There are several strategies and structures for property holdings in the United States, each with its own legal consequences.

Every year, as winter approaches, thousands of Quebeckers head south to Florida. Encouraged by the sun and high temperatures, many of them have purchased property there. However, before making this dream a reality, estate planning should be considered. Settling an estate following death or disability can be both costly and time-consuming.

In Québec, you can avoid court probate proceedings by preparing a notarized will. However, the reality in Florida is different and you may require a probated will from the US Court.

Avoid the probate process

These legal proceedings allow the US courts to validate and authorize the transfer of property to heirs as per the deceased person’s last wishes. In addition to generating fees as high as 3% of the estate’s belongings, selling the property to a third party or transferring it to heirs can take between 9 and 15 months.

The various ownership models

There are several possible ownership models that can help you to circumvent these costs and complications. Here are a few examples:

Revocable trust in Florida

This simple and flexible option facilitates the transfer of the property to heirs by avoiding the probate process. The trust can be modified at any time and adapted to family changes such as children reaching the age of majority or the creation of a blended family. It gives the owner total control, which includes the ability to sell in the event of incapacity without involving the US Courts. The trust can hold several properties in Florida.

The fees payable for setting up a revocable trust are generally lower than those required for probate proceedings. Please note that a T3 Trust Income Tax and Information Return must now be filed with the Canada Revenue Agency.

Joint ownership with a right of survivorship or by married persons

This planning option allows for the automatic transfer of the property to the surviving spouse or co-owner without having to go through the probate process. However, probate cannot be avoided following the death of the spouse or co-owner. This must be explicitly provided for in the property title.

Lady Bird Deed (Enhanced Life Estate Deed)

This option simplifies the transfer of the property to heirs while maintaining the owner’s control by adding the potential beneficiaries to the property title. However, making changes over the years can be difficult. It is not recommended where there are minor beneficiaries or blended families.

Property held by a corporation

Property held by a corporation is rarely recommended where the owner has personal use of the property since there is a taxable benefit for the shareholder. However, this model could be useful where the property is leased.

Planning for profit

Effective planning following the purchase of a real estate property or other assets in the US is required in order to avoid extra costs and undue delays. If you’re an owner who hasn’t taken the necessary steps yet, it’s not too late to act wisely.

By calling on an expert in international taxation who specializes in cross-border estate planning, you can ensure your loved ones will be free of worries.

People have many reasons for becoming involved in a board of directors. For example, some find it an excellent way to contribute to their community’s development through a non-profit organization.

For others, being involved with a foundation is a way to support a cause they believe in. Still others want to either gain new expertise or contribute their knowledge.

However, being a board member is generally so rewarding and prestigious that many people still seek to become board members for the prestige, without asking themselves what they can contribute.

The board of directors plays a crucial role in an organization’s structure and takes on very important responsibilities in respect of that organization. For this reason, each member’s contribution is a determining factor and should therefore be one of the key considerations when deciding to become involved in a board of directors.

Similarly, recruiting board members should not be taken lightly. The organization’s health and sustainability depend on these decisions. As such, the roles and responsibilities of this function must be understood from the outset.

The role of directors and management

The board of directors and management are responsible for an organization’s governance. In defining governance, the Collège des administrateurs de sociétés refers to the International Federation of Accountants’ definition:

The set of responsibilities and practice s exercised by the board and executive management with the goal of providing strategic direction, ensuring that objectives are achieved, ascertaining that risks are managed appropriately, and verifying that the organization’s resources are used responsibly.

Directors therefore play a fundamental role in terms of the organization’s mission and values as well as its strategy, policies and compliance, among many others.

Directors are also responsible for measuring the organization’s results, performance, and compliance with governing legislation and regulations. The board also safeguards the interests of the organization’s members and shareholders.

Management, for its part, handles the organization’s day-to-day activities. It implements the organization’s strategies, manages activities to create value and ensures the organization’s efficiency.

Board members have complementary roles that must be fully understood by the various stakeholders to ensure efficient organizational governance.

The director’s duties

Becoming a board member implies taking on a number of duties that have to be diligently discharged. Board members must be ethical, responsible and, above all, accountable.

They must, therefore, attend meetings and be well prepared in the face of the entity’s challenges. Additionally, they are required to comply with the board’s code of ethics so as to avoid conflicts of interest.

Smaller organizations must very often call upon volunteer directors who should ensure that as directors they are appropriately motivated so they can actively support management in dealing with limited resources and budgets.

Traps to avoid

Too often, organizations have a board of directors where the roles of management and the directors are either not clearly defined or overlap. Such unproductive situations frequently lead to governance and communication problems between the board and management and can significantly hamper the organization’s development.

Additionally, board members are often individuals who, though dedicated, do not necessarily have all the requisite skills to fulfil their mandate. They may have been recruited because someone in management knows them, or because they have voiced an interest or have a specific skill, which does not necessarily mesh with the entity’s strategic directions.

Board members must use judgment and be independent when selecting members.

Ideally, board members should not have similar profiles. A diversity of profiles, experience and expertise promotes discussion and, to a certain extent, a competitive spirit. Selecting board members requires as much care as selecting an organization’s employees.

A preliminary evaluation

There are many ways of assessing a board’s effectiveness. They can serve to determine if the board’s membership is appropriate and if it is operating in an optimal manner.

Members can be assessed by third parties or by a peer review, for example, using anonymous questionnaires in specific contexts.

Such evaluations provide a means for taking the necessary corrective measures and avoiding problems. Additionally, they can help to pinpoint expert profiles that can be called upon to benefit the organization.

In sum, before joining a board of directors, you need to question your motivation, as this will have a direct impact on the organization. Boards of directors, for their part, can use a variety of means to ensure their quality and effectiveness.

The Grant Thornton International IFRS team has published the 2024 edition of Navigating the changes to International Financial Reporting Standards: A briefing for preparers of IFRS financial statements.

The publication is designed to give preparers a high-level awareness of recent changes that will affect companies’ future financial reporting.

This publication covers both new standards and interpretations that have been issued as well as amendments made to existing ones, giving a brief description of each.