[Friendly Canuck]

I was wondering if anyone could help me.

If in my will - I make my beneficiary or one of them a relative who lives in Canada
What are the tax implications - is it different if I was leaving money to a U.S. CITIZEN
(which I am).

What about property - or a business - are those tax implications different.

If anyone could help I'd appreciate it.

[ebaines]

I am assuming you are a US citizen. If your estate owes taxes (i.e. the value of the assets in your estate exceed the amount of the exclusion , which in 2009 is $3.5M), then your estate will owe taxes regardless of who the beneficiaries are, unless the beneficiary(ies) are your spouse or a 501(c)(3)charitable institution. It does not matter if the beneficiary is a US citizen or not, nor the nature of the asset (business, property, or cash - it's all the same). You may also have estate taxes from the state you live in - it all depends on where you live and where the property is located. This says nothing about whether the heir may owe inheritance taxes - that will depend on the state he/she lives in. I don't know about Canadian inheritance tax laws - sorry.

If indeed the value of your estate is in excess of $3.5M, I strongly suggest that you consult with a qualified estate planner or attorney in your state - estate tax laws are very complicated, and if you make a mistake it can cost your heirs a lot of money, so it pays to get good advice for your particular situation. You should also be aware that the current law actually has the federal estate tax being abolished for 2010, but in 2011 it comes back with a much smaller exclusion ($1M). It's a mess, and this will probably all change in the near future, as congress is unlikely to let this stand as is.

[AtlantaTaxExpert]

ebaines:

I wish I could share your position that Congress is going to change it, but there is every indication that Congress in fact WILL allow the situation stand as scheduled, i.e, have the estate tax "be abolished" for 2010, then be re-instated in 2011.

The Democrats are spending money faster than the U.S. Mint can print it, and they have to get it from somewhere!

[ebaines]

ebaines:

I wish I could share your position that Congress is going to change it, but there is every indication that Congress in fact WILL allow the situation stand as scheduled, i.e, have the estate tax "be abolished" for 2010, then be re-instated in 2011.

The Democrats are spending money faster than the U.S. Mint can print it, and they have to get it from somewhere!

If you're right then there will probably be a few cases of "throw Mama from the train" (or unplug Mama from the ventilator) come December 2010!

[AtlantaTaxExpert]

Had NOT thought of that, but you are probably right!

[Five Rings]

I heard that Congessional intent points to 3.5M for estates and 1M for gifts in 2011.

I heard it through the grapevine.
(not much longer would you be mine
Ohh, I'm just about to lose my mind)