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If You Live in Canada and Have U.S. Accounts: What Happens When You Pass Away

08.22.25 // Markets & Investing // Blog Article //

Written by Carson Hamill CIM®, CRPC™, FCSI®, Associate Portfolio Manager & Assistant Branch Manager & Dean Moro BComm, CIM®, CRPC™, Associate Portfolio Manager

Dealing with money after someone passes away is never easy. If the person lived in Canada but had U.S. accounts, the process can take longer because the IRS has extra rules.

One big rule: before a U.S. bank or investment firm (like Pershing) can release the funds, the estate may need a special IRS document called a Transfer Certificate.

What’s a Transfer Certificate?

Think of it as a “green light” from the IRS.

It’s the IRS’s way of saying:

“We’ve checked — any U.S. estate taxes have been taken care of, and it’s okay to release the money.”

Without it, the firm holding the account cannot release the funds.

Who Needs One?

A Transfer Certificate is usually required if:

  1. The person was not a U.S. citizen and lived outside the U.S. at death.
    • Example: Pierre, a French citizen living in Toronto, has a U.S. investment account. When he dies, his estate must get a Transfer Certificate before the funds can be moved.
  2. The person was a U.S. citizen living outside the U.S. when they died — even if they were also a Canadian citizen.
    • Example: Sarah, a dual U.S./Canadian citizen in Vancouver, has a U.S. retirement account. Her estate still needs a Transfer Certificate.

Which Accounts Are Affected?

Most personal U.S. accounts, including:

  • Regular investment accounts (single or joint)
  • Retirement accounts (IRAs, Roth IRAs/ 401K, 403B, etc.)
  • 529 college savings plans
  • Trust accounts
  • Custodial accounts for children (UGMA/UTMA)

Tip: If you live in Canada and have an IRA, Roth IRA, or other U.S. retirement account, naming a U.S.-based executor for those accounts can make the process much smoother.

Click here to learn more: "Choosing a U.S. Resident as Your Executor Requires Caution"

When You Don’t Need One

You may not need a Transfer Certificate if:

  • The estate is being handled by an executor based in the U.S.

In the second case, an affidavit may be enough instead of the full IRS process.

What the Estate Has to Do

  1. Confirm the person’s citizenship and where they lived at death.
  2. If a Transfer Certificate is required, follow the appropriate IRS instructions:
  3. Pay any U.S. estate tax owed (if applicable).
  4. Send all required paperwork to the IRS and wait for the Transfer Certificate.
  5. Give the certificate to the U.S. account custodian (i.e. Pershing) along with:
    • Death Certificate
    • Court papers proving who the executor is
    • Executor’s signed letter of instructions
    • Note: Any foreign documents must be translated into English by an accredited translator.

Real-Life Example

John, a Canadian citizen, has $200,000 in a U.S. investment account with Pershing. When John dies, Pershing freezes the account. His executor files Form 706-NA, the IRS confirms no extra tax is due, sends the Transfer Certificate, and Pershing releases the money.

If John had only $40,000 in the U.S. account and was never a considered U.S. person for tax purposes, the executor could send an affidavit instead — no full IRS process needed.

Bottom Line

If you live in Canada and have U.S. accounts:

  • Consider naming a U.S.-based executor for U.S. retirement accounts.
  • Keep a list of your U.S. accounts and tell your executor about this IRS rule.
  • Talk to a cross-border tax professional now to avoid long delays later.

A little planning now can save your loved one’s months of waiting and piles of paperwork later.

About Snowbirds Wealth Management

Gerry Scott is a portfolio manager and founder of Snowbirds Wealth Management, an advisory firm focussed on the cross-border market. Together with Dean Moro and Carson Hamill, associate financial advisors with Snowbirds Wealth Management, they provide investment solutions for Americans living in Canada, and Canadians residing in the United States. Licensed in both Canada and the US, they provide tailored investment solutions to minimize the tax burden when moving assets across borders.

To schedule an introductory call, please click here.

Statistics and factual data and other information are from sources RJLU believes to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities nor is it meant to replace legal, accounting, taxation or other professional advice. We are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The information is furnished on the basis and understanding that RJLU is to be under no liability whatsoever in respect thereof.

Raymond James (USA) Ltd. advisors may only conduct business with residents of the states and/or jurisdictions in which they are properly registered. Investors outside the United States are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this site. Raymond James (USA) Ltd. is a member of FINRA/SIPC.

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