Canada Estate Planning

Some of our clients have large assets in form of real estate or securities investments in Germany and Canada. In the context of a proper estate planning, which is strongly recommended, complex questions arise in respect to the applicable law, a professional and assertive estate planning and the various taxes to be paid. 

It is important here, to examine each single case accurately. The applicable law depends on the respective Canadian province and the form of property (moveable or immovable). However, the last domicile and citizenship of the deceased might also play a role. The matrimonial property regime as well as the substantive law of succession might have a large influence on the economic result of a settlement of an estate.

In addition, in the Canadian ‘common-Law’-provinces the appointment of an ‘administrator’, similar to a German executor of a will, is mandatory. In case the testator has not determined a personal representative by will, the local authorities will appoint an ‘administrator’ who shall be responsible for the management and distribution of the assets in consideration of the provisions stipulated in the last will. 

Finally, the tax aspects should also be considered. Although the Canadian tax system does not provide for an inheritance tax, inheritance is regarded as a ‘sale’ which might be subject to Canadian capital gain tax that is not creditable in Germany and can only be deducted as an estate liability. 

An early analysis of the legal and tax situation alongside with a professional estate planning by experienced experts is decisive to avoid that the ‘Canadian dream’ turns into a nightmare for the heirs and beneficiaries.