Below is a continuation of the last two months’ “Estate Administration in 500 Words or …”. The title is meant to illustrate that those very short (30 item) lists that are available on the internet do not contain enough information to properly do the job. We’re only just now getting to the application for probate, the estate information return and the final tax return.
ASSETS – list all real and personal property held worldwide – include real estate, land, timeshares, automobiles, airplanes, boats, artwork, furniture, household goods, jewellery, patents, trademarks, corporations and partnerships – collect any and all debts owed to the deceased – determine if there any outstanding assets from another estate or trust – include assets such as pension plans, DPSPs or RRSPs – transfer title of real estate to either the estate or to your name as executor – consult lawyer if there is any foreign or out-of-province real property – notify any foreign jurisdiction if deceased receive pension (e.g., Social Security – U.S.A.), cancel entitlement and make claim for death benefit, if applicable – keep a record in Estate Account of any interest earned, dividend paid or asset sold
LIABILITIES – notify all mortgage holders (or any holder of any other encumbrance) – subtract only the actual value of any encumbrance on real property from the assets for determining the estate administration tax
DEBTS AND EXPENSES – pay funeral expenses first, then income tax owed before any other debts – arrange payment of mortgage(s), rent, condominium fees, property taxes, utilities – arrange payment of legal, accounting and administrative fees – arrange payment of credit cards, personal loans, lines of credit, and any amounts owing to other creditors – advertise for creditors
CERTIFICATE OF APPOINTMENT OF ESTATE TRUSTEE (“probate”) – determine whether probate is required (real property, shares in a publicly-owned company, large amounts in a financial institution) – consult lawyer if unsure – requires original Will and any codicil, list of deceased’s assets with values as at the date of death, and beneficiaries’ information – consult lawyer for guidance and correct forms – calculate and pay estate administration tax on value of estate assets: $5.00 for every $1,000, or part thereof for first $50,000, plus $15.00 for every $1,000, or part thereof, over $50,000 (Ontario)
ESTATE INFORMATION RETURN – determine due date for Estate Information Return (must be received by Ministry of Finance within 90 calendar days after certificate of appointment issued – include full details of real estate in Ontario (less encumbrances), bank accounts, investments, vehicles and vessels, all property of the deceased which was held in another person’s name, all other property including goods, copyrights, patent, business interests, and insurance proceeds (if no named beneficiary)
CANADA REVENUE AGENCY – obtain “What to do when someone has died” from CRA website – contact a competent professional if unsure/uncomfortable preparing tax returns – advise CRA of date of death – stop payment or transfer to a survivor if the deceased was receiving GST/HST credit, Working Income Tax Benefit, Canada Child Tax Benefit and/or Universal Child Care Benefit payments, or other payments
FINAL TAX RETURN(S) – locate last tax return filed by the deceased – determine due date for the final and any outstanding tax returns – find relevant material such as medical and charitable receipts – prepare and file final income tax return – file any outstanding tax returns within 6 months of the date of death – request and obtain Tax Clearance Certificate (and GST Tax Clearance Certificate if deceased was a GST registrant) after the Notice of Assessment has been received
We haven’t quite finished up the tax area and have yet to distribute anything to the beneficiaries. As you can see, the administration of an estate is not as simple as 500 or even 1,500 words. See you next month for the fourth, and final, part of the list.