When your life, family, or assets span the U.S. and Canada, a single-country insurance plan can leave a gap — and the tax bill often lands in the wrong currency, at the wrong time, against an asset you didn’t want to sell. We design coverage that fits both tax systems.
You don’t have to be American for the U.S. tax system to reach you. If you own property or investments in the States, spend meaningful time there, or plan to move, your estate can face U.S. tax — payable in U.S. dollars, on a deadline. U.S.-issued coverage funds that exposure exactly where it falls. Below are the situations we see most often; open each for a plain explanation.
Example of needThe U.S. taxes non-residents on their U.S.-situated assets — real estate, and often shares of U.S. companies. Under Article XXIX-B of the Canada–U.S. treaty, a Canadian doesn’t receive the full U.S. exemption, only a prorated share based on U.S. assets as a fraction of the worldwide estate. The larger your global net worth, the smaller that shelter becomes, and the exposed balance is taxed at rates up to 40%. A U.S. policy provides liquidity in U.S. dollars, at the moment it’s needed, so heirs aren’t forced to sell the asset to pay the tax.
Example of needTiming changes everything. When you leave Canada, the CRA generally treats you as having sold your worldwide assets the day before you go — the “departure tax.” A properly structured life insurance policy held before you emigrate is typically outside that deemed disposition, and buying U.S. coverage before you become a U.S. tax resident lets the policy be designed for the system you’re entering, often owned through a U.S.-compatible trust. For a planned move, the right time to arrange U.S. coverage is usually the year before, not the year after.
Example of needBuying a standard Canadian policy can quietly create U.S. problems: the IRS applies a 1% excise tax on premiums paid to non-U.S. carriers, the policy may not qualify as life insurance under IRC § 7702 (which can make its growth currently taxable), and FATCA and FBAR reporting can attach. A U.S.-issued policy usually avoids these frictions. It doesn’t always mean tearing up coverage you already hold — but the next policy decision deserves a cross-border lens, not a single-country one.
Example of needFor high-net-worth families with real U.S. estate exposure and illiquid holdings, premium financing lets a bank carry the premium load so your capital stays invested, with the death benefit sized to the U.S. tax that will actually come due. It’s advisor-led work — loan terms, collateral, the 1% excise tax, and trust ownership all have to be designed up front — but for the right family it’s often the most capital-efficient way to fund an exposure that can’t be covered from cash flow.
The border runs both ways. When a U.S. citizen or resident has debts, family, an estate, or a business in Canada, that exposure sits on the Canadian side — in Canadian dollars, under Canadian rules — and a U.S. policy usually can’t reach it. Canadian-issued coverage puts the money where the liability actually lives.
Example of needCanadian lenders routinely require or bundle creditor life and disability insurance on mortgages, issued by Canadian insurers. It’s cheap, easy, and pays off a Canadian-dollar liability where the debt actually sits. A U.S. citizen with a Canadian mortgage isn’t going to solve that liability with a U.S. policy — the currency, jurisdiction, and payoff mechanics all belong on the Canadian side.
Example of needIf you have a Canadian-resident spouse, Canadian children, or a Canadian estate (RRSPs, TFSAs, provincial real estate), the Canadian side of the estate has its own tax event at death — deemed disposition, RRSP collapse into income, and probate fees. A Canadian-issued policy — often on the spouse’s life or joint last-to-die, and often owned by the spouse — delivers Canadian-dollar liquidity to the right place, at the right time, and generally without dragging the U.S. citizen’s ownership into the FATCA / IRC § 7702 machinery.
Example of needIf the U.S. citizen owns a Canadian private corporation, corporate-owned life insurance generates Capital Dividend Account (CDA) credits, which allow tax-free capital dividends to Canadian shareholders — a uniquely Canadian mechanic that no U.S. carrier replicates.
Cross-border planning is advisor-led by design. The right structure depends on your citizenship, residency, assets, and timeline, and is coordinated with your accountants and counsel on both sides of the border. This page is general information, not tax or legal advice — the references at right are public articles for background reading.
If your life or wealth touches both countries, a short conversation will tell you quickly where the gaps are — and how to fund them in the right currency and jurisdiction.