Every winter, thousands of Canadians make their way to Palm Springs, Los Angeles, and the broader California sunshine. Some come for a few months. Others buy property, open U.S. bank accounts, and build lives that straddle two countries. What most of them never consider is that when they die — or become incapacitated — two entirely different legal systems will have a claim on their estate. And if those systems are not properly coordinated, the results can be expensive, time-consuming, and deeply unfair to the people they leave behind.

Cross-border estate planning is not a single solution. It depends heavily on your immigration status, the nature and location of your assets, and whether the U.S.-Canada Tax Treaty applies to your situation. Getting the details wrong is not just a paperwork problem — it can trigger taxes and legal complications that a well-structured plan would have prevented entirely.

The First Question: What Is Your U.S. Status?

The single most important factor in U.S. estate planning for Canadians is immigration status. The IRS draws a sharp line between U.S. persons and non-resident aliens, and the planning strategies differ significantly between the two.

If you hold a U.S. green card, the IRS treats you as a U.S. person for estate and gift tax purposes. That means your worldwide assets are potentially subject to U.S. estate tax at death — but you also have access to the full federal exemption, which was raised to $15 million per individual under the One Big Beautiful Bill Act (OBBBA), effective January 1, 2026. Green card holders can generally use a wider range of U.S. planning tools, though the interaction with Canadian tax law still requires careful coordination.

If you are a Canadian citizen without a green card — even if you spend several months each year in California — you are likely treated as a non-resident alien (NRA) for U.S. estate tax purposes. As an NRA, only your U.S. situs assets are subject to U.S. estate tax, but the exemption available to you drops dramatically to just $60,000, unless the U.S.-Canada Tax Treaty applies to increase that amount based on a proration formula.

Why Revocable Trusts Are Not a Simple Fix for Non-Resident Aliens

One of the most common misconceptions in cross-border planning is that a U.S. revocable living trust solves the problem for Canadian snowbirds. For non-resident aliens, this is not accurate. The IRS looks through a revocable trust to its underlying assets, meaning that U.S. situs assets held inside a revocable trust are still counted as part of a non-resident alien’s U.S. taxable estate. The trust wrapper does not provide estate tax protection for NRAs the way it does for U.S. persons.

Additionally, if a non-resident alien dies and leaves assets to a surviving spouse who is also not a U.S. citizen, those assets will not qualify for the unlimited marital deduction — one of the most significant tax benefits available in U.S. estate planning. The marital deduction is only available for transfers to U.S. citizen spouses. For non-citizen surviving spouses, assets must pass through a Qualified Domestic Trust (QDOT) to defer U.S. estate tax, and QDOTs come with their own complexity and ongoing requirements.

What Actually Works: Treaty Planning and Proper Structuring

Effective cross-border planning for Canadians without green cards centers on a few key strategies, each of which must be tailored to the individual’s circumstances:

U.S.-Canada Tax Treaty analysis. The treaty provides a prorated share of the U.S. unified credit to Canadian residents based on the ratio of U.S. situs assets to worldwide assets. For Canadians with significant global wealth, this can substantially reduce or eliminate U.S. estate tax on California real estate and other U.S. holdings. Treaty planning requires documentation of worldwide assets and coordination between U.S. and Canadian advisors.

Careful asset titling. How U.S. real estate is held matters enormously. Options include holding property in a Canadian corporation, a limited partnership, or other structures — each with its own trade-offs involving income tax, California property tax reassessment rules under Proposition 19, and liability protection. There is no one-size-fits-all answer, and the wrong structure can create problems it was intended to solve.

QDOT planning for non-citizen surviving spouses. If your spouse is not a U.S. citizen and you hold U.S. situs assets, a Qualified Domestic Trust must be part of your plan if you want to defer U.S. estate tax on the marital share. A QDOT requires at least one U.S. trustee and ongoing compliance obligations, but it can be an essential tool for protecting a surviving spouse from an immediate and substantial tax bill.
Coordination with Canadian planning. Canada does not have an estate tax, but it does impose a deemed disposition tax at death, treating assets as if sold at fair market value. A cross-border plan must address both the U.S. and Canadian tax consequences of death, as strategies that reduce U.S. exposure can sometimes increase Canadian tax — and vice versa.

The Role of a U.S. Estate Planning Attorney

Cross-border estate planning is one of the most technically demanding areas of estate law. It requires an attorney who understands not only California probate and U.S. estate tax, but also how the U.S.-Canada Tax Treaty interacts with domestic law on both sides of the border. At Kushner Legal Corporation, we work with Canadian clients and their Canadian advisors to build plans that are legally sound, tax-efficient, and coordinated across both jurisdictions.

If you own California real estate, U.S. financial accounts, or other U.S. situs assets, your estate plan needs to reflect the full complexity of your situation — not a generic solution designed for U.S. residents.

Start the Conversation Before the Border Becomes a Problem

Whether you are a Canadian snowbird with a Palm Springs condo, a green card holder who has called California home for decades, or a Canadian citizen navigating U.S. property ownership, the right plan starts with understanding exactly where you stand. We can help you get there.

Contact Kushner Legal Corporation today to schedule a cross-border estate planning consultation at our Beverly Hills or Palm Springs office. We will work with you and your Canadian advisors to build a plan that works on both sides of the border.
Kushner Legal Corporation | Beverly Hills | Palm Springs | 310-279-5166