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Canadian/Foreign Owner Real Estate Trusts

Many Canadians and other foreign nationals buy real property in California (particularly in the Palm Springs area), either as a vacation home or for investment purposes.  In many cases, it makes sense to hold the real property in a trust.  Sanger and Manes is a leader in establishing real estate trusts for that purpose.

For non-US citizens, the benefits of holding real property in a simple revocable trust are significant.  A revocable trust can avoid a costly and time-consuming probate when the owner dies.  It allows the owner to easily change beneficiaries with a simple trust amendment, rather than having to redraft and resign a Will in Canada or overseas.  Post-death administration of the real estate, whether paying bills or filling property tax exemptions, is usually made easier.  If done properly there should be no adverse tax consequences in the owner's home country.

A revocable trust generally will not protect the owner from US estate taxes.  However, if prepared properly to take advantage of favorable provisions in tax treaties with foreign nations, a revocable trust can have that effect.  The US-Canada tax treaty in particular has provisions that can result in a favorable estate tax outcome for Canadians wtih US assets.  But each tax treaty is different and many countries have no tax treaties with the US at all.  As a result, foreign nationals who own US real estate need estate planing counsel with knowledge of the treaties, as well as how the US estate tax applies to their particular situation.

Sanger & Manes has that expertise. We provide world class services in preparing international estate plans for foreign nationals who own or wish to purchase US real estate or other assets.  We have decades-long experience drafting estate plans under all the major tax treaties, and have a certified speciality in US tax law. Our services include advising foreign nationals of their options, drafting US real estate trusts, and transfering real property to the trusts or other entities under the plan.  Our clientele includes investors and vacation home owners from Canada to Brazil, Europe, India, the Isle of Man.  We have the experience necessary to achieve the goal of reducing estate tax and income tax liability, and the exposure to an audit, for noncitizens with US assets.

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Sanger & Manes, LLP
34100 Gateway Dr, #100

Palm Desert, CA 92211


(760) 422-5751


(760) 320-0351


[email protected]

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