Flocking to the southern U.S. this winter?
What Canadian snowbirds need to know before they leave
TORONTO, October 16, 2012 - Before heading off to
the southern U.S. this winter for a long stay, RBC Wealth
Management has advice for Canadian snowbirds to ensure they
take all U.S. tax and estate issues into account. Failing
to adhere to applicable U.S. laws may have serious implications
if not followed carefully.
"Canadians who spend more than four months in the U.S.
every year should file a U.S. tax form each year to avoid
being deemed a U.S. resident for tax purposes," said
Prashant Patel, vice-president, RBC Wealth Management. "In
addition, Canadians who own U.S. real estate should consider
if U.S. estate tax or state probate tax will affect them.
We can help them with strategies that can be employed to minimize
the impact, if any. It is important to consult with a qualified
U.S. tax advisor to discuss all these issues."
Canadian snowbirds should also make sure their affairs are
in order well before they plan their trip. For example, any
Power of Attorney would need to be valid in the U.S. as well
as in Canada. In addition, if a Canadian personally owns U.S.
real estate at the time of their death, their estate could
be subject to U.S. estate taxes based on the market value
of their U.S. real estate.
"After 2012, the maximum U.S. estate tax rate is scheduled
to increase to 55 per cent and the value of a Canadian's worldwide
estate need only exceed US$1 million to expose them to U.S.
estate tax on their U.S. assets," added Patel.
RBC has a U.S. subsidiary, RBC Bank (Georgia), N.A. ("RBC
Bank"), that specializes in meeting the needs of Canadian
snowbirds while they vacation in the U.S.
"Our understanding of the cross-border lifestyle allows
us to build strong relationships and seamlessly manage clients'
banking needs, especially during this important planning stage
as they prepare to travel to the U.S. for the winter,"
said Alain Forget, director, Sales and Business Development,
RBC Bank. "We have a steadfast commitment to serving
our clients and no other financial institution offers our
level of tailored cross-border capabilities."
Aside from tax and estate issues, RBC Bank has compiled a
comprehensive, easy-to-follow checklist of other items snowbirds
should consider, including:
- Identify the most convenient ATM locations where you will
be able to withdraw funds from your U.S.-based account.
- Contact your mobile phone service provider to add international
roaming to your plan or secure a pre-paid phone to be used
in the U.S. only.
- Don't forget to pack your passport, health insurance cards,
RBC Bank Visa debit card and the new RBC
Bank Visa Signature Black credit card, which offers
cross-border benefits ranging from reward opportunities
to travel insurance and even lower foreign exchange fees.
About RBC Wealth Management
RBC Wealth Management is one of the world's top 10 largest
wealth managers. RBC Wealth Management directly serves affluent,
high-net-worth and ultra high net worth clients in Canada,
the United States, Latin America, Europe, the Middle East,
Africa and Asia with a full suite of banking, investment,
trust and other wealth management solutions. The business
also provides asset management products and services directly
and through RBC and third-party distributors to institutional
and individual clients, through its RBC Global Asset Management
business (which includes BlueBay Asset Management). RBC Wealth
Management has more than C$562 billion of assets under administration,
more than C$324 billion of assets under management and approximately
4,300 financial consultants, advisors, private bankers and
RBC Bank has cross-border capabilities which deliver an integrated
online banking capability, known as RBC Access USA, where
RBC accounts can be viewed and transacted on both sides of
the border. RBC Access USA enables real-time, dual currency
transfer of funds between U.S. and Canadian accounts, real-time
balance updates and bill pay in either country. RBC Bank serves
clients in the U.S. through a variety of channels including
online, mail, ATM, in-market relationship bankers and a 24/7
support contact center. RBC Bank clients can also make deposits
through smartphones and personal scanners (Remote Deposit
Capture), and they have unlimited access to all PNC Bank ATMs
with no fees.
For additional information about RBC Bank and its cross-border
services and expertise, please visit www.rbcbank.com
or follow us on Twitter @RBCBank_US.
Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries
operate under the master brand name RBC. We are Canada's largest
bank as measured by assets and market capitalization, and
are among the largest banks in the world, based on market
capitalization. We are one of North America's leading diversified
financial services companies, and provide personal and commercial
banking, wealth management services, insurance, corporate
and investment banking and investor services on a global basis.
We employ approximately 80,000 full- and part-time employees
who serve more than 15 million personal, business, public
sector and institutional clients through offices in Canada,
the U.S. and 51 other countries. For more information, please
- 30 -
For more information, please contact:
RBC Corporate Communications, 416-974-9334