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Episode 78: Wayne Baxter On Cross-Border Wealth Management

Podcast posted on by Evelyn Ackah in Podcast

Episode 78: Wayne Baxter On Cross-Border Wealth Management

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On the Ask Canada Immigration Lawyer Evelyn Ackah podcast, Evelyn talks with Wayne Baxter, a cross-border wealth management expert. Wayne shares his personal immigration story, moving from Canada to the US, and discusses the unique challenges and opportunities that Canadians face when moving to the US with investment assets.

He also talks about the importance of working with tax advisors and the strategies he uses to minimize tax burdens for his clients. Wayne also discusses his podcast, the 3 Questions Webcast series, where he covers various topics related to cross-border wealth management, including estate planning, tax planning, risk management and investing. He emphasizes the importance of education and collaboration with professionals in order to create personalized wealth management plans for his clients.

Connect with Wayne Baxter at One Capital Management.

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Here are the key takeaways from Evelyn Ackah's podcast interview with Wayne Baxter:

  • Wayne's Expertise: Wayne Baxter works with families in the U.S. and Canadian residents with U.S. investments, specializing in wealth management, including capital markets returns, risk management, tax and liquidity management.

  • Personal Immigration Story: Wayne shares his journey from being born in Toronto, raised in Nova Scotia, working in Banff, Alberta, to ultimately relocating to California in 2012.

  • Immigration Path: Wayne's immigration journey involved initially obtaining an E-2 investor visa and later qualifying for a green card under the Exceptional Abilities Program, eventually becoming a U.S. citizen with his family.

  • Insights on Relocation: Wayne emphasizes the importance of consulting immigration lawyers early in the relocation process and highlights the complexity of immigration decisions, suggesting tax advisors as the next point of contact.

  • Integrated Approach: Evelyn acknowledges the significance of considering tax and wealth management alongside immigration decisions, suggesting a collaborative approach among immigration attorneys, tax advisors and wealth managers.

  • Collaborative Decision-Making: Wayne supports the idea of prioritizing consultations with immigration attorneys and tax advisors before delving into long-term wealth management considerations, highlighting the interconnectedness of immigration, tax and wealth management issues.

  • Education and Awareness: Wayne emphasizes the importance of education in financial services, noting the surprising lack of knowledge among many individuals regarding wealth management.

  • Fiduciary Role: As a fiduciary at One Capital, Wayne's primary role is to educate and inform clients, offering fee-only services without earning commissions on investment trades.

  • Customized Solutions: Wayne highlights the need for personalized wealth management plans tailored to each client's unique circumstances and goals, covering areas such as estate planning, tax planning, risk management, investing, credit, real estate and immigration.

  • Focus on Cash Flow: Understanding a family's monthly cash flow is often the starting point for discussions, allowing for a deeper understanding of their financial situation and goals.

  • Collaboration with Tax Advisors: Wayne stresses the importance of working closely with tax advisors, especially in cross-border situations, to ensure comprehensive tax planning and compliance.

  • Cross-Border Expertise: Wayne shares insights into cross-border wealth management and the challenges and considerations involved in relocating to the U.S. or Canada.

  • Insurance and Risk Management: Discussions extend to topics such as property insurance, umbrella insurance, and other risk management strategies to protect clients' assets and mitigate potential liabilities.

  • Podcast Series: Wayne hosts the "3 Questions Webcast Series," covering various wealth management topics and offering valuable insights and advice for viewers. The series covers a wide range of subjects, including estate planning, tax planning, risk management, investing, immigration, and business-related topics.

  • Professional Networking: Wayne underscores the importance of professional networking organizations like ProVisors in facilitating connections and collaborations within the industry.

  • Planning and Preparation: Both Wayne and Evelyn stress the importance of proactive planning and preparation in financial matters, emphasizing the adage, "Those who fail to plan, plan to fail."

    About Evelyn Ackah

    Evelyn Ackah is the Founder and Managing Lawyer at Ackah Business Immigration Law. With offices in Calgary, Toronto and Vancouver, we work with individuals and business owners from all over the world who want to cross borders seamlessly. For more information on immigration to Canada or the United States, Ask Evelyn Ackah at Ackah Business Immigration Law today at (587) 854‑3821 or email Evelyn directly at contact@ackahlaw.com.

    The Ask Canada Immigration Lawyer Evelyn Ackah podcast by Calgary Immigration Lawyer Evelyn Ackah was named #1 Best Canada Immigration Podcast in 2023 by Feedspot.

    BOOK YOUR FREE CASE EVALUATION

    Transcript

    Evelyn Ackah:

    Hi everyone, it's Evelyn Ackah. Thank you so much for joining the Ask Canada Immigration Lawyer podcast. I'm thrilled today to have my dear friend, Wayne Baxter, joining us in LA. Hi, Wayne.

    Wayne Baxter:

    Greetings and salutations from sunny Southern California.

    Evelyn Ackah:

    We have snow here, of course, in Calgary and it's continuing to come down, but I wanted to thank you so much for joining me and our team on this podcast. Really appreciate it. I want to give our listeners some information about you so they have a context of where you're coming from, besides being a fellow Canadian. Wayne works with families-

    Wayne Baxter:

    I brought you a Tim Hortons cup of coffee.

    Evelyn Ackah:

    You know we just moved to a new office and there's Tim Hortons downstairs, it's crazy.

    Wayne Baxter:

    Nectar of the gods.

    Evelyn Ackah:

    You're hilarious. Wayne works with families residing in the U.S. and Canadian residents with U.S. investments and assets. He advises wealthy families on growing, protecting, and ultimately distributing their wealth in an effective and efficient manner according to their personal goals. His efforts aim to optimize the integration of a wealth-managed plan that encompasses the complexities of capital markets returns, risk management, tax and liquidity management that having assets on both sides of the border brings. I know for sure you are the expert to talk to me and my clients about cross-border investments, so thank you so much for joining us, Wayne.

    Wayne Baxter:

    Pleasure. It's a delight to be here, and I'm looking forward to our conversation today, wherever it takes us.

    Evelyn Ackah:

    Wherever it takes us. To the Tim Hortons. Tell me about your personal immigration story? Obviously, first and foremost, we are an immigration podcast-

    Wayne Baxter:

    Oh, boy.

    Evelyn Ackah:

    ... but you were a Canadian and you ended up in California.

    Wayne Baxter:

    Born in Toronto. I was born in Toronto, raised in the Annapolis Valley in Nova Scotia. I worked for six years in Banff, Alberta.

    Evelyn Ackah:

    Nice.

    Wayne Baxter:

    Ended up back in Toronto area. And I could really take over this-

    Evelyn Ackah:

    Keep it short.

    Wayne Baxter:

    Yeah, exactly. I was thinking about this. I'm going to provide you with the Coles notes version now down in the-

    Evelyn Ackah:

    I know the story, I want to know-

    Wayne Baxter:

    I'll give you the Coles CliffsNotes version of what happened. Ultimately what happened was, I met the founder of One Capital Management while I was on vacation in California in 2011, and that conversation ... We naturally started our conversation talking about hockey like any two good Canadian boys would. And when we ended up continuing our conversation, I was spurred on by an article I read in the Wall Street Journal one day while I was waiting for a client to show up talking about how a couple U.S. senators had come up with this bill they were proposing that would allow basically immigrants to immigrate to United States when they were to buy real estate.

    And I read the article and I thought of my friend Don, who had moved from Winnipeg down to LA. And so I reached out to him and said, "How did you move to the U.S. anyway?" And that led to a conversation, and by the time ... More than one conversation, ultimately, he said, "Listen, Wayne, if you'd like to relocate down to the U.S., why don't you come work with us? You can become our cross-border financial advisor." This was after spending two summers in a row renting a house in Malibu. And I must admit, by the end of the second summer I was pretty much-

    Evelyn Ackah:

    Life is hard, isn't it?

    Wayne Baxter:

    ... seduced by the thought of living in that air part of the world. I went, talked to my wife about it and her point of view was rather interesting. She said, "Well, if we don't do this, we're going to spend the rest of our life wondering what if." And then she says, "But besides, if you do fall flat on your face, somebody back in Canada will hire you anyway." So with that kind of a vote of confidence, I felt [inaudible 00:04:07]-

    Evelyn Ackah:

    Wow, what do you have to lose. When was this? When did you make that move?

    Wayne Baxter:

    All took place. It all took place in the summer of July 2012. We crossed the border from Sarnia, Ontario into Port Heron, Michigan, and I'll never forget it. And I'll tell you, if there was a mistake to be made, I was able to find them.

    Evelyn Ackah:

    Back in the day.

    Wayne Baxter:

    I can be the canary in the coal mine here from my client's experience.

    Evelyn Ackah:

    Wow.

    Wayne Baxter:

    Anyway, it ended up with not only a trip across the border from Sarnia to Port Huron, but a second trip across the border. Well, we went to San Diego across the Tijuana and then back across from Tijuana back into the U.S., because we didn't have all of the right immigration documents naturally.

    Evelyn Ackah:

    Yeah.

    Wayne Baxter:

    And anyway, we got that taken care of and that began our journey and it took me from my wife's F1 education visa to ultimately getting an E-2.

    Evelyn Ackah:

    An E-2, yeah.

    Wayne Baxter:

    E-2 investor visa. And then from there I met an immigration attorney here in Encino, California, if I can give his name, John Perry. And John, I told him about my experience and he said, "Well" ... Ultimately what we ended up doing was he took a look at all my experience, my professional experiences, and concluded that I would qualify under the Exceptional Abilities Program. And that's how I ended up being qualified for a green card. And just this past October, myself, my wife and my two children became U.S. citizens.

    Evelyn Ackah:

    Oh my God, that's exciting. I love to hear the story, because it tells us that you can understand what your clients have to go through to get there.

    Wayne Baxter:

    100%. Well, yeah, and again, there's a lot, so many moving parts to that. And again, one of the areas that we do a lot of work with families, with people doing that actual relocation. Either from the United States to Canada or from Canada to the U.S.

    Evelyn Ackah:

    Yeah.

    Wayne Baxter:

    And I always tell people if they're thinking about a relocation, the first person they need to speak to is an immigrant's attorney. Before they speak to ... Number one person. After they get the idea conjured up in their mind, the next conversation should be with an immigration attorney.

    Evelyn Ackah:

    I say that, but I also say tax first, and then wealth management, and then ask, because a lot of things drive the immigration decision.

    Wayne Baxter:

    I could debate that, not that I want to contradict you. But I would think you and the tax person one and two in either order. And once the immigration attorney says, "Yes, we have a pathway that makes sense," and the tax advisor says, "Here's what you need to think about," then you start thinking more longer term and wealth management.

    Evelyn Ackah:

    I hear that. I hear that.

    Wayne Baxter:

    Immigration tax to me are, especially with the folks, the lib clients that we work with, 100%.

    Evelyn Ackah:

    It makes a big difference. Tell us, Wayne about how you got into this cross-border wealth management area? Because it is quite unique. You're my go-to, because not everybody understands both sides of the border for wealth management.

    Wayne Baxter:

    Well, I had the good fortune of meeting the founder of One Capital Management. His name is Don McDonald, who is again, another fellow Canadian who moved from Winnipeg down to Los Angeles and ultimately established One Capital Management back in 2001. And throughout that decade from 2001 through to the end of the decade a firm started working with firms. They were what you would call a fee-only fiduciary portfolio manager. They built investment portfolios on a discretionary basis using individual stocks, bonds, ETFs. And they were doing that here in the U.S. and because of Don's contacts back in Canada they started doing that same work for Canadian clients. First as a sub-advice and ultimately as a portfolio manager registrant. They had the ability to, and their licensing allowed them to basically buy stocks, bonds and ETFs in both countries. When Don met me and given the experience I had working in Canada as a financial advisor for several years, he said, "You could come down here and become our cross-border financial advisor."

    That's ultimately how it all happened. And it's basically a relationship-driven business where the relationships you have with other financial advisors who aren't similarly licensed with immigration attorneys, with CPAs, with estate planning attorneys, I would say being the most often group that will be a good connection or referral source. And they start introducing you to clients that are either they have relocated and they have liquid assets back in the country where they came from, or they're thinking of moving, either again, either they're moving from Canada to the United States because they've been recruited by an employer. A lot of my clients are STEM-based, science, technology, engineering, math professionals. And they get recruited and they decided that they're going to make the move and all of a sudden they're married, they got a house, car, two cars to under grads kids and RSPs and TFSAs and non-registered accounts and who knows what else. And all of a sudden they're thinking about a relocation. And again, lot to think about.

    Evelyn Ackah:

    And it's a lot to think about. What do you think are the unique challenges, Wayne, and maybe the opportunities as well that Canadians face when they're moving to the U.S. with investment assets? They get dinged from a big, big multinational company. There's a lot of them I'm hearing are bringing Canadians down all the way down to Arizona, wherever they're-

    Wayne Baxter:

    The challenges. There are a few, again, I'll highlight a couple here. First thing is, if you have a TFSA, tax-free savings account, and let's say you've been funding it since inception back in 2008, 2009, you probably accumulated a significant amount of money in that plan. Well, as of now, to the best of my knowledge, once you become a U.S. resident, that TFSA loses its tax sheltered benefit. You may not want to keep that in your portfolio. You may not want to keep those proceeds in your TFSA. That's one thing. Another thing that you want to want to think about, and again, depending on the CPA you talk to, and I've heard varying opinions on this, there's something called a PFIX, which are basically the perspective of the IRS is any type of a mutual fund or ETF could be considered basically subject to U.S tax, and then not at a very variable tax rate.

    Now, that's typically in Canadian mutual fund, Canadian ETF, SEG fund. If it's in a non-registered account or a TFSA, passive foreign investment corporation is the actual term. And the short term is PFIC, P-F-I-C. If there's a potential risk that if you don't report that as the proper income, there could be a significant taxation on that. Because typically it will be taxed at like 39%, even if it is a capital, gain by the IRS. There are ways to get around that, which we have basically figured out. Obviously, being Canadians, Canadians are very touchy about currency conversion.

    Evelyn Ackah:

    Yes, we are.

    Wayne Baxter:

    U.S. Financial advisor and they said, "Well, I got a million dollars, I want to transfer from my non-registered account over to you." And the institution in the U.S. is delighted. "Oh, we'd love to have your million dollars." And then the client says, "Well, right now the Canadian dollars at 73.50 U.S. I don't want to convert to U.S. dollars. And that's where the U.S. institution typically will say, "Well, we have to do that conversion."

    Evelyn Ackah:

    Have to at some point. Yeah, you can't keep it Canadian forever, right?

    Wayne Baxter:

    Well, here's the thing. We have the ability at One Capital to actually make that conversion. Make that move of assets from a U.S. Canadian brokerage account to a U.S. brokerage account without converting to U.S. dollars. We have the ability to manage Canadian dollar accounts here in the U.S., I do it all the time.

    Evelyn Ackah:

    That's great.

    Wayne Baxter:

    Anything from cash to a fully invested stock and bond portfolio. And we can also do the same thing the other way around for the American family moving to Canada. And they said, "Well, we're not ready to convert to U.S. Dollars for whatever reason, we can open up a U.S. Dollar account in Canada.

    Evelyn Ackah:

    In Canada. If someone's moving, when do you think is the right time to deal with this kind of conversion or transfer? Because some of our clients might be like, "I'm only going for a year," and others like, "This is a permanent move." What's the ideal timing that makes sense for clients?

    Wayne Baxter:

    It's on a case by case basis, of course. If someone was making a short-term move to the U.S., they knew it was on a temporary relocation, I probably would avoid that. I probably wouldn't bother making that kind of a move if I didn't have to. Again, always consult with the tax advisor first and obviously. But short-term moves, maybe not. If you know that it's going to be or you intend it to be a permanent move, again, the timing of this should be consistent with the tax strategy that your CPA makes. And a lot of times it senses around the calendar.

    Evelyn Ackah:

    Calendar year, yeah.

    Wayne Baxter:

    You want to basically sit with, talk with your tax advisor and say, "My plan is I'm going to relocate to the U.S. before or after July 1st." That seems to be a demarcation line for a lot of CPAs. And obviously, if you're planning on relocating after July 1st, and a lot of times you get a little bit more flexibility before you have to transfer assets between then and the end of the year. But if you're going to move in the first half of the year, then probably you're going to be looking at transferring assets sooner than that. But again, this is where you want to again, collaborate with the CPA and the financial advisor together. They cannot be working in silos. They have to be collaborating together on this type of discussion.

    Evelyn Ackah:

    Okay. No, that's really good information, because some of our clients will ask things like that, and I'm like, "Until you know where you're going to be long-term, just leave it as is as far as," and then-

    Wayne Baxter:

    One of the strategies, this is specifically for California, people moving to California. California, actually the French face tax board in California actually taxes RSPs as if they're individual accounts. FYI only in California of course.

    Evelyn Ackah:

    That means don't move to California, is that what you're saying?

    Wayne Baxter:

    No.

    Evelyn Ackah:

    Leave your RSP's behind.

    Wayne Baxter:

    No, no, no, no, no. You leave the, okay, first start. We're going off into another area.

    Evelyn Ackah:

    That's fine.

    Wayne Baxter:

    I'm not saying that you would catch your RSPs out because you moved to the United States. If you have a significant amount of capital accumulated in your RSPs, it probably makes sense to maintain them. Now what we've done, my wife and I've done, we've actually converted our RSPs to U.S. dollar investment accounts. Even though it's an RSP custody at a Canadian custodian, the investments in the RSP are all U.S. dollar.

    Evelyn Ackah:

    Oh, okay. So that can be done.

    Wayne Baxter:

    But one of the things, for those who maybe don't want to do that for whatever reason, maybe against a currency conversion issue, one of the things that's been suggested by some of the cross-border CPAs I know, is that you basically do a sale of all your assets just before you leave the country and start a new cost basis. So you're not clearing that cost basis across the border with you. You may have RSP accounts in place, and remember in Canada, the investments in there are tax sheltered. There's no risk. So you can sell everything and if you want, you can buy it all back and restart the cost bases just before you cross the border. And that way you-

    Evelyn Ackah:

    Oh my God, look at that. I love it. Very creative. What about an American owner or say families with businesses and other assets and they want to move to Canada, what did they need to think about in terms of their wealth management? Is it-

    Wayne Baxter:

    Well, I'm going to steal some of my previous content here and talk a bit about the tools that we have in Canada that are not available to American taxpayers. And the first one I'll talk about is the TFSA. Yeah. If you're an American coming to Canada, you hear all about this great TFSA program where you can put money in and store it there and take it out, tax-free, put it back in, all of that, which the Canadians have such great benefit of that will not apply if they are a U.S. taxpayer. They'd have to relinquish their U.S. citizenship before they could get advantage to that. That would be one. That would be the one thing.

    Evelyn Ackah:

    You have to become Canadian citizens, Wayne?

    Wayne Baxter:

    No, no, no. It's about the U.S. Remember, when you're a U.S. taxpayer you have exposure to worldwide income.

    Evelyn Ackah:

    Worldwide income. Got it.

    Wayne Baxter:

    You would have to literally relinquish your U.S. citizenship. And I would think that would be kind of over maybe overkill depending on your own personal preferences. Relinquishing your citizenship just so that you can get access to a TFSA might be ... That would be a bit of drastic.

    Evelyn Ackah:

    That would be very drastic.

    Wayne Baxter:

    The other thing, again I'm going to refer back to is the discussion we had earlier about the past of foreign investment corporations. Not only does it apply to a Canadian movie to the US who still has their Canadian mutual funds, ETS segregated funds, it also applies to an American coming to Canada. But now you're in Canada, you're an American citizen. For me, I'm American citizen, now if I move back to Canada, these rules apply to me now.

    Evelyn Ackah:

    But aren't you Canadian still?

    Wayne Baxter:

    Doesn't matter. I'm a U.S. taxpayer.

    Evelyn Ackah:

    Because it's worldwide income. Got it.

    Wayne Baxter:

    I'm a U.S. citizen. There's something else we need to talk about too just before we ... I'll bring it up here in a minute. The passive foreign investment corporations, the mutual funds, again, you got to be very careful if you're a U.S. person that you got to be careful in what you invest in, because you be, again, subject to that passive foreign investment corporation tax issue.

    Evelyn Ackah:

    Oh, god, wow.

    Wayne Baxter:

    The other thing, this has happened, I've seen this happen with clients of mine, home ownership. One of the most beautiful things about living in Canada is that house that you have, and this applies either going any direction here. The home you have in Canada, principal residence of yours that you maybe have owned for many, many years, and maybe you bought it back in 2001 and you paid $250,000 and now you are looking at relocating to the U.S. and the current market says that that same property is worth almost 800, 900, maybe a million dollars. Holy smokes. If you sell that home before you leave the country, you'll pay zero capital gains on it. But if you continue to own that property, all of a sudden real estate, if you're an American citizen owning real estate, you're subject to capital gains tax.

    Evelyn Ackah:

    Gains Tax. Yeah.

    Wayne Baxter:

    Even again, if you're moving across the border from United States to Canada and you buy a property here, understand that you're not going to have that same benefit of a Canadian citizen, Canadian resident with no U.S. tax ties. You can buy a personal residence and now have to pay any capital gains tax. If you move here, even if you decide, I'm moving from California to Alberta or Ontario or Nova Scotia or where it may be. And you decide you're going to put up stakes there, and this is going to be my home forever more, that property, as long as you're a U.S. taxpayer, is going to be subject to capital gains when you sell it. There's an individual tax exclusion of $250,000, but any gains be above and beyond that.

    Evelyn Ackah:

    Oh my gosh wow. Do you do this work Wayne to also help? I know you deal with high net worth clients and some of my clients are too, and they've got wealth that they want to also try to pass down to.

    Wayne Baxter:

    Part of what we talk about is multi-generational wealth transfer. That's a big part of our discussion.

    Evelyn Ackah:

    And so besides the cross border, even the multi-generational wealth and helping the younger generation understand all these issues, do you educate them in this as well or?

    Wayne Baxter:

    Well, in order to proceed, you have to, a client has to be well-informed. Because they're ultimately the ones that are making decisions. You're absolutely right. That's part of the benefit of the Three Questions podcast that we have as you know it.

    Evelyn Ackah:

    Love it.

    Wayne Baxter:

    And you've been a wonderful guest of mine.

    Evelyn Ackah:

    Yeah, it's a great podcast, yeah.

    Wayne Baxter:

    Thank you. Again, education is everything, unfortunately, and it's amazing. I've started in financial services back in October of 1994, it amazes me, and I guess partly that's part of my, maybe some Canadian naivete, I don't know. But it amazes me to this day how uninformed the vast majority of people are when it comes to "wealth management." Important role that we play. And again, as a fiduciary, which when you're with One Capital, we're considered a fiduciary, we're a fee only. We don't make commissions on investment trades. We simply build a client a quarterly advisory fee or annual advisory fee that's quarterly. Our job is to educate and inform our clients. And the way we start that is by asking a lot of questions and gathering a lot of information from them. And trying to find out what it is they want to accomplish. Every individual family and every individual situation is unique, so there's no real cookie cutter solution. We had to basically work on an individual basis and basically devise a plan that's specifically for that particular family or individual.

    Evelyn Ackah:

    Okay, that's fabulous.

    Wayne Baxter:

    And it covers everything. The list, if you will, estate planning, tax planning, risk management, and in the States risk management takes on a new meeting and I can get into that investing obviously. But then on top of that there's credit, there's real estate, immigration for point. These are all things that we literally talk about.

    And really, but it all starts my experience, a lot of this starts with the monthly cash flow of that family. The first one, the first discussions we have is, "How do you spend your money every month? What do you spend it on?" And obviously, you have to understand what kind of incomes they have, how much they've accumulated already. But I mean that's really where it starts. The family and what is it they want to achieve. And so every family, as you can see right from there, when you start talking about individual family cashflow, you look at the neighborhood that you live in, everybody has their own cashflow issues and situation. You can't possibly have a sort of one-size-fits-all solution, for it's impossible-

    Evelyn Ackah:

    That's so great-

    Wayne Baxter:

    Our role is to really understand-

    Evelyn Ackah:

    Because everyone is different.

    Wayne Baxter:

    And everybody has different visions of how they want to see their lives unfold. It's very unique. The fun part of my work is meeting people and learning about their situations and finding out what they want to achieve. For some families, multi-generational wealth planning is super important. And you have other clients who will tell you that they hope that the check to the mortician bounced. I mean, I can go to those two extremes if you want.

    Evelyn Ackah:

    Yeah, I just finished reading a book, Wayne, it's called Die With Zero. I don't know if you've heard about it.

    Wayne Baxter:

    Well-

    Evelyn Ackah:

    No, he's very wealthy. He's very wealthy, wealthy, wealthy. Forget his name, Brad Perkins or something like that. And he's very, very, very wealthy. But his whole philosophy is, give it to your children while they can do things with it. While you're-

    Wayne Baxter:

    A warm hand my client called it.

    Evelyn Ackah:

    Exactly, as opposed to wait until you're gone and then you hand them all these millions and dollars. It's kind of like, help them through life giving to them through the process so that at the end when you're done, there's nothing left to give them predominantly because you've already taught them how to take care of money through their life. It's a pretty interesting book. Listen, I know that you and I both work with tax advisors and tax specialists a lot, because that's not what we are, and I count on that.

    Wayne Baxter:

    I don't play one on TV either like to-

    Evelyn Ackah:

    I don't either. I don't even look like I could be one. I hate taxes, like everybody else. How do you work with your clients to bring in a tax advisor? Do you bring them in? Do they bring their own, do you have them with One Capital?

    Wayne Baxter:

    Absolutely. Okay. So typically it starts with the client and if they have a relationship that they're happy with, and one of the things, again, talking about my cross-border clients, that's a unique skill. Not every CPA is knowledgeable about the other country's tax rules. So if it is a cross-border client, the first thing we'll discuss is whether or not their existing CPA is proficient. If they are, then we're set and we just carry on. It's just important that the client makes the introduction and we can have some working collaboration. If the client's CPA is clearly not able to do cross border tax planning, the options are either A, sync them up with a, let's say it's a Canadian CPA for the sake of this discussion. We'll connect the client with a U.S.-based CPA who will collaborate with the Canadian one.

    Preferably, if you were to ask me if I had my brothers, if you will, I would recommend that the client work with a CPA who is able to do both, it's going to be less expensive because you're not having to pay two CPAs to effectively prepare one tax regime. One tax plan. So having one CPA that typically can understand, and the key part is it can't just simply be someone who can fill in the fields on a tax return. They actually can provide tax advice and direction. Assuming that they have that ability, I would recommend that they work with a cross-border firm. And I have relationships with cross-border tax experts in Canada, and I've also been able to foster a few here in the U.S. Although, I will tell you one of the biggest challenges I had when I first moved down here was finding CPAs that can do both.

    Evelyn Ackah:

    That's what I hear all the time from my clients. So you and I'll have to talk. I need a few of those people on your list. I have some people I refer, but depending on the level of-

    Wayne Baxter:

    I'm happy we can offline, I can make some introductions to folks.

    Evelyn Ackah:

    I would love that the more high network worth, the more sophisticated the advice they're getting needs to be and we want to make sure they're getting good advice. I always say tax drives before I do anything is figure out how you want to deal with your taxes and then I'll tell you how immigration can work. And I guess your real, besides helping your clients with wealth management, you also help them with minimizing the tax burden, right? You obviously know enough to be able to help them work with the accountants and the tax specialists, yeah?

    Wayne Baxter:

    Well, again, again, I'm not a CPA and I always defer to CPAs on this. So my job is to recognize obvious tax issues and then basically alert them and direct them to a CPA. On the investment side I'll share a little bit on that. So we're portfolio managers, and again, we deal with a lot of individual stocks and exchange traded funds. And the key, when you're dealing with a taxable account, which is in Canadian terminology a non-registered account, either it be joint or individual is the tax minimization is all on the way you tax trade a portfolio. So the way, if you have, when you own individual positions, you own individual shares in the company where you own ETFs, it's the ability to basically tax trade that portfolio to minimize the amount of tax the clients face at the end of the year. So there are multiple tax, a lot of people call it tax loss harvesting.

    There's some strategies that you can incorporate where you buy a company that you've liked and think of it's a great company, has great potential going forward, but the shares drop during the year because of conditions beyond its control. And all of a sudden the share price goes from $10 a share to say $7.50. Well, you still like that company, but there are some ways you can actually realize that loss. You can do that as multiple different strategies that you can use in terms of selling the stock, waiting 31 days, buying it back. You can buy proxy positions either in terms of ETFs or other companies or you can just double down and buy more shares of that same company. There's multiple different strategies that you can use to realize that loss so that you may have another company that you really like, but its share price has gone from $10 to $12 and 50 cents or 13 or $14, and you're saying that's getting a very rich, I want to realize some profits.

    Well, now you can take the benefit of that tax loss you've created for the other company that you created at a loss, realize the capital gain and the other position and the client ultimately doesn't have to pay any taxes. That's a very simplistic explanation.

    Evelyn Ackah:

    No, that sounds incredible. You obviously know what you're doing and you love what you're doing.

    Wayne Baxter:

    That's for sure.

    Evelyn Ackah:

    You were just telling me before we got on live that there were some recent changes again to the American tax law?

    Wayne Baxter:

    Oh boy. Yeah. You were going to bring that up. Yeah. The Corporate Transparency Act is this, the big talk for here, and again, it's actually potentially applicable to not just Americans, but it was enacted in Congress. It's called the Corporate Transparency, corporate Transparency Act, or CTA. It was enacted in Congress in January 2021. It's a part of the National Defense Authorization Act. And the real basis of this is focuses on reforming end to anti-money laundering laws here in the U.S. And what it requires, wants to establish is beneficial ownership of corporations. And these would be like LLCs for example, or other similar entities. And so basically what is required is, the owners of these entities, the ones who are the beneficial owners. If you're already on the entity already before the beginning of this year, you have until the end of the year to complete this form that you have to do for, it's basically required by the Financial Crimes Enforcement Network, it's called FinCEN. And it's not just applicable to U.S.-based entities. It could also be related to foreign entities who have established these entities in the United States.

    But you have to have that done. Again, if you've created the entity before the beginning of the year, you have until the end of the year. If you've created an entity within this year, you have 90 days to complete this form. And if you don't, the penalties are, let's just call them punitive.

    Evelyn Ackah:

    I'm going to write this down again. What is it called again?

    Wayne Baxter:

    The Corporate Transparency Act.

    Evelyn Ackah:

    Corporate Transparency Act. Okay. Because I literally just talked to client that just set up a U.S. LLC, like just, I want to make sure she knows-

    Wayne Baxter:

    They should be talking to the attorney.

    Evelyn Ackah:

    Make sure, tell her.

    Wayne Baxter:

    I'm surprised you cannot shake a stick without hanging an attorney talking about the Corporate Transparency Act here. I'm not kidding. It's all buzz here in the U.S.

    Evelyn Ackah:

    I know,

    Wayne Baxter:

    But here's the crazy-

    Evelyn Ackah:

    I was at a ProVisors meeting and somebody was doing a whole presentation about it.

    Wayne Baxter:

    The timing. The timing, this is the fun part. The timing of our discussion today could not have been better, because guess what? Yesterday the U.S. District Court in the district of Alabama declared the Corporate Transparency Act unconstitutional. Now we got people going, "Well, do we have to apply? Do we have to utilize this?"

    Evelyn Ackah:

    Oh, yes, please cover your butt.

    Wayne Baxter:

    Earlier today I had a conversation with a CPA down here in Southern California, and his sagely advice was, you know what? At this time, I would err on the side of caution and proceed as if it is going to be the law.

    Evelyn Ackah:

    It's probably going to go up to maybe Supreme Court, who knows, right? And

    Wayne Baxter:

    We'll see, but better to be or be acted upon, I think is the approach that we should be taking.

    Evelyn Ackah:

    I agree with that. Tell me, Wayne, while we move on to your podcast, because you've been having a very successful podcast for a number of years now, tell us about your podcast and the topics that you cover that are related to Cross Border Wealth Management? And I've been very fortunate to be on your podcast and asked three questions, very pointed.

    Wayne Baxter:

    Yes, yes. And then I asked a couple more, as you may pointed out to me by somebody.

    Evelyn Ackah:

    I love it.

    Wayne Baxter:

    There's more than three questions, Wayne.

    Evelyn Ackah:

    I know you find your way to get all the information.

    Wayne Baxter:

    Again, long story short. I will say that back in the 2000s, I did host a radio show in Toronto for many years on-

    Evelyn Ackah:

    Oh my God, which station?

    Wayne Baxter:

    AM 740.

    Evelyn Ackah:

    Wow.

    Wayne Baxter:

    In Toronto, right on the money it was called. And I love doing that. And so I have a little bit of background in talking into a microphone without getting-

    Evelyn Ackah:

    Of course you do. You're a wiz at this. Wow.

    Wayne Baxter:

    When I went down to the U.S. I thought, I'm not going to get back into that again. And a couple three years ago, I was asked to do some webcasts for a organization back east called the Canadian Entrepreneurs of New England. It was basically four live webinars each an hour long. And I had a gentleman out of New Orleans, good word, out of Las Vegas, who helped me put these together. His name is Lee Petit. Really appreciate Lee to this day. And after we did the last one, he said, you should really be doing these for yourself. Not just doing it for somebody else. I sat down one Saturday afternoon, I made a list of about 50 people that I knew here personally that I've met since I moved to the U.S. and people I've known in Canada for years, and figured what topics we could have.

    And I did a few test runs to see how it would look and talked to the senior management at One Capital Management. They thought it was a great idea. And so we cover surprise, surprise, a lot of wealth management-related topics, estate planning, tax planning, risk management, investing, immigration. I also, because we're dealing with Canadians, relocating to the U.S., I also bring in a lot of business-related topics just to educate Canadians on some of the things they need to think about if they're coming to the US with the intention of starting a new business. I've been with several business professionals and looked at things from many different angles about starting a business, the tax issues, IP patent issues, intellectual property issues, tax segregation. You name it, we put a lot of content in that area to help people bring them up to speed. A lot of the content in the first year was really cross border related, had property and casualty people come on and talk about things that Canadians would not even think about when it comes to owning a home in the U.S. for example.

    It's one thing is that before you buy a house in the U.S., if you're a Canadian, because in Canada we just think about, "Well, I see a house, I want to buy it, and it's on the market. It's all good, just as long as I can negotiate something." Well, one of the first things you do down in the U.S. according to my property and casualty experts, is you got to figure out if this property can be insured.

    Evelyn Ackah:

    Oh, my God. Especially in parts of California, right?

    Wayne Baxter:

    Well, not just California, but yeah, you can mention California as an example. Diane Beatty with CAL Insurance, she did a webcast with me, we talked about that. First thing you got to figure out before you commit, "Is this house insureable?"

    Evelyn Ackah:

    Oh my God.

    Wayne Baxter:

    There's no guarantees that there will be. The other thing that Canadians aren't aware about on that we'll call this under the category of risk management, is Canadians that's the odd Canadian, average Canadian, but umbrella insurance, I'll have no clue what you're talking about. Well, it's super important if you are coming to the U.S., and especially if you have any type of liquid net worth you're bringing with you that you have an umbrella insurance policy, because that's what will effectively protect you from the potential of being sued?

    Evelyn Ackah:

    Oh Lord.

    Wayne Baxter:

    Because if you were sued, and you don't have an umbrella insurance, then that attorney that has been hired will be ... Next thing they'll be looking at will be at your own personal liquid assets. But typically, again, based on the experience I have in dealing with property and casualty, or pardon me, with attorneys that are in that space. They will tell you the first thing they'll look at is, "Do you have insurance?" And they do. They basically just find out what they can get from that insurance policy. Somebody in an accident, they'll typically hire an attorney to represent them, and that attorney will, one of the first questions they'll ask is, and I've seen it happen here recently, where a client of mine was sued and he didn't have any. The first question the opposing attorney asked was, do you have insurance? And this particular client did not, and he just was in the process of hiring me.

    Evelyn Ackah:

    That's painful.

    Wayne Baxter:

    I had a chance to advise him, and this particular lawsuit cost him several hundred thousand dollars that he had to take out of his own personal savings. Whereas if he had paid 500, $600 a year, the umbrella insurance policy, the pay.

    Evelyn Ackah:

    That's so interesting. Well, I think I love your show, and what I love about your podcast too is that I get this email whenever something else comes up. I was telling my team, I said, "This is so great. We need to do this," because we know right away something new has landed and we know what it's about. And so you can take that few minutes to click on it and just watch it.

    Wayne Baxter:

    Here's the news. Here's the big, I guess, breaking news on that. I started this as a YouTube channel primarily. What we're going to be doing, and this is applying to your episode as well, is we are now going to convert all episodes going forward or all episodes we've done to podcasts, and we'll be posting them as well. I'll be letting you know the week your episode is posting as a podcast, so it's going to be on podcasts and YouTube and also-

    Evelyn Ackah:

    That's perfect. We do both. Yeah, we do both. And I think you've got so much good information, Wayne, that it's like you need to share it and get it out there.

    Wayne Baxter:

    Three questions. It's called the 3 Questions Webcast series, folks who are interested. They can go on YouTube and just tap in the number three, 3 Questions Webcast series, and it will come up in all episodes.

    Evelyn Ackah:

    There you come up. Wow.

    Wayne Baxter:

    We just launched our 61st episode-

    Evelyn Ackah:

    Wow.

    Wayne Baxter:

    ... earlier today.

    Evelyn Ackah:

    That's exciting. Congratulations.

    Wayne Baxter:

    Thank you.

    Evelyn Ackah:

    I am so grateful that I got to meet you, one of my first introductions through ProVisors, our professional networking referral group. It's been an incredible period of time, but everybody, when they find out what I do, they say, "Do you know Wayne? Do you know Wayne? Everybody?" I was like, "I know Wayne."

    Wayne Baxter:

    Yeah. ProVisors has been the most incredible organization for me on every different level, and that's how, actually, I didn't mention this earlier, that's how I met John Perry, the immigration attorney that I met.

    Evelyn Ackah:

    That's so great. That's how I met you. That's how I've met so many wonderful colleagues, and so I've been having some of them on, and I'm so excited and happy and very honored that you were able to join today on the Ask Canada Immigration podcast.

    Wayne Baxter:

    Pleasure.

    Evelyn Ackah:

    You're a great interview. I know you have lots of stories. I need to get to LA I think we can have dinner. I'd love to be down there, meet your wife, and bring my husband, and we can have some fun together.

    Wayne Baxter:

    I would love it. I would love it. Love it, love it.

    Evelyn Ackah:

    Thank you you are the best. And I want everybody to know that. If you have questions, feel free to reach out to Wayne directly. We'll make sure when it gets posted on YouTube and on our podcast, we'll have all his contact information as well, as his email address so you can reach out directly. Because you need to know before you make that move cross-border.

    Wayne Baxter:

    100%, Better again, better. Those who fail to plan, plan to fail.

    Evelyn Ackah:

    We have that up in my office here somewhere. Thank you so much, Wayne. I really appreciate it.

    Wayne Baxter:

    My pleasure.

    He also talks about the importance of working with tax advisors and the strategies he uses to minimize tax burdens for his clients. Wayne also discusses his podcast, the 3 Questions Webcast series, where he covers various topics related to cross-border wealth management, including estate planning, tax planning, risk management, and investing. He emphasizes the importance of education and collaboration with professionals in order to create personalized wealth management plans for his clients.


    Evelyn L. Ackah, BA, LL.B.

    Founder/Managing Lawyer

    Ms. Ackah is passionate about immigration law because it focuses on people and relationships, which are at the core of her personal values. Starting her legal career as a corporate/commercial ...

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