Estates are global, your service should be too

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If estate lawyers assume their client’s assets are housed wholly within a single jurisdiction, they’re thinking in the past. Whatever noise has been made by governments about the retrenchment of globalization, the COVID-19 pandemic has shown just how globalized our world is. Estate lawyers’ work is not immune to these global pressures and Canadian estate lawyers need to know how to navigate the huge complexity created by clients with multijurisdictional assets and other connections.

Margaret O’Sullivan, founder and managing partner at O’Sullivan Estate Lawyers, sees this need among her colleagues and is stepping in to help.  In the webinar, she and a team of her colleagues will break down the challenges created by multijurisdictional estates and some of the key strategies estate lawyers can use to navigate their complexities. O’Sullivan gave Canadian Lawyer a preview of her webinar, discussing some of the pitfalls lawyers can often find themselves in and how she has overcome these complex challenges in practice.

“We're a lot more international in all of our connections today. With that comes the need for estate lawyers to address that,” O’Sullivan says. “When we're doing estate planning, we can't act with domestic blinders on. We have to understand how other laws may impact and how the estate plan may have to account for assets and other connections outside of Canada. We want to ensure that the estate plan will be optimal, but it’s not just an issue of optimization. There could be an actual issue of not meet meeting the professional standard of care required of a lawyer to be competent.”

O’Sullivan says that planning for a multijurisdictional estate must begin with a full understanding of the client’s situation, their assets, and which other laws may apply. For example, it means knowing that French real estate will, in most cases, be subject to a mandatory succession law or that a German resident beneficiary may have to pay inheritance tax in Germany. Many of the issues that arise deal with conflict of law and which law applies to an estate. The issues are as complex and varied as there are jurisdictions so getting the clearest picture of the whole estate early is crucial to navigating these plans successfully.

One of the “sleeper” issues to plan for, O’Sullivan says, is multiple taxation. Inheritance tax is often overlooked when people make decisions around buying property or making investments offshore. O’Sullivan gave the example of a Canadian resident couple who bought a flat in London years ago when their child went to university in the U.K. That flat has since tripled in value since the purchase while the family used it as their Europe travel base. What they didn’t consider, though, was that when they die, that flat has a U.K. tax exposure of 40 per cent with a small exemption. What’s more, the gains on their flat will also be subject to Canadian capital gains tax and no treaty on death offsets that.

At the webinar, O’Sullivan will talk through scenarios just like that and break down some of the strategies lawyers can employ to successfully deal with these issues. The webinar will explore conflict of law issues, the importance of building networks with lawyers and consultants in other jurisdictions that can assist lawyers in protecting their clients.

“I hope attendees can develop a framework to analyze these issues,” O’Sullivan says. “The framework will give them an overview of conflicts of law with regard to succession matters and which laws may apply. It will give lawyers a better understanding of mandatory succession rights, which we don’t have, as well as inheritance and estate taxes which we also do not have. As well, we will look at separate situs wills and powers of attorney and when they are needed.”

Find solutions to complicated foreign estate planning in this free webinar from O’Sullivan Estate Lawyer.