Posts Tagged ‘death of a taxpayer’

Death can be sudden, or expected. Death fills us with grief at the loss of a friend or loved one. It can be very stressful for those of us who are charged with the highest of fiduciary duties – being the executor/executrix of an estate.

Your duties are:

  • Bury the dead! Make the arrangements with the undertaker as per the wishes of the deceased.
  • If the will is to be probated, prepare a list of assets and liabilities as of the date of death. This is given to a lawyer who will prepare this for presentation to the probate court. A fee is required.
  • Send copies of the death certificate to employers, pension providers, investment firms and creditors attesting to the death of the person and that you are appointed as estate representative.
  • Check for life insurance policies. Term life or whole life policies should be given copies of the death certificate. The funds (life insurance proceeds) are non taxable proceeds and are the property of the estate for which you are the fiduciary.
  • Make certain that the will you have is the latest will. (I assume that is another reason for having the estate probated as the will must be submitted with the estate holdings).
  • Arrange to dispose of personal assets in an orderly fashion.
  • The funeral director’s fee may be paid before the estate is settled. Check with the estate lawyer however.
  • Take a copy of the will and death certificate to the deceased individual’s bank. The account should be closed and any funds transferred to an estate account. Cheques should be printed in the name of: “The Estate of________”
  • A T1 return (terminal return) needs to be prepared up to the date of death.
  • Any income received post-death form part of the estate proceeds.
  • A T3 trust return for the period post-death to date of settlement of the estate must be prepared.
  • The income taxes due by both the individual and the estate needs to be assessed by the CRA before any beneficiaries can be paid and a TX19 Clearance Certificate issued.

This is a big job. Make sure you understand what you are getting into before you accept the appointment.