The Multi-Generational Cross-Border Family
By Bryant Andrus
Profile: The Multi-Generational Cross-Border Family
TL;DR
- One year after the tariff war began, the rules have settled: a 50% inclusion rate, a $1.275 million LCGE, no UHT, a $15 million US exemption and a $40,000-plus SALT cap.
- Families with members in different tax and immigration statuses face coordination gaps, such as a cottage left to a US-citizen child or US real estate held by a Canadian parent.
- The highest-return step is one meeting with US and Canadian advisors at the same table.
If your family spans the border across generations — snowbird parents who winter in Arizona, an adult child in Seattle on a TN or green card, maybe a grandchild born in the US — the past twelve months have likely surfaced more planning questions than any year in recent memory. That’s not a bad thing. Disruption clarifies.
A year ago this month, the tariff war started, the capital gains inclusion rate increase was cancelled, and a federal election was called inside a single extraordinary month. Twelve months later, the planning landscape looks like this: Canada’s capital gains rate is 50%, the LCGE is $1.275 million for 2026, the UHT is gone from 2025 forward. In the US, the estate tax exemption is $15 million per person with no scheduled sunset, SALT is $40,000-plus (rising 1% a year) through 2029, the 1% remittance tax on cash-funded transfers is operative, and the CUSMA review is three months from its deadline.
The Multi-Generational Complexity
Cross-border families with members in different immigration and tax statuses face a coordination challenge that single-household planning doesn’t capture. A Canadian snowbird parent may be getting close to the Substantial Presence Test threshold. An adult child in the US on a green card has a worldwide income obligation to the IRS — and must report any inheritance or gift over $100,000 from Canadian parents on Form 3520. A grandchild born in the US is an American citizen from birth, even if living in Canada, with US filing obligations whenever their income reaches IRS thresholds.
Estate plans that were drafted for a single-country family often fall apart when tested across jurisdictions. A Canadian will that leaves the family cottage to a US-citizen adult child means a deemed disposition at death in Canada and a potential US foreign-bequest reporting obligation (Form 3520) simultaneously. A Canadian parent who dies holding US real estate may owe US estate tax on those assets depending on their overall estate size — because the treaty’s proportional exemption calculation may not fully shelter those assets at higher worldwide estate values.
The One Action That Pays Off Most
The single highest-return action for a multi-generational cross-border family is a coordinated family meeting with both US and Canadian advisors at the same table. Not a separate meeting with each — one meeting with both. The number of planning errors that get discovered in that conversation — and the number of opportunities that emerge — consistently justifies the effort.
Ready to Talk?
Cross-border planning is time-sensitive and highly fact-specific. If any of the topics in this issue apply to your situation, we would welcome the conversation. State Bird Corp specializes in US–Canada cross-border tax, estate, and immigration planning for families and businesses on both sides of the border. Our team works with clients across the US and Canada — wherever your cross-border life takes you.
Sources
- https://www.irs.gov/businesses/gifts-from-foreign-person
- https://www.taxtips.ca/personaltax/us-estate-tax-for-canadians.htm
- https://www.irs.gov/node/151941
- https://www.investmentexecutive.com/industry-news/essential-tax-numbers-updated-for-2026/
- https://farmlaw.ces.ncsu.edu/2025/07/how-the-new-salt-cap-affects-income-taxes/
- https://www.wilsoncenter.org/node/129592
- https://www.ctvnews.ca/politics/article/carney-confirms-liberals-wont-proceed-with-planned-capital-gains-tax-change
- https://www.bnnbloomberg.ca/federal-election-2025/2025/03/23/carney-launches-campaign-with-promise-of-a-tax-cut-call-for-canadian-unity/
Sincerely,
The State Bird Corp Team
State Bird Corp
P: (602) 641-5996 · E: Info@statebirdcorp.com · W: statebirdcorp.com
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State Bird Corp is a management and financial consulting firm. State Bird Corp is not an accounting, legal or investment advisory firm. Cross-border planning is highly fact-specific. The strategies and topics described are general in nature, and readers should consult qualified specialists before taking any action. Any recommendation, inferences, or other guidance contained herein is meant for educational or general purposes and should not be relayed upon as specific advice for any person or business. Consult your legal, tax, and investment advisor for specific recommendation to your situation.