Elite Money Strategies: 6 Tips for Conquering Cross-Border Wealth Management in Canada and the US!

Elite Money Strategies: 6 Tips for Conquering Cross-Border Wealth Management in Canada and the US!

Moving between the US and Canada entails more than just a change in location, it involves a complex financial transition. Getting the wealth management steps right is crucial when relocating across the border. Here, I’ll share the top six essential tips to streamline asset management and ensure your investments are well taken care of during this cross-border move.

Safeguard Your Assets by Addressing Investment Management:

The intricacies of a cross-border move involve numerous considerations, among which is the management of your investments. Due to regulatory constraints, many investment advisors lack the licensing to oversee your assets once you’ve crossed the border. Consequently, this situation may lead to the freezing or lack of active management of your 401(k) or IRA assets.

Upon updating your address to a Canadian one, you’re likely to receive a notice providing a window of 30–60 days to seek out another advisor or liquidate your account. To navigate this challenge, it’s highly recommended to meet with a dual-licensed advisor prior to your move. This proactive step will allow you to initiate plans for managing both your US and Canadian investments.

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Engage a Cross-Border Wealth Management Firm especially if you have Sizeable Assets:

As your wealth increases, the complexities of a cross-border move amplify. Understanding your available options becomes crucial to prevent unforeseen taxable events. Having a specialized team well-versed in facilitating smoother cross-border moves can ultimately save you valuable time.

Considerations for those with substantial assets include:

  1. Asset Location and Permanent Residency: Understand where your assets are located and where you are deemed a permanent resident to align with respective tax regulations.
  2. Your Legal Status: Determine if you are a US citizen or on a working visa, as this affects your tax and financial planning strategies.
  3. Comprehensive Estate and Financial Planning: Ensure your estate and financial plans encompass income and assets in both countries, addressing the complexities of cross-border wealth management.
  4. Wealth Transfer Strategies: Strategize and plan for the transfer of your wealth to beneficiaries, considering the nuances and regulations of both countries.

Working with a cross-border investment advisor, portfolio manager, particularly when your assets are sizeable (exceed $1,000,000), helps ensures expert guidance in navigating these critical considerations, paving the way for a more seamless cross-border financial transition.

Ensure Compliance with the IRS:

Collaborating with a professional team well-versed in both US and Canadian regulations helps you remain compliant with the IRS and averts costly errors.

The Canada-US Income Tax Treaty serves to prevent double taxation on the same income in the same year across both countries. Ensuring your affairs are in order under this treaty helps alleviate concerns about hefty tax burdens following your move.

For US citizens or green card holders, an annual tax return filing with the IRS for global income is mandatory, regardless of your current residency. Working alongside a cross-border accountant and a dual-licensed financial advisor helps to act as a safeguard against encountering IRS-related issues. Their expertise will help ensure your compliance with IRS regulations and ease any potential tax concerns.

Prevent Unexpected Taxes with Advanced Tax Planning:

To steer clear of sudden tax implications, engage in proactive tax planning. Schedule an early consultation with both a cross-border accountant and a cross-border investment advisor.

During these consultations, delve into the specifics of your situation. This includes an analysis of your investments housed within registered plans like IRAs and 401(k)s as opposed to those in open or non-registered accounts. Additionally, discuss the nuances of your business and personal property details, particularly how these assets will be affected when crossing the border.

Carefully Select Executors ( Avoid choosing Non-Resident Executors ) in Estate Planning between Canada and the US:

Estate planning between Canada and the US introduces additional layers of complexity. As a Canadian resident, it’s essential to consult with a lawyer to update your will specifically for Canada. This step holds significance as using a non-resident as the executor of your will could result in the Canadian Revenue Agency (CRA) considering it a non-resident trust, potentially leading to double taxation.

Moreover, establishing a revocable living trust in the US post-relocation to Canada may introduce further complexities. It’s imperative to note that before initiating any estate planning, seeking guidance from a lawyer is paramount to comprehensively understand and navigate your unique circumstances.

Determining whether you are a Covered vs. Non-Covered Expatriate Status:

As you plan your move, an important consideration arises if you’re contemplating renouncing your US citizenship or giving up your long-term green card holder status. This decision prompts the need to discern whether you fall into the category of a covered or non-covered expatriate.

Understanding your expatriate status holds crucial significance:

  • Covered Expatriate Consideration: If classified as a covered expatriate, you might face the obligation to pay the exit tax, entailing complex tax implications. This tax assessment treats all your assets as if they were sold on the day preceding the relinquishment of your US citizenship or the termination of your visa.

It’s highly recommended to engage with a cross-border accountant to accurately determine whether you are a covered or non-covered expatriate. This proactive step allows for meticulous tax planning to navigate the intricate consequences associated with your expatriate status.

Have Questions? Contact us

We’ve assisted our clients through every stage of life. Even when you’re not aware that something might impact your financial future, it likely will to some extent. Engaging in a conversation with your investment advisor about any financial changes is an excellent approach to keeping your financial goals in focus.

If you’re in the process of planning a cross-border move or have already relocated from the US to Canada and seek assistance in streamlining and enhancing your financial strategies, we’re here to help. We have the expertise in cross-border wealth management. Don’t hesitate to reach out to us — we’re committed to providing tailored solutions for your cross-border financial needs.

For more information or to connect with me, you can reach out via email at macekadmin@iaprivatewealth.ca or get to know me better by exploring my engaging video content on YouTube https://www.youtube.com/@joemacek.

I share valuable insights and discussions on financial planning, market commentary, and investing concepts that can further enrich your understanding. Join me on my channel to discover more!

Don’t hesitate to reach out today at 1–888–324–4259 to discover more about how we can help you achieve your investment milestones.

Joe A. Macek, FMA, CIM, DMS, FCSI

Investment Advisor, Portfolio Manager

iA Private Wealth | iA Private Wealth USA

Toll Free North America: 1–888–324–4259

Email: macekadmin@iaprivatewealth.ca

238 Portage Ave, 3rd Floor

Winnipeg, Manitoba R3C 0B1

26 Wellington Street East, Suite 700

Toronto, Ontario M5E 1S2

iA Private Wealth is a member of IIROC and the Canadian Investor Protection Fund. iA Private Wealth (USA) Inc. is a registered investment adviser with the SEC. This platform is solely for informational purposes. Investing involves risk and possible loss of principal capital. Comments by viewers or third-party rankings and recognitions are no guarantee of future investment outcomes and do not ensure that a viewer will experience a higher level of performance or results. Public comments posted on this site are not selected, amended, deleted, or sorted in any way. If applicable, certain editing of personal identifiable information and misinformation may be deleted. Adviser believes that the content provided by third parties and/or linked content is reasonably reliable and does not contain untrue statements of material fact, or misleading information. This content may be dated. Please visit the following page for further disclosures related to iA Private Wealth (USA) Inc.: www.iaprivatewealthusa.com

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