Death, Taxes and Getting Organized - Presley & Partners - Presley & Partners

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July 6th, 2016

Death, Taxes and Getting Organized

Shirley M_E5Q9697Shirley McIlroy, Accountant

Prepare Now to Save Others Stress Later

Death and taxes – there’s no escaping either.

And when it comes to a combination of the two, well, it’s a subject few like to dwell upon. However, there are many tax-related things to consider in that situation. A bit of preparation now can save your loved ones a lot of work and distress later.

Get organized now (because it’s way harder to do when you’re dead)

Consider making a list of all your financial accounts: bank and investment accounts, TFSAs, RRSPs, RIFs and credit cards. Do you have a safety deposit box? Where is your will or life insurance policy? Do you have a lawyer, power of attorney and/or a representation agreement? Making a list of all your important contact numbers – doctor, accountant, landlord, Veterans Affairs’ person, even neighbours – can also be helpful.

Your executors will also need various government documents, such as a copy of your last income tax return filed, birth certificate, social insurance number, veterans’ card number. And if you’ve prepaid any funeral or cremation services, include that information along with any receipts for payment.

What if you’re the executor of an estate?

It’s a big job but there are many websites, including Canada Revenue Agency (CRA), that can help. You’ll need to file the final personal tax return in the year following death, either April 30th or six months after the date of the death (if that date is past April 30th). If the deceased was carrying on a business during the year of death, the dates may be different.

You’ll need to send a copy of the death certificate, the social insurance number, a complete copy of the will and any other legal documents, such as a grant of probate, to CRA. You may also want to send in a copy of the T1013 that authorizes your representative (usually an accountant) to deal with CRA on your behalf – be sure to have this form signed by all the executors! Consider including a brief letter stating what you’re requesting (up-date records, authorize the representative, etc.).

That final personal tax return will include all income received up to the date of death – CPP, OAS, pension amounts, rental income, personal business or employment income, interest and dividends. As well, you’ll have to consider any assets the deceased may have held such as non-registered investments, real estate, balances in RRSP or RIF accounts.

If things get complicated, seek help. This is definitely not the time to go it alone.

Shirley McIlroy is an accountant with Presley & Partners, CPAs and Business Advisors, in Courtenay, BC. She can be reached at 250.338.1394 or smcilroy@presleyandpartners.com .