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…a family member has died?
Losing a family member or a close friend is traumatic. Along with the emotional upheaval, you may find yourself responsible for the financial and legal matters which need to be attended to.
The checklist below will help you through this process. Some of these duties may not apply in your particular situation, but it will keep you from overlooking something important.
- Locate the will, codicils and memorandums and review them to determine instructions re burial, executor, etc.. Most wills are held in a fireproof vault in the lawyer’s office where they were prepared. The lawyer can provide you with notarial copies, but the original Will should be kept in the vault in case you have to apply for probate.
- Arrange organ donation, funeral, burial and memorial. The deceased’s bank will issue a cheque for funeral expenses if there are enough funds in the deceased’s account, once you provide them with a death certificate and the funeral account.
- Take care of heat, lights, water taps and locking of residence.
- If you are the executor of the will, bring the following documents and information to your initial interview with the lawyer you are retaining to settle the estate:
- Death certificate, birth certificate, marriage certificate, marriage contract;
- Funeral account;
- Social Insurance card, Health card, credit cards, membership cards;
- Copies of recent income tax returns;
- Bank books/statements, records of GICs, RRSPs etc.;
- Safety Deposit Box keys;
- Shares, stocks and bond certificates;
- Life insurance policies and annuities;
- Employee benefit plans and pensions, retirement plans;
- House and car insurance policies;
- Drivers Licence and Vehicle Permits;
- Deeds, Mortgages etc. for property owned;
- Uncashed cheques and accounts receivable;
- Unpaid bills and liabilities;
- Records of Canada Pension, Old Age Security or Veterans Benefits;
- Full names, addresses, occupations and birthdates of: Surviving Spouse and Children, Executor and Beneficiaries;
- Comprehensive list of assets and their value at date of death.
- Advise your lawyer if you will be seeking executor’s compensation. The court allows the executor approximately 5% of the estate value as a fee for providing the services of executor. This must be reported on your personal income tax return as income. Inheritances under a will are not considered taxable income in Canada.
- Discuss an estate settlement plan with your lawyer and determine if the will needs to be probated. Any property or financial assets held jointly will usually pass to the survivor without the necessity of probate. Property and assets held in the name of the deceased alone will likely require probate to be dealt with, depending on the requirements of the bank involved. Probate fees are 0.5% on the first $50,000.00 of estate assets, and 1.0% on the remainder. The lawyer’s fee tariff allowed by the court for estates is 3% on the first $10,000.00, 2% on the next $90,000.00 and 1.5% on the remainder.
- Notify the parties below of the death; make arrangements as needed:
- Mail (decide where to redirect – executor’s address; lawyer’s address?).
- Deeds and Mortgages or Leases/Rental Agreements – arrange for appraisal of property owned as of date of death; advise tenants where to send cheques.
- Property tax bills and Property Insurance (vacancy permit required?).
- Water, Hydro, Gas, Cable TV, Telephone, Newspaper Delivery.
- Vehicle Permits and Driver’s License, Auto Insurance (if leased vehicle, cancel lease and get refund of deposit).
- Bank Accounts and Safety Deposit Boxes (locate keys) – if joint, the survivor automatically becomes the owner – deal with pre-authorized withdrawals or post-dated cheques.
- Life Insurance policies and Annuities (if there is a named beneficiary, proceeds are payable directly to the beneficiary rather than the estate).
- Old Age Security/CPP Benefits – deposit cheque for month of death; others must be returned. Apply for CPP death benefit and/or survivor’s benefits for spouse.
- OHIP (Health Card), passports, S.I.N. card, GST, Child Tax Benefit
- Other Health Insurance (ie. Blue Cross).
- Lodges, Societies, Clubs, Alumnae Associations and Unions.
- Credit Cards and other Creditors (notify spouse if joint account).
- Department of Veterans Affairs.
- Have an accountant prepare and file T1 income tax return from January 1 to the date of death – must be filed within 6 months of death or by April 30 of the following year – include income prior to death, capital gains, annuities, rents, dividends, business/partnership income, income from testamentary trust, RSP/RIF/Pension income, interest earned, profit sharing, medical and charitable donation credits, etc. – provide Notice of Assessment to lawyer when received.
- Have accountant prepare and file T3 return each year estate is ongoing (attach notarial copy of Will or probate) – claim CPP death benefit, interest earned, income from annuities, any other income of estate – provide Notice of Assessment to lawyer when received.
- Once the assets have all been transferred or liquidated, your lawyer can assist you with paying the legacies in the Will, and making an interim distribution to the beneficiaries (they will need to sign Release forms to protect you as executor). In consultation with the accountant, you should determine an amount to hold back for possible income taxes or expenses. This money should not be released until all Notices of Assessment and a Clearance Certificate from Revenue Canada have been received. At this time, the beneficiaries should sign a Final Release before receiving their final distribution under the will.