The Florida Condo That Almost Cost Her Sister Twice

The situation

Minh ran a small delivery and courier business out of Newmarket, driving a share of the routes herself while two part-time drivers covered the rest. She and her spouse Taras, who worked as a bookkeeper for a handful of small local clients, had never gotten around to writing wills. Their first child was on the way, and Minh's business had finally started paying her a steady wage after three lean years, so the couple booked a call with Treadstone Law to put a plan in place before the baby arrived.

On the intake questionnaire, Minh mentioned almost as an afterthought that she owned a share of a condo in Florida. Her late father had bought it decades earlier as a winter retreat, and when he died it passed to Minh and her sister Iryna as joint owners, each holding an equal, undivided interest with a right of survivorship, meaning that if one of them died, her share would pass automatically to the other rather than through her will. The condo was modest, worth roughly $180,000 in Canadian dollars at current exchange rates, and the sisters used it a few weeks a year and rented it out the rest of the time through a local property manager.

Minh assumed the condo was a minor detail. It turned out to be the most consequential item in her entire estate plan.

What the review found

Canadians who own real estate south of the border are often surprised to learn that owning US property can trigger US estate tax, a tax charged by the US federal government on the value of certain property a person owns at death, separate and apart from anything owed to Canada. For US citizens and residents, a very large exemption shields most estates from this tax entirely. For non-resident aliens, meaning Canadians who are neither US citizens nor US residents, the exemption is dramatically smaller, and it applies specifically to property considered US-situs property, which includes real estate physically located in the United States.

A properly drafted Canadian will does nothing to address this. Wills govern Canadian assets and generally distribute property under Canadian law, but a US-situs asset like Minh's share of the Florida condo sits outside that framework and is exposed to US tax rules on its own terms, regardless of what a Canadian will says. The Canada-US tax treaty offers some relief for Canadian residents, allowing them to claim a larger effective exemption proportional to the size of their worldwide estate, but claiming it requires specific elections and detailed reporting on a US estate tax return, not something that happens automatically.

The bigger complication was the ownership structure itself. Because Minh and Iryna held the condo in joint tenancy, Minh's interest would pass directly to Iryna on Minh's death without going through Minh's estate, and vice versa. That structure had made sense when their father set it up to avoid probate, the court process that validates a will and confirms an executor's authority. But it meant Minh had no ability to leave her share of the condo to Taras or their future child. It also meant that whichever sister died first would trigger a US valuation of the entire property, not just the deceased's half, since joint tenancy property is often treated differently for US estate tax purposes than property held as tenants in common, where each owner holds a separate, distinct share that passes through their own estate.

Once the numbers were run, the exposure was real but manageable if handled properly, and genuinely costly if ignored. Left as it stood, Minh's death could trigger a US filing obligation and a modest but unwelcome tax bill payable in US dollars before her Canadian estate could even distribute what remained, all while her family was still grieving and Iryna was left holding an outright interest in a condo Minh's own household had helped pay for over the years.

What we did

1. Mapped the full ownership picture before touching the will. Our team obtained the original deed and title history for the Florida condo, confirmed the joint tenancy structure, and calculated each sister's contribution to the purchase and ongoing carrying costs over the years, since that history mattered for what came next.
2. Explained the tradeoffs plainly to Minh and Taras. Selling the condo outright would eliminate the US tax exposure entirely but meant losing an asset the family valued and giving up a source of rental income. Restructuring the ownership could reduce the exposure while keeping the property in the family, but it required Iryna's agreement, since she was a co-owner with her own interests to protect.
3. Opened a conversation with Iryna, not a demand. Iryna had no lawyer of her own involved at first and, understandably, was wary of any change to an arrangement her father had set up. We prepared a short, plain-language summary of the US estate tax issue for Minh to share with her, framing it as a shared problem rather than something Minh was trying to extract from her.
4. Proposed converting the joint tenancy to a tenancy in common. This change alone let each sister leave her share to whomever she chose in her own will, rather than automatically to the other, and meant a US valuation on one sister's death would only apply to her own share of the property rather than the whole. Iryna, once she understood the change did not affect her ability to keep using the condo, was open to it, but she also raised a fair concern: she wanted more certainty that she would not eventually be forced into a sale by Minh's estate if Minh died first.
5. Negotiated a buy-sell framework alongside the ownership change. After several rounds of discussion, once Iryna retained her own independent lawyer to review the terms, the sisters agreed that Minh's estate would have the option, but not the obligation, to sell her share back to Iryna at fair market value within a set window after Minh's death, rather than Iryna being forced to buy or Minh's estate being forced to sell to an outside party. This gave Iryna the security of keeping the condo in the family if she wanted it, and gave Minh's estate liquidity if her share needed to be converted to cash to cover any US tax owing.
6. Drafted Minh's will to address the US property specifically. Rather than leaving the condo interest to fall under a general residue clause, the will named the asset directly, addressed how any US estate tax arising from it should be paid from the estate generally rather than reducing what any one beneficiary received, and included the information Minh's future executor would need to make the treaty election on a timely basis.
7. Flagged the filing obligation for the future, not just the present. We advised Minh and Taras that whoever acted as executor when the time came would likely need to coordinate with a US-qualified tax preparer to file the required US estate tax return, since Canadian estate lawyers are not licensed to file US tax documents, and left a clear note in the file explaining why that step could not be skipped even if the tax owing turned out to be small.

The outcome

The final arrangement was not everything either sister might have wanted going in. Minh gave up the automatic right of survivorship that would have let her simply inherit the whole condo if Iryna died first, and Iryna gave up the simplicity of an arrangement her father had set up and never expected to be renegotiated. But both sisters kept what mattered most to them: Minh's share could now pass to Taras and their child instead of vanishing into Iryna's estate, and Iryna kept the option to hold onto the family property without a stranger's estate lawyer showing up as a future co-owner.

The buy-sell option added a layer of legal cost neither sister had budgeted for, since it required drafting and each side retaining separate counsel to review it. It also meant the condo's future was now tied to a formal agreement rather than an informal family understanding, which took some adjusting to. But the alternative, an unaddressed joint tenancy colliding with a US tax filing obligation years down the road, would have cost far more in both money and family strain, arriving at the worst possible time.

Minh and Taras left with wills that actually reflected what they owned, a note in their file for whichever executor eventually handled the estate, and a sister who, once she understood the stakes, became a willing partner in solving the problem rather than an obstacle to it.

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