INHERIT IRA AND 401k

Canada and the US share one of the world's longest land borders, so it should come as no surprise that individuals immigrate over that border routinely. They often establish roots in one country, and sometimes, the next of kin decide to move for employment opportunities or even for family reasons. You may be surprised to know that Canadian residents can be named beneficiaries of US IRAs and retirement accounts (this is very common). However, there are a few nuances with them, and the case study below illustrates how Sartorial Wealth of Raymond James Ltd. can help.

Beneficiary Designation (The Case Background)

Jack is a senior executive who built a successful career in the US. Jack was widowed many years ago and chose not to remarry. Not having any children, and Jack had named his niece Amanda as the beneficiary of his retirement accounts. Amanda is a Canadian citizen and had only ever visited the US as a tourist.

Beneficiary IRA (The Case Issue)

Jack suddenly and unexpectedly fell ill and ended up passing away. Amanda, while grieving, finds out that her uncle named her as the beneficiary of his IRAs. She is, however, puzzled to learn that, as a non-US resident, her uncle's financial advisor and institution are unable to work with her in any capacity. Given the size of the IRAs, Amanda is rightfully concerned about the amount of tax she will have to pay if she's required to liquidate and close down the accounts.

Cross Border Financial Advisors (The Case Solution)

As registered financial advisors who are licensed in the US and Canada, Sartorial Wealth of Raymond James Ltd. can help. Amanda was surprised to learn that even though she's not an American citizen, she can be named a beneficiary of a US retirement account and be able to defer the tax on the account for an additional ten years under the SECURE act. Amanda can now rest easy knowing that her advisors at Sartorial Wealth can create a disciplined investment strategy and comprehensive financial plan that can consider her cross-border assets and tax complications of inheriting US-based assets.

Feel free to schedule a call and we would be happy to give you a complimentary analysis of your financial situation.

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