Wills and Canadians owning American real estate

[Heinz57]

My aunt and uncle just bought a house in Arizona. They live 100% in Canada, have no mortgage on the Arizona property, are renting it out and are aware of the taxation requirements. They are rewriting their Canadian wills and have made their wishes known for the disposition of that real estate in the event that one or both of them die. They will be registering their last will and testament with the BC provincial government. Will this Canadian last will and testament be valid in the USA upon the event of one or both of their deaths, or will they have to write and register an American will specifically for the disposition of the American asset?

[philiphodgen]

The Canadian Last Will and Testament will work in the USA. But it will involve a court proceeding in Arizona in the local Probate Courts in order for the heirs to take title to the property. (Translation: time, aggravation, money.) Better to consider using some sort of simple holding structure. The idea for this is not to achieve any particular tax savings because they won't, probably, be designed for that. They're designed to do one thing and one thing only -- when the owner dies, the heirs inherit the asset quickly and without court proceedings.

Ideas we use: trusts, limited liability companies, life estates.

I do this stuff all day every day, so yes I am a lawyer but this is not legal advice and you're not my client, etc. etc. Insert standard disclaimer, waiver, pre-emptive strike, warning shot here.

Find me at hodgen.com or foreignbankaccountamnesty.com or on Twitter at @philiphodgen.

Phil.

[Steven]

Yes it is valid in Arizona and essentially for taxation purposes it will be subject to Canadian tax law because you're all residents of Canada.

You can stick it in a inter vivos trust if you want to avoid Arizona probate court as suggested above, for a simple property transfer where the probate is straightforward though it's a bit of a toss-up as to which method is easier.