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Mark Twain once said ‘A man who lives fully is prepared to die at any time.’ He speaks the truth, especially when it comes to the preparation for the death of a taxpayer. The following are key tips to reduce stress in an already emotionally tiresome situation.
The Key: A Will
A Will is a crucial legal document that can greatly reduce the legal and administrative burden on your family. A valid will allows property to pass on death in a manner other than in accordance with Provincial statutes.
What can the Will do?
Make sure to include in your Will:
Save yourself time with these tips:
Have on hand the Proof of Death Certificates
Ask for multiple copies from the funeral as it is required by organizations you will deal with and the government.
Communicate with Service Canada
If the person was collecting Old Age Security (OAS) or Canada Pension Plan (CPP), make sure to contact Service Canada because payment will be received for the month the person passed away, but amounts paid afterwards must be refunded.
Communicate with the insurance company
Submit a proof of death and appropriate forms straight away to enable the release of the insurance in a few days because life insurance is not subject to probate (procedure of settling the estate of a person who has died)
Prevent fraud by cancelling the Health Insurance and credit cards
Without cancellation, there is the chance of fraudulent use of the deceased’s health care number. There are reports of con artists specifically looking for obituaries for such opportunities.
Address the Deceased’s Creditors
Make the payments from the assets of the estate by opening a special estate bank account. Executors are personally liable for any creditors that have not been paid.
Filing a final tax return
The executor is responsible for arranging the filing of all tax returns. Collect the necessary documentation (T3/T4/T5 slips). There are many more details, but to prevent any additional stress, make sure to contact a professional.
Final (Terminal) Return (from January 1 to date of death) due the later of April 30th of the following year or six months from the date of death.
Previously unfiled income tax returns
File any outstanding income tax returns from previous years.
Rights and things Return
Certain rights and things owing to the tax payer as of the time of death can be claimed as income on a separate tax return. Due at earlier of: 1) 1 year from date of death and; 2) within 90 days after assessment of terminal return.
All things are ready, if our minds be so. Be mindful and be prepared. Follow these simple steps and prevent costly litigation and additional emotional pain.