Do You Need Two Wills? Cross-Border Estate Planning for Assets in Canada and the US

A will made in Ontario is valid in Florida, and a will made in Florida is valid in Ontario. Validity is not the problem. The problem is administration: a single will covering assets in both countries has to be probated in one jurisdiction and then re-sealed or re-proven in the other, and each jurisdiction's court applies its own procedure, its own fees, and its own timeline to the whole estate. Two wills, each limited to the assets in its own jurisdiction, let each estate proceed independently. The risk is that a carelessly drafted second will revokes the first.

Key takeaways

• One will works but requires probate in the jurisdiction of domicile and ancillary probate (re-sealing or a fresh application) in the other; the second court may require the first's documents translated, certified, and re-proven, and Ontario's estate administration tax may apply to the worldwide estate value.
• Two wills, one for Canadian assets and one for US assets, each executed under the local formalities and each expressly limited to its jurisdiction, allow parallel administration with local executors and local counsel.
• Revocation risk: a standard will begins by revoking all prior wills. A second will with that clause revokes the first. Each will must revoke only prior wills dealing with its own jurisdiction's assets and expressly preserve the other.
• US revocable living trusts avoid US probate entirely for assets titled to the trust and are common for Canadians with Florida property; Canada treats the trust as transparent while the settlor is alive but its Canadian tax status needs review.
• Ontario's multiple-will practice (primary and secondary wills to exclude private company shares from probate) is a separate technique and can coexist with a US will.

Why probate is the issue

Probate is the court process that confirms the executor's authority. In Ontario, it comes with an estate administration tax of about 1.5% of the estate's value; in Florida, it comes with a court-supervised process that takes months and requires a Florida-licensed personal representative or a qualifying relative. A single Ontario will that includes a Naples condo must be probated in Ontario (on the worldwide estate value, including the condo) and then admitted to ancillary probate in Florida, where the Ontario grant is presented and a Florida personal representative appointed. The condo cannot be sold until the Florida process concludes.

Two wills separate the streams. The Ontario will covers the Ontario home, the Canadian accounts, and the RRSP (though registered plans usually pass by beneficiary designation outside the will); the Florida will covers the condo and any US accounts. Each is probated locally by a local executor. The Ontario estate administration tax applies only to the Ontario will's assets.

Drafting the two wills

Each will must be executed under the formalities of the jurisdiction it governs (Ontario and Florida both require two witnesses; Florida wills are typically self-proved with a notarized affidavit). Each will's revocation clause must be limited: "I revoke all prior wills and codicils dealing with my property situated in Florida" rather than "I revoke all prior wills." The two wills should be drafted together by counsel in each jurisdiction who have read the other, so that the residue clauses, the executors, and the guardianship provisions do not conflict. Tax clauses matter: which estate bears the US estate tax on the Florida condo, and which bears the Canadian tax on the deemed disposition.

Revocable trusts for US property

Many Canadians with Florida real estate hold it in a US revocable living trust, which passes the property to beneficiaries on death without Florida probate. For US purposes the trust is disregarded during the settlor's life and the property remains in the settlor's estate for estate tax purposes. For Canadian purposes, a revocable trust is generally treated as a bare trust or as a trust whose income is attributed to the settlor, so the Canadian tax result is unchanged during life, but the trust must be structured so that Canadian tax on the deemed disposition at death and the treaty's estate tax proration are preserved. The trust does not replace the Canadian will.

Beneficiary designations and joint ownership

Registered plans (RRSP, RRIF, TFSA) and life insurance pass by beneficiary designation outside the will in Canada; IRAs and 401(k)s do the same in the US. Joint ownership with right of survivorship passes property outside probate in both countries, but adding a non-spouse joint owner is a gift with tax consequences in both. These tools reduce what the wills need to cover, and they should be coordinated with the wills so that the estate has enough probate assets to pay its taxes.

Estate tax coordination

The wills should specify which assets bear which tax. Canada's deemed disposition tax is a debt of the estate; the US estate tax on US-situs assets (after the treaty proration) is a debt of the estate too. Without direction, the Canadian residue may bear the US tax on a Florida condo that passed to one child, while other children share the residue.

Worked example

A Toronto couple owns a Toronto home, Canadian investment accounts, RRSPs, and a Naples condo, and want everything to pass equally to two children.

• Ontario will. Covers the home and investment accounts; RRSPs pass by designation to the surviving spouse then to the children; primary and secondary wills if there are private company shares. Executor: the surviving spouse, then a child.
• Florida will or revocable trust. Covers the condo; a Florida revocable trust avoids Florida probate; the trust names the children as remainder beneficiaries. Successor trustee: a child.
• Revocation. Each will revokes only prior wills dealing with its own jurisdiction's property and confirms the other.
• Tax clause. The US estate tax on the condo (if any after the treaty proration) and the Canadian tax on its deemed disposition are charged against the condo's share.

Official sources

"Capital property (such as real estate, investments, or personal belongings) owned by the person who died is considered to be disposed of by that person immediately before their death at fair market value." — Canada Revenue Agency, Taxable capital gains on property, investments, and belongings, https://www.canada.ca/en/revenue-agency/services/tax/individuals/life-events/doing-taxes-someone-died/prepare-returns/report-income/capital-gains.html

"An executor for a nonresident, not a citizen of the U.S. must file an estate tax return, Form 706-NA, United States Estate (and Generation-Skipping) Tax Return, Estate of a nonresident not a citizen of the United States, if the fair market value at death of the decedent's U.S.-situated assets exceeds $60,000." — Internal Revenue Service, Estate tax for nonresidents not citizens of the United States, https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax-for-nonresidents-not-citizens-of-the-united-states

Practitioner note

The two-will mistake we see most is a Florida will, drafted by a Florida lawyer who never saw the Ontario will, that opens with a general revocation clause. The client dies intestate in Ontario. The fix is two lawyers who talk to each other, or one firm with both, and a revocation clause in each will limited to its own jurisdiction.

See also: Planning a move? Start with the Canada-to-US tax checklist and browse every corridor by city, province, and state.

Next step

Fairlight prepares the cross-border estate tax analysis that informs the wills, the coordination with counsel in each jurisdiction, and the estate's returns in both countries. See cross-border pricing or book a call.