To effectively handle international assets in a New Brunswick estate plan, you should generally use a “situs Will” specifically for your foreign property. Since the Canada Revenue Agency (CRA) taxes your worldwide income upon death, planning carefully with a local lawyer ensures your global assets avoid cross-border probate delays and double taxation.
Owning a winter home in Florida or inheriting family property overseas is a wonderful asset, but it creates significant legal complexities when planning your estate. Many residents of New Brunswick assume that their standard provincial Last Will and Testament will automatically cover their condo in Mexico or their bank accounts in Europe. Unfortunately, this is rarely the case, as different countries have vastly different inheritance laws.
When you pass away, attempting to use a New Brunswick Will in a foreign jurisdiction often leads to massive legal hurdles, translation costs, and years of delays in a foreign court. 📍 Furthermore, the CRA treats your worldwide assets as having been sold at fair market value upon your death, triggering potential capital gains taxes. In this guide, we will explore the steps to secure your international wealth and simplify the estate administration process for your loved ones.
Step-by-Step Process in New Brunswick
Proper international estate planning is highly specialized. You must navigate the rules of the Probate Court of New Brunswick alongside the property laws of the country where your assets are located. Here is how most estate administrators handle the process.
Step 1: Inventory Your Worldwide Assets
The first step is to create a comprehensive list of everything you own outside of Canada. 📝 This includes foreign real estate, international bank accounts, offshore investment portfolios, and business interests. You must identify exactly how these assets are currently titled, as joint ownership rules in a foreign country might completely bypass your Will.
Step 2: Consult a Local Estate Lawyer
You cannot effectively plan a cross-border estate alone. You need to hire a New Brunswick estate lawyer who understands Canadian tax implications and can coordinate with legal counsel in the foreign jurisdiction. They will review your current plan and ensure that creating a new foreign Will does not accidentally revoke your Canadian Will.
Step 3: Draft a Concurrent “Situs” Will
The most common strategy is to draft a separate Will (a situs Will) in the country where the foreign asset is located. 🏘 For example, you would have one Will strictly governing your house and bank accounts in Moncton, and a second Will drafted by a local lawyer in Florida governing your vacation condo. This prevents your Executor from having to translate and drag your New Brunswick Will through a foreign court system.
Step 4: Align with CRA Tax Requirements
Canada does not have an estate tax, but the CRA does tax capital gains on worldwide assets via “deemed disposition” at death. Your estate plan must ensure there is enough liquid cash available in your Canadian accounts to pay the CRA tax bill for your foreign properties. Furthermore, your Executor must accurately report these foreign assets on your final tax return.
How Much Does it Cost in New Brunswick?
Coordinating an international estate plan requires paying legal professionals in at least two different countries. 💵 Here is a breakdown of the estimated costs in Canadian dollars (CAD).
| Type of Expense | Estimated Cost (CAD) | Details |
|---|---|---|
| New Brunswick Lawyer Fees | $800 – $2,500+ | Drafting a complex primary Will and coordinating with foreign legal counsel. |
| Foreign Legal Fees | $1,000 – $3,000+ | Drafting the concurrent situs Will in the foreign jurisdiction (varies heavily by country). |
| New Brunswick Probate Tax | 0.5% over $20,000 | New Brunswick charges $5 per $1,000 of estate value over $20k, plus baseline fees. |
| Cross-Border Tax Advice | $300 – $600 / hour | Consulting an accountant to navigate CRA foreign property reporting and avoid double taxation. |
While the upfront planning costs are substantial, they are a fraction of the legal fees your beneficiaries would face if they had to probate a single Canadian Will internationally. Proper planning preserves your wealth.
How Long Does the Process Take?
Structuring an international estate plan typically takes between 2 to 4 months. ⏳ The timeline depends on how quickly your New Brunswick lawyer can communicate with the legal professionals in the foreign country to ensure both Wills complement each other perfectly. If your Executor has to actually probate an unplanned international estate after your death, the process can easily drag on for 2 to 5 years.
Frequently Asked Questions (FAQ)
Does a New Brunswick Will cover property in the USA?
While a valid Canadian Will is technically recognized in the US, using it requires a complex process called ancillary probate. It is generally much faster and cheaper to have a separate US Will that strictly governs your American assets.
Will my estate pay taxes twice on foreign property?
Canada has tax treaties with many countries (like the US and the UK) to prevent double taxation. Usually, the foreign tax paid on the asset can be claimed as a foreign tax credit against the CRA taxes owed, but proper accounting is required.
What happens if I don’t report foreign property to the CRA?
If you own foreign property costing more than $100,000 CAD and fail to file a T1135 form while alive, the CRA can issue massive financial penalties. Upon your death, your Executor will inherit a bureaucratic nightmare trying to clean up the tax file.
Does the Probate Court of New Brunswick charge fees on foreign real estate?
Generally, New Brunswick probate fees are calculated on the value of all personal property wherever situated, and real property located specifically within New Brunswick. Foreign real estate is usually excluded from the provincial probate fee calculation, but you should verify this with your lawyer.
Can my New Brunswick Executor handle my foreign assets?
Some jurisdictions have strict rules requiring an Executor to be a local resident. If your brother in Fredericton is your Executor, he may not be legally allowed to administer a property in Florida without hiring a local agent. A situs Will solves this by letting you name a local Executor for that specific region.
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