Appointing an executor that lives outside of Canada brings numerous practical challenges, but more importantly, it can cause significant complications and increased costs for your estate.

The primary problem with a non-resident executor is that it will generally result in the estate being considered and taxed as a non-resident (or foreign) estate. This not only leads to higher tax rates and having to file additional tax returns, it also triggers multiple and complex reporting requirements. Depending on where the executor is resident, there may also be tax obligations triggered in that jurisdiction.

Further difficulties can arise with respect to property transfer tax (PTT) if the estate includes real property located in BC. One such complication comes with the sale of real property by a non-resident seller and the requirement that 25% of the sale proceeds be held back pending issuance of the certificate of compliance from the CRA. Another can be found in the additional PTT payable when a non-resident acquires an interest in real property.

At the end of the day, the simple solution to these and other obstacles is to appoint an executor who is resident in Canada. Want to know more? Call or email us today!

This article is intended for information purposes only and should not be taken as the provision of legal advice. Grace C. Cleveland is a lawyer with the law firm of Cleveland Doan LLP and can be reached at (604)536-5002 or grace@clevelanddoan.com.