Cross-Border Probate — US Property in a Canadian Estate

A retired engineer in Oakville dies leaving a $2.1 million Canadian estate plus a small Florida condo bought in 2011 for US$185,000, currently worth roughly US$340,000. His will, drafted in Ontario by an Ontario lawyer, says everything goes to his three children equally. The Canadian executor (the eldest daughter) assumes she can sell the Florida condo and add the proceeds to the Canadian estate. Eight months in, she has discovered that Florida requires its own probate, that the IRS wants a US estate tax return, that the Canadian probate certificate is not accepted at the Broward County land registry, and that her executor compensation does not cover the new legal bill she is staring at.

This is the standard Canadian-snowbird cross-border estate, and the work it generates is well outside the scope of a normal Canadian executor's first administration. This guide walks through what happens when a Canadian estate includes US property — the parallel probates, the US estate tax exposure, the planning tools that simplify the closing, and the professional team that is usually needed. For the broader administration arc, see our pillar on what an executor does in Canada.

What counts as US-situs property #

The IRS's definition of US-situs property is broader than most Canadians expect. The categories that pull a Canadian decedent's estate into US estate tax exposure:

• US real estate — a Florida condo, an Arizona snowbird home, a Maine cottage. Always US-situs.
• Tangible personal property located in the US at death — a car kept at the Florida property, furniture, art.
• Stocks of US corporations — even if held in a Canadian brokerage account. Apple, Microsoft, Berkshire Hathaway, etc. are US-situs.
• US bonds and other US debt obligations — though portfolio interest exemptions may apply.
• Interests in US partnerships — partnership interest with US-situs assets can be US-situs depending on the structure.

The categories that are not US-situs even if owned by a Canadian:

• Stocks of Canadian or foreign corporations held anywhere.
• Cash deposits in US banks — generally not US-situs for estate tax purposes, though the rule has nuances.
• US life insurance proceeds paid to the estate — generally not US-situs.

The US-situs property gets pulled into two parallel processes: the US ancillary probate and the US estate tax calculation.

US ancillary probate #

Real estate is governed by the law of the state where it sits — the doctrine of lex situs. A Canadian probate certificate authorizes the executor to deal with Canadian assets; a US state's probate court authorizes dealings with assets in that state.

The typical sequence:

Step one — primary probate in Canada. The Canadian executor obtains the Canadian probate certificate as usual. The Canadian probate covers the Canadian estate plus the worldwide estate for Canadian tax purposes, but does not authorize action on US real estate.

Step two — engage a US lawyer in the relevant state. Florida, Arizona, California, and New York are the most common states Canadian executors deal with. The US lawyer files the ancillary probate application, attaches the Canadian probate certificate as evidence of authority in Canada, and seeks a US grant or letters testamentary.

Step three — US grant issues. The US court issues either letters of administration (if the deceased's executor cannot or will not serve) or letters testamentary confirming the Canadian executor (or a designated US ancillary executor) as authorized to deal with the US property.

Step four — dispose of the US property. Sale, transfer to a beneficiary, or continued holding. The US lawyer handles the title transfer or sale documentation.

Step five — close the US ancillary file. US estate tax must be addressed (see below). Once the US estate tax position is settled and any creditors paid, the ancillary file closes and the proceeds flow back to the Canadian estate or directly to beneficiaries.

Florida has a streamlined ancillary probate process for non-resident decedents that is faster than full probate. Arizona similarly has simplified procedures. California is more cumbersome; New York and Texas have their own variations.

US estate tax exposure #

This is the part that surprises most Canadian executors. The US imposes estate tax on non-resident decedents on the value of their US-situs property above a tiny exemption — US$60,000 per decedent under the Internal Revenue Code default.^[3]

The Canada-US tax treaty steps in to expand the exemption for Canadians by allowing a unified credit prorated against worldwide-estate value.^[1] The mechanics are complex, but the practical effect — most Canadians with worldwide estates under the US resident exemption (US$15 million per individual for 2026, made permanent by the 2025 One Big Beautiful Bill Act) end up with no US estate tax payable.

But the filing obligation is not avoided. Even where no tax is due, Canadians with US-situs assets above the US$60,000 default threshold must file Form 706-NA within nine months of the date of death to claim the treaty unified credit.^[3] Filing late where no tax is due is generally not penalized in cash terms but creates complications with the IRS clearance needed to transfer the US property.

Three observations are worth pulling out — first, the US$60,000 default exemption is the trigger for filing, not the trigger for paying; second, the treaty does the heavy lifting on actual tax liability for most Canadians; third, the calculation absolutely requires a cross-border tax accountant.

Dual wills — the planning tool #

Where a Canadian owns significant US property, dual wills are often used at the planning stage to simplify the administration:

• The Canadian will governs Canadian-situs assets and is admitted to Canadian probate.
• The US will governs the US property and is admitted to ancillary probate in the relevant US state.

Each will explicitly revokes only prior wills relating to the same jurisdiction's property — never wills relating to the other jurisdiction's property. This avoids the risk of mutual revocation.

Advantages:

• The US will can name a US-resident executor (avoiding non-resident bonding requirements).
• The US will can be drafted in US legal language familiar to the local probate court.
• The US will can include US-specific tax planning (qualified domestic trust provisions for non-citizen spouses, for example).
• Each will can be probated in parallel without one waiting on the other.

Disadvantages — drafting two coordinated wills is more expensive (lawyer fees in both jurisdictions), and the risk of mutual revocation has to be carefully managed.

For Canadians with US property under a few hundred thousand dollars and no complex tax planning needs, a single Canadian will that contemplates the US property is often sufficient. Above that level, dual wills are usually worth the upfront cost.

Non-resident executor issues #

If the Canadian executor is the only executor and the deceased's province treats them as non-resident for the US property's state, there can be friction:

• Ontario non-resident executor bond. A non-resident executor in Ontario must generally post a bond equal to twice the value of the Ontario assets unless they are resident in another Canadian province or a Commonwealth jurisdiction.
• US states with non-resident restrictions. Florida allows a non-resident executor only if they are a blood relative; otherwise a Florida-resident co-personal-representative or curator is required. Some other states have similar rules.

The fix is often to name a US-resident co-executor (for the US ancillary will) or to have a US lawyer act as the personal representative for the ancillary file only.

The Canadian deemed disposition #

Independent of the US estate tax, the Canadian Income Tax Act treats the deceased as having disposed of all capital property immediately before death at fair-market value — the deemed-disposition rule in subsection 70(5).^[4] This includes US real estate.

So the deceased's final T1 reports the capital gain on the Florida condo (FMV at death minus adjusted cost base, with currency conversion at the date of death). The Canadian executor pays Canadian capital-gains tax on the gain at the deceased's marginal rate (50% inclusion rate on the gain, taxed at the deceased's combined federal-provincial rate).

US estate tax (if any) paid on the same property is generally creditable against Canadian capital gains tax under the treaty — preventing strict double taxation, though the mechanics are complex.

The professional team you need #

Cross-border estates need professionals on both sides. The minimum:

• A Canadian estates lawyer for the primary probate.
• A US estates lawyer in the relevant state for the ancillary probate.
• A cross-border tax accountant (one accountant who handles both jurisdictions, or two coordinating accountants) for the Canadian final T1, the estate's T3, and the US Form 706-NA.
• A US-licenced real estate professional if the US property is being sold.

Executor compensation in Canada usually does not scale to cover the work of administering a US ancillary file. Build the additional compensation expectation into the will or be prepared to negotiate with beneficiaries.

For more on the related planning, see Canadians with property in the US and snowbirds and estate planning.

What we focus on at It's Simple Will #

Our app builds Canadian wills for Canadian estates and is not designed for the dual-will scenario. If you own US real estate worth more than a few hundred thousand dollars or have significant US-situs investments, the right path is a Canadian estates lawyer in your province plus a US-side lawyer in the state where the property sits. We can still build the core Canadian will and the Life Discovery Kit at app.itssimplewill.ca — those documents become the foundation, and the cross-border specialist work layers on top. Pair the will with the executor checklist so the Canadian portion of the administration runs cleanly.