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dropped, from a Canadian tax perspec- tive," she says. However, she says, when people go to invest, even as non-resident aliens, that vacation property is subject to U.S. estate tax when the Canadian citizen or resident passes away. There has always been a migration of people — think Snowbirds — going to the U.S., says Reynolds. When the U.S. dollar was close to $1.60, she says, it was more of a burden for people, as the monthly liability became expensive. Now, not only has the cost of places come down, but the monthly mainte- nance is not as prohibitive. "You kind of have to remember that as the dollar gets better, your investment grows in value, but your liability to pay all these expens- es grows and that becomes really bad in particular if it's mortgaged," she says. "Many smart Canadians have realized that there's a window of opportunity to- day with a strong loonie and a soft U.S. market," says David Altro, senior partner at David A. Altro & Associates LLP, a Florida lawyer and Quebec legal counsel the cost of the Palm Springs or Florida or Arizona condo has dramatically dropped, from a Canadian tax perspective." — ELAINE REYNOLDS, LEGACY TAX & TRUST LAWYERS whose firm specializes in representing Canadians with U.S. assets. As a result, his firm is busy structuring purchases, doing the real estate transactions, and dealing with the tax and debt issues. almost on par, so "Now, they're At the moment, says Altro, if the U.S. property is over $60,000 and worldwide assets are over $2 million, there may be U.S. estate tax when the owner dies, even though the person is a Canadian citizen and resident. The tax is significant, says Reynolds, kicking in at $2 million of value with a top rate of 45 per cent. "If your worldwide assets including your U.S. va- cation home are $2 million or less, you will still be not subject to the U.S. estate tax, because under the formula you'll still get the full credit. When you run into the problem is when somebody's worldwide assets are worth more than $2 million and they have U.S. assets in the mix," she says. A non-resident of the U.S only gets a $13,000 credit, which shelters $60,000 of taxable estate in the U.S., says Reynolds. Canadian residents can claim the unified credit, equal to the greater of $13,000 or the U.S. estate tax on assets of $2 million, multiplied by the value of U.S. assets, di- vided by the value of worldwide assets, according to PricewaterhouseCoopers. The exemption is set to go up to $3.5 Key Developments in Estates and Trusts Law in Ontario, 2008 Edition Madam Justice Bonnie Croll and Melanie A. Yach with contributions from leading practitioners Published annually, this book brings together a team of leading practitioners who together provide expert insight into the latest noteworthy developments in estates and trusts law. Find out how these key developments will affect your practice and your clients, now and in the future. Key Developments in Estates and Trusts Law in Ontario, 2008 Edition – helping you to stay abreast of key statutory and case law developments in estates and trusts law in Ontario Industry leader in legal software for real estate, corporate and estates for over a decade For a 30-day, no-risk evaluation call: 1 800 263 2037 or 1 800 263 3269 www.canadalawbook.ca Canada Law Book is A Division of The Cartwright Group Ltd. Free Shipping on pre-paid orders. Prices subject to change without notice, and to applicable taxes. The choice of 2500 law firms, The Conveyancer generates required documents (including lender forms), tracks undertakings, exchanges data with Teraview® (ON) and SPIN (AB) and integrates with four title insurers. Comprehensive corporate records software tracks changes and generates prescribed forms, registers, ledgers, share certificates, resolutions, minutes, correspondence, etc. Integrated e-filing and extracts. The Estate Administration module automates Rule 74/75 forms plus scores of letters and documents. The Estate Accounting module simplifies recording of financial transactions, and generates reports in "passing of accounts" format. Tel: 416.322.6111 Toll-free: 1.866.367.7648 www.doprocess.com www. CROLL_Key Developments in Estates and Trusts(CL 1-4sq).indd 1 7/7/08 9:11:09 AM Law ye rmag.com A UGUST 2008 63