Cover your bases before heading south
If you're heading south, either for the winter or for your family vacation, you'll want to make sure your financial and other affairs are in order before you cross the border. This checklist will help you prepare.
Update your will. Not only is it critical to have a will, it's essential to keep it up to date. While your family is unlikely to need it during your trip south, you shouldn't take the chance.
Give power of attorney to someone your trust. Many people choose to create a power of attorney (or mandate in Quebec) to handle some or all of their personal financial affairs while they're away. Of course, having a power of attorney in place always makes sense to cover situations in which you may be incapacitated.
Get health insurance. An uninsured stay in hospital outside Canada could jeopardize your financial well-being.
Get your finances in order. Make whatever arrangements are necessary to ensure your assets don't go into limbo while you're away. "This might include leaving instructions for reinvestment of any Guaranteed Investment Certificates (GICs) that will be coming due, or arranging for payments out of your Registered Retirement Income Fund (RRIF)," advises Tannis Dawson, CA and Senior Specialist, Tax & Estate Planning at Investors Group.
Be proactive about tax planning. If you spend a lot of time in the United States (generally, more than four months each year) the Internal Revenue Service (IRS) may consider you a U.S. resident. "To be exempted from filing a U.S. tax return, you may need to file a declaration that you are considered a resident of Canada," Dawson adds. The Closer Connection Exemption Statement (Form 8840) is available at U.S. tax offices or from the IRS Web site.
Your Investors Group Consultant can help determine what necessary steps you must take to ensure your financial affairs are in order prior to leaving Canada.
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This article, written and published by Investors Group Financial Services Inc., is presented as a general source of information only and is not intended as a solicitation to buy or sell investments, nor is it intended to provide professional advice including, without limitation, investment, financial, legal, accounting or tax advice. For more information on this topic or on any other investment or financial matters, please contact your Investors Group Consultant.
© Copyright 2007, Investors Group. All rights reserved. Do not reproduce without the express written consent of Investors Group.
