, BT wrote:
> My mother is a US citizen/Canadian resident (in B.C.).  I am a US
> citizen and resident, and will be her sole heir.  Her tax attorney
> suggests placing her house in a trust to avoid probate.  I know this is
> a common strategy in the states, but I don't know what the implications
> are for either my mother's US return (she files in both countries) or my
> eventual inheritance with a Canadian trust.  (FYI, her total estate will
> not approach the US estate tax threshold).  Her tax attorney makes no
> claims re: US taxes.
>
> So, if someone here knows about this, does the trust sound like a good
> plan in this case?  Any red flags here?  Any questions I should put to
> her lawyer before he goes forward with this plan?

Probate fees can be considered a tax, but are not really
onerous.  (1->2%)

Will the lawyer's fees for setting up the trust and other
recurring administration fees (costs of annual tax filings etc.)
exceed the proe costs?

In article <kmr2o1$nci$1@dont-email.me>,
 Alan Bowler <atbowler@thinkage.ca> wrote:


> Will the lawyer's fees for setting up the trust and other
> recurring administration fees (costs of annual tax filings etc.)
> exceed the proe costs?

It appears that the fee to establish the trust will be less than half of 
the eventual probate costs--it's a fairly pricey house.  The trust seems 
like a good idea in those terms--what I am concerned about is how the US 
views the Canadian trust.  I would hate for this to either trigger an 
immediate US capital gain for my mother, or somehow complicate my 
eventual inheritance (and tax basis) of the house.

Thanks very much for your reply.

On 13/05/2013 10:04 AM, Alan Bowler wrote:
> On 5/12/2013 7:08 PM, BT wrote:
>> My mother is a US citizen/Canadian resident (in B.C.).  I am a US
>> citizen and resident, and will be her sole heir.  Her tax attorney
>> suggests placing her house in a trust to avoid probate.  I know this is
>> a common strategy in the states, but I don't know what the implications
>> are for either my mother's US return (she files in both countries) or my
>> eventual inheritance with a Canadian trust.  (FYI, her total estate will
>> not approach the US estate tax threshold).  Her tax attorney makes no
>> claims re: US taxes.
>>
>> So, if someone here knows about this, does the trust sound like a good
>> plan in this case?  Any red flags here?  Any questions I should put to
>> her lawyer before he goes forward with this plan?
>
> Probate fees can be considered a tax, but are not really
> onerous.  (1->2%)
>
> Will the lawyer's fees for setting up the trust and other
> recurring administration fees (costs of annual tax filings etc.)
> exceed the proe costs?

Good reply.

But I might add in family dynamics.  It is much easier for a legal mess 
and spurned family to get a lawyer and screw things up when using a 
standard will and probate courts. It is easier to dispute in a probate 
court than with trust laws.

Trusts have the advantage of being harder to break from the original 
intent.  If in a trust, it was done while the person was alive, it 
becomes much harder to mess with.

But costs, as you point out are a real determining factor.  You are not 
going to do the trust for a $200k estate, but for $22M and lots of 
relatives, you sure would be advised to look at a trust as an option.
-- 
Liberal-socialism is a great idea so long as the credit is good and 
other people pay for it.  When the credit runs out and those that pay 
for it leave, they can all share having nothing but debt and discontentment.