Navigating the aftermath of a loved one’s death can be a daunting task, especially when faced with various administrative and legal responsibilities. This guide aims to provide clarity on both tax and non-tax aspects that arise when someone passes away in Canada.
Non-Tax Aspects of Death
Immediate Actions to Take Following a Death
Notification of Authorities and Loved Ones:
- If the death was unexpected or occurred at home, a medical professional or the police should be contacted to officially pronounce the death.
- Inform close family members and friends.
If the deceased was traveling or on a work assignment, it’s essential to notify the respective travel company or employer.
Steps to take when handling a death abroad:
- Secure an official death certificate from the country where the death occurred.
- Ensure it’s translated into English or French.
- Plan for the transportation of the remains back to Canada.
Legal and Administrative Measures
Will Verification: Determine if the deceased left behind a will. If no will exists, an application to the court is necessary to appoint a personal representative to manage the deceased’s affairs.
Identifying Key Personnel: Ascertain and inform the designated liquidators or executors.
Last Wishes: Familiarize yourself with the deceased’s final wishes, including any pre-existing funeral, burial, cremation, or organ donation plans.
Death Registration: Ensure the death is registered with the provincial government.
Institutional Notifications: Inform institutions like Service Canada, CPP/QPP, employer pension administrators, Veterans Affairs Canada, financial institutions, utilities companies, and landlords.
Cancellation of Documents: Cancel the deceased’s SIN card, provincial health card, passport, and driver’s license.
Probate Consideration: Determine if probate should be applied for.
Document Collection: Secure copies of all crucial financial and non-financial documents, including deeds of major assets, life insurance policies, contracts, mortgages, and loans.
Tax Aspects of Death
For the Deceased: File the final tax return, which should include all income earned from January 1 until the date of death, as well as any accrued gains and the value of any RRSP/LIRA/RRIF/LIF.
For the Estate: The estate’s tax return should include income earned and capital gains realized during its taxation year.
For the individual:
- Death between January 1 to October 31: April 30 of the following year.
- Death between November 1 to December 31: 6 months after death.
- If death occurred before the standard April 30 deadline and the return for the previous year hasn’t been filed: 6 months after death.
For the estate:
- Filing Deadlines: 90 days after the taxation year-end date.
Asset Identification: Be vigilant about locating assets such as:
- Investments in private and public company shares, partnerships, and life insurance.
- Real estate, artwork, jewelry, rare books.
- Intangible assets like copyrights, patents, and trademarks.
- Digital assets, including cryptocurrencies and non-fungible tokens.
- Other assets like Aeroplan points, jointly held assets, and assets located overseas.
Seek Expert Guidance
The responsibilities following a death are numerous and can be overwhelming. While this guide offers a comprehensive overview, each situation is unique. For personalized advice and assistance, please don’t hesitate to contact us. We’re here to support you during these challenging times.