Planning Around a Foreign Property Before It Became a Problem

The situation

Maricel, a specialist physician practising in Sault Ste. Marie, and her spouse Abena, who owns and manages several commercial rental buildings in the city, came to Treadstone Law to update wills they had not touched in over a decade. Their estate had grown well past what those old wills anticipated: the medical practice, the rental portfolio, a family home, retirement and investment accounts, and one asset the original wills never mentioned at all — a residential apartment in the Philippines that Maricel had inherited from her mother several years earlier.

The couple's estate, taken together, was worth somewhere in the range of $4.5 million. They wanted their adult son, Kwame, named as executor — the person responsible for carrying out the terms of a will and administering the estate after death. Kwame lived in Ontario, was financially sober-minded, and both parents trusted him. On paper, the plan looked simple. It was the apartment that made it not simple.

What the review found

An executor's authority comes from a grant issued by the court where the deceased lived — in Ontario, that means an application to the Superior Court for a certificate confirming the executor's authority, commonly called probate. That certificate is recognized by Ontario banks, land registries, and financial institutions. It carries no automatic weight in the Philippines, or in any other country. Real property is governed by the law of the place where it sits, not the law of the deceased's home province. An Ontario probate certificate would not, on its own, let Kwame sell, transfer, or even formally deal with the apartment.

Left as drafted, the couple's single combined will would have forced Kwame to obtain an Ontario grant first, then separately retain counsel in the Philippines to start an ancillary process there — proving the same will, or a version of it, all over again in a foreign court, months after the Ontario administration was already underway. Foreign succession processes of this kind routinely take the better part of a year on their own, and they cannot begin until the executor has authenticated documents to present, which in turn depend on how the Ontario will and grant were drafted. Any delay on one side stalls the other.

There was a tax dimension too. Under the Income Tax Act, a Canadian resident is deemed to have disposed of all capital property, including property located outside Canada, immediately before death, at its fair market value. That deemed disposition can trigger capital gains tax on the increase in value of the foreign apartment since Maricel inherited it, payable to the Canada Revenue Agency regardless of what tax, if any, applies in the Philippines. Without planning, that liability would land on the estate as a lump sum, due before Kwame necessarily had access to foreign sale proceeds to cover it.

What we did

1. Mapped every asset by jurisdiction. We built a full inventory of what Maricel and Abena owned, split cleanly between Ontario assets (the practice, the rental buildings, the home, investment accounts) and the one foreign asset, so it was clear exactly what would need to pass through each legal system.
2. Recommended a primary Ontario will plus a limited secondary will for the foreign property. The Ontario will was drafted to govern everything located in Canada and to appoint Kwame as executor with the full authority Ontario law provides. A separate, narrower will was prepared to deal only with the Philippine apartment, so that a foreign grant could proceed on its own timeline in its own jurisdiction, without waiting on or interfering with the Ontario probate application.
3. Built in a revocation clause that protects both documents. The secondary will explicitly revokes only prior wills dealing with the foreign property, not the Ontario will — a common drafting trap when someone signs a second will without care, since a poorly worded revocation clause can accidentally cancel the first will entirely.
4. Connected the couple with counsel in the Philippines. We do not practise law outside Ontario, so we referred Maricel to a local lawyer there to confirm the secondary will would be recognized under Philippine succession rules and to explain what Kwame would eventually need to file.
5. Flagged the deemed disposition liability and discussed funding it. We explained how the Income Tax Act would treat the foreign apartment at death and walked the couple through options — including keeping enough liquid Ontario assets earmarked in the will's instructions, or considering whether the couple wanted to explore selling or restructuring the property during their lifetimes instead. Maricel chose to keep the apartment for now and set aside liquid investments specifically to cover the eventual tax, sized against a conservative estimate of the apartment's accrued gain rather than its current value alone, so the reserve would not fall short if the property appreciated further before either parent died.
6. Briefed Kwame on what the role would actually require. We met with Kwame directly to walk through the difference between his Ontario duties and the separate steps he would need to take abroad, including that he should expect to retain the Philippine lawyer his mother had already identified, rather than searching for one after the fact. We also gave him a plain checklist of documents to gather early — the original foreign will, a certified copy of the death certificate, and proof of his identity authenticated in the form the Philippine process would require — so he would not be assembling that paperwork for the first time while also managing the Ontario administration.
7. Reviewed the powers of attorney alongside the wills. Because Maricel and Abena's existing powers of attorney for property and personal care predated the foreign apartment entirely, we updated both so that whoever they named to act during incapacity had express authority to deal with a foreign asset, not just an implied one that a financial institution might question.

The outcome

Maricel and Abena signed both wills the same week, along with powers of attorney for property and personal care that had also lapsed years earlier. The structure means that when the time comes, Kwame will be able to apply for an Ontario grant on the Canadian estate without it being held up by the foreign property, while the Philippine apartment proceeds through its own succession process in parallel, using a will built specifically for that purpose and reviewed by counsel who practises there. The set-aside investment funds mean the eventual capital gains liability will not force a rushed sale of the apartment or the rental buildings to raise cash.

Nothing about the plan is exotic. It simply matches the legal tools to where the assets actually are, instead of asking one Ontario document to do a job it was never built to do. For a couple whose combined estate had quietly grown to roughly $4.5 million across two continents, that alignment was the entire difference between an executor who can move quickly and one stuck waiting on a foreign court before he can act at all.

What you can learn from this