Avoiding a Florida Probate Trap for an Ontario Couple's Estate

The situation

Marek, a retired professional engineer, and Piotr, a retired software developer, had spent the winters of their working years at a condo they bought outright in Florida more than a decade earlier. By the time they came to Treadstone Law they were both fully retired and living in Welland, with a paid-off home, a mix of registered and non-registered investments, and the Florida property still held in both their names. Together the estate was worth somewhere between roughly $1.7 million and $1.9 million, once the condo, the house, and their savings were added up.

They had not come in because of a crisis. A friend of theirs had died the previous year owning a similar condo in Arizona, and the friend's family spent close to a year and several thousand dollars dealing with a probate process in a US court before the property could be sold or transferred. Marek and Piotr's daughter, Mai, who would likely end up handling their estate one day, had asked them directly whether the same thing would happen to her. Neither of them knew the answer, and their existing wills — drafted more than fifteen years earlier by a general practice lawyer, before they bought the condo — had never been updated to account for owning property outside Canada.

What the review found

The review turned up two separate problems layered on top of each other, and both traced back to the same root cause: the Florida condo was real estate located in the United States, and US law treats real estate within its borders differently from almost anything else in a Canadian resident's estate.

The first problem was procedural. A will written and probated in Ontario has no authority over land sitting in Florida. On the death of the surviving spouse, the condo would need to go through its own probate proceeding in a Florida court, administered under Florida law, typically requiring a lawyer licensed in that state. That process runs independently of, and in addition to, whatever happens with the rest of the estate in Ontario — different court, different timeline, different fees, and in the meantime the property is effectively frozen and cannot be sold or transferred.

The second problem was a tax exposure almost nobody expects. The United States imposes an estate tax on the value of US-situated property owned by a deceased person, and for non-resident aliens — which is what Marek and Piotr are, from the US government's point of view, despite being Canadian citizens who have never lived or worked in the US — the amount of value that passes tax-free is dramatically smaller than the exemption available to US citizens and residents. The Canada-US tax treaty softens this considerably: it allows a Canadian resident's estate to claim a share of the larger US citizen exemption, calculated in proportion to how much of the deceased's worldwide estate is located in the United States. But claiming that treaty relief is not automatic. It has to be elected properly, on time, with the estate's full worldwide value disclosed and documented — something that becomes far harder to assemble accurately after a death, under time pressure, from Ontario.

Left as it stood, on the second death the family would have been facing an unplanned Florida probate, a US estate tax return that might or might not have been filed correctly, and real uncertainty about how much tax, if any, would actually be owed. None of that was written down anywhere for Mai to find.

What we did

1. Confirmed the actual exposure before recommending anything. We had the Florida condo's current market value estimated and combined it with an inventory of the couple's other assets to calculate their worldwide estate value and the share of it sitting in the United States. This is the number the treaty election depends on, and getting it wrong in either direction either overpays for coverage that is not needed or leaves a real gap.
2. Coordinated with a Florida-licensed estate lawyer. Ontario lawyers are not permitted to give advice on US property law or US tax law, and Ontario wills cannot control US real estate on their own. We brought in Florida counsel to prepare a secondary will limited to the couple's US-situated assets, drafted to work alongside their new Ontario will rather than accidentally revoking it — a real risk when two wills are prepared without coordination, since a poorly worded new will can unintentionally cancel an earlier one.
3. Rebuilt the primary Ontario will and powers of attorney. The old will predated the condo entirely and named an executor who had since moved out of the country. We prepared updated wills for both Marek and Piotr naming each other as primary executor and Mai as alternate, along with updated powers of attorney for property and personal care, which had never existed at all.
4. Documented the treaty position in advance. Rather than leaving the estate tax treaty election to be assembled after a death, we prepared a structured file recording how the worldwide estate value was calculated, what portion sat in the United States, and what the resulting treaty-adjusted exemption would look like under current rules. That file sits with their estate documents so that whoever is filing on the second death — likely a cross-border accountant working with Mai — is not starting from nothing.
5. Reviewed ownership structure and recommended a change on the second death. The condo was held jointly between Marek and Piotr, which is efficient on the first death since ownership simply passes to the survivor without probate on either side of the border. The exposure arises on the second death, when the property passes to their children. We discussed alternatives, including selling the property before then or transferring it into a structure designed to sit outside probate on that second transfer, and the couple decided to revisit the question closer to when it becomes relevant, now that they understood the tradeoffs.

The outcome

Marek and Piotr left the engagement with a coordinated set of documents that had not existed before: an updated Ontario will for each of them, a matching Florida will limited to the condo, current powers of attorney, and a treaty documentation file that turns a scramble into a checklist. The strategy worked exactly as intended — on the second death, the Florida will lets the condo move through a Florida probate that is narrower and faster than what would otherwise have applied, running in parallel with, rather than tangled up with, the Ontario estate administration. The treaty election groundwork means the estate tax exposure, which could otherwise have come as an unpleasant and expensive surprise, is instead a known and manageable number.

Just as importantly for the couple, Mai now has a clear picture of what she is dealing with if she ends up administering the estate. She knows a US lawyer is already identified, she knows roughly what to expect financially, and she is not starting from the position their friend's family was in — discovering the problem only after it was too late to plan around it.

What you can learn from this