Wills, notification of death and probate

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optionable68
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Re: Wills, notification of death and probate

Post by optionable68 »

AltaRed wrote: 16 Oct 2017 16:09 I would think it odd though that any deceased would have zero assets at time of death. There would have likely been some possessions, perhaps a final CPP and/or OAS payment if the deceased had been collecting them, and a bank account of something.
CPP and OAS get paid at month end. And get paid into a joint account with his wife. I assume by notifying CRA and Service Canada of death asap might remedy this issue?
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Re: Wills, notification of death and probate

Post by AltaRed »

Maybe, but not necessarily. Final CPP and OAS payments are still technically part of the estate and form part of the Final T1 Return, and/or a Rights and Things Return (which is where I put them), regardless of whether they were deposited into a JTWROS account that now is soley owned by surviving spouse. I'd think a creditor, including CRA, could claw those payments back but I suspect that is most unlikely to happen given the amounts involved.

Bottom line though is that few estates have zero assets. They may have liabilities exceeding assets, but they seldom have zero assets.
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Re: Wills, notification of death and probate

Post by amphitryon »

CPP etc. is usually paid towards the end of the month (26-30 range from past experience), so there is no claw-back, as there is for pensions from some other countries. There would likely also be a death benefit plus any other existing insurance, all of which would add to the ''estate'', unless an insurance policy has a named beneficiary; ditto for a TFSA. I followed AltaRed's process in two instances where I was executor, and it all worked flawless: final T1 return, R &T (T1 ''70'' (2)) return and and a T3 (Trust Income Tax Return).
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Re: Wills, notification of death and probate

Post by AltaRed »

I didn't suggest Ottawa claws back CPP and OAS because indeed, they are paid near the end of the eligible month. I was suggesting a creditor such as a telecom or CRA could as those are estate assets.
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Re: Wills, notification of death and probate

Post by twa2w »

Just to clarify in case anyone following the thread is unclear, CPP and OAS are payable in the month of death so whether one dies on the 1st or the 30th of a month, they are entitled to the payment for that month which normally are deposited toward the end of the month. Most other private pensions in Canada work this way as well.
If you died on the 30th and the Service Canada did not receive notification in time and paid the folliwing months payment, this would be clawed back. This almost never happens BTW.
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Re: Wills, notification of death and probate

Post by hamor »

Gee, it's more complicated than I thought
Thank you, all.
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Re: Wills, notification of death and probate

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optionable68 wrote: 16 Oct 2017 12:15 .... no assets or liabilities, is there anything we need to consider in terms of probate or any legal proceeding requiring a lawyer ?
So even if there is a nominal residual of assets... say $1,000 and no liabilities.... do we need a lawyer's involvement for anything else? Do we need to go to court for Probate?
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Re: Wills, notification of death and probate

Post by twa2w »

optionable68 wrote: 20 Oct 2017 22:20
optionable68 wrote: 16 Oct 2017 12:15 .... no assets or liabilities, is there anything we need to consider in terms of probate or any legal proceeding requiring a lawyer ?
So even if there is a nominal residual of assets... say $1,000 and no liabilities.... do we need a lawyer's involvement for anything else? Do we need to go to court for Probate?
As long as there is an acceptable will, no.

Most banks are willing to release small estates up to 25,000 and in some circumstances up to 100,000 or even more.

PThey need
1) the original will ( or notarized copy) which they wiil copy
2) funeral directors certificate of death
3) estate questionaire and bond of indemnity and usually a credit application to support it.
4) sometimes they may ask for releases from beneficiaries but rare

For larger amounts it helps if the executor/ beneficiary deal with that bank and it also helps if they are finacially responsible.

These are pretty straightforward when spouse is sole beneficiary, or other simple estates.

Even most provincial governments will transfer car ownership with a will and death cert.

The only lawyers involment may be to provide a notarized copy of will if needed but bank can copy original.

Even without a will, banks may release small amounts to spouse or child with a bond of indemnity and death cert.

Often with very small amounts, the survivor brings in the funeral bill and bills for related expenses, the account is closed and a draft made to funeral home. The survivor then has to pick up remainder becsuse there isnt enough money.

The bank will often have the survivor or executor sign the CPP death benefit cheque and release funds when it is received a month or so later.

Again, it helps to have a decent relationship with your bank.

Hope this helps.
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Re: Wills, notification of death and probate

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Thank you twa2w for your thoughtful response
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Re: Wills, notification of death and probate

Post by amphitryon »

Just to add another item which may be of interest to some. As you can see from prev. entries, I acted as an executor fro a friend; the lawyer I engaged to check my initial plan of action suggested I should take a fee for this. I can only say, well earned, but I'll also add, if you can get the person who makes this deal with you while living, to simply bequeath a sum in their will, you'd be better off.

About a year later all done now, and in possession of a Clearance Certificate, I thought all I had to do now, is declare this fee on a line of my 2017 income tax return. Not so simple!
I needed first to issue a T4 (as the Trust Account entity?) to myself (the executor) and mail this document to CRA and then declare the income on my return, also with a copy of the same T4. The deadline to file is the last day of February of the year following in which the fee was received (not earned)!
Good thing that I had not ''taken'' the fee yet, so this is now happening in 2018 and will go into my 20 18 return next year. If I'd known this, I could have done the whole thing earlier, but as it sits, CRA suggested the time to include in my 2017 filing was already too tight. Now I'm just supposed to clearly mark the T4 as 2018, so they would not miss this................ the helpful person at CRA suggested to hi-lite the field......... Naturally, there are several needed ''account numbers'' involved in this little venture: one was the Trust Acct. number (which I got when filing the Trust return) and the other one, an ''Employer's account number'', the latter which was issued, believe it or not, right there while on the phone with CRA.
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Re: Wills, notification of death and probate

Post by Peculiar_Investor »

amphitryon wrote: 23 Jan 2018 19:08 Just to add another item which may be of interest to some.
Thanks for providing this update. Very interesting and somewhat complicated.
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Re: Wills, notification of death and probate

Post by Yasehtor »

I am the executor of my mother-in-laws estate and was wondering if someone can provide guidance on a few issues.

1 With respect to the death benefit I know it is taxable to my wife (also a beneficiary) if she receives it. I am wondering if there is any way I can pay it as executor and claim it as income of the estate on a T3 trust return?

2. My mother-in-law had her annual RRIF payment automatically set to pay out at the end of January and she died on January 24th. The bank didn't know about her death until after the RRIF payment was made. Will the bank issue a T4RIF for that payment to the estate and should it be claimed on her final return? Will they transfer it back to the RRIF and distribute it to the beneficiaries of her RRIF?

3. Since she died in January I anticipate claiming the disability tax credit can be claimed ( she is in a nursing home) and I should be able to claim the one month of care as well. Does that sound right?

Any assistance appreciated. I have looked at CRA information but sometimes it is like finding a needle in a haystack.

Thanks,
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Re: Wills, notification of death and probate

Post by amphitryon »

I can only tell you what I did as an executor for a friend:

I did file three tax returns: final tax return for the deceased (T1 General), then a ''Rights and Things Return'' (T1 General, marked ''Rights and Things (70)2''), and a T3 return. On the T3 (your point # 1) I declared the Death Benefit only (there was nothing else), and no tax was payable. As a footnote: I simply took the Death Benefit into the final total estate $$ and split this account then according to the will. The beneficiaries do not pay tax on this.

Every $ received up to the death I declared on the T1 return, everything else went onto the Rights & Things return, except the Death Benefit. This seems to have been correct, because I did receive in due course the applied for Clearance Certificate.

check out this link: https://www.canada.ca/en/revenue-agency ... turns.html
and:
''Rights or things are amounts that had not been paid to the deceased at the time of his or her death and that, had the person not died, would have been ... You can file a return for rights or things to report the value of the rights or things at the time of death.''
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Re: Wills, notification of death and probate

Post by amphitryon »

Peculiar_Investor wrote: 23 Jan 2018 19:15
amphitryon wrote: 23 Jan 2018 19:08 Just to add another item which may be of interest to some.
Thanks for providing this update. Very interesting and somewhat complicated.
For those interested, hopefully a final update: after receiving increasingly strong worded ''reminders'' and attached PIER forms, and after several discussions with various people at the provided phone-numbers, I seem to have been able to put this to bed. Mind you, I am still waiting for the ''final letter''(promised), telling me I do not owe any CPP (both employer and employee share) and also have no EI deficiency (also both shares), even though the computer sent me already an assessment and strongly suggested to pay several times.

The problem clearly was that I followed the initial advice and issued a T4 to myself, in order to comply with reporting the fee on my 2018 return. I now wonder if there was a better (and simpler) way and I just got bad advice initially from one of the CRA specialists. From that moment on I (the Estate) was treated as a company owner with payroll and all necessary deductions and filings, all this while also being my own sole employee, and this for a very short time. After the third ''missive'' from the CRA I was close to just pay the requested employer and employee portion on my EI ''deficiency'', totalling 129.67 just to close the matter. Never again!
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Re: Wills, notification of death and probate

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Question please: my parent passed away April 2017. Funeral home didn't do their job so they received an extra 3 months OAS. I was too upset and not monitoring their accounts. February this year I get asked to repay approx. $4500 for the over-payment which I did. CRA however assumed OAS was paid for the whole year and taxed accordingly. I called CRA who sent me to Service Canada who advises that I must submit an original will/certified copy and that it will take 20 weeks or more to send the corrected info to the CRA. I asked why their input to CRA would not automatically be rectified and they said, perhaps next year but they don't know if CRA will send a tax refund to a deceased person in 2019.

Anyone know if the CRA on receiving the correct reduced amount, will send a refund? The agencies are really accurate when they demand a payment however small, but now they're "not sure/don't know"?
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Re: Wills, notification of death and probate

Post by twa2w »

Sorry about you parents- and the mess with CRA.

Yes CRA will issue a refund if there was an over payment but not proactively.. It may take a while and you may have to jump through a few hoops and a ton of paper work. It may not be as easy as you think.

When OAS issued the T4p,, was it for the amount paid to your parents ie Jan to April plus 3 months over payment?

Service Canada should eventually issue an amended t4p for the proper amount. Yes they will submit a copy to CRA. No CRA will not issue a refund automatically. You will have to file an amendment with CRA to get the refund.
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Re: Wills, notification of death and probate

Post by Hopetoretire »

Thanks twa2w. Yes, the T4p included the overpayment, and OAS told me once I have submitted a request for correction, it will take over 20 weeks to process the change. The CRA did the tax calculations based on the higher amount. My tax consultant says the refund would be under $1000. I guess the CRA will not automatically "do the right thing" and send me a cheque and I'm wondering if it's worth chasing with all the potential paperwork :(

For the past year they have been addressing all correspondence to "the estate of .....", but now they're asking again for a death certificate which is really emotionally upsetting.
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Re: Wills, notification of death and probate

Post by twa2w »

I have never had to do an adjustment on a final tax return but It should be as simple as submitting a t1 adjustment(on paper), once you have the amended T4.
It is the paper work with Service Canada that may be frustrating. Because of the overpayment/repayment you now have to prove you are the executor, hence the request for will and certificate. Normally to cancel the OAS and CPP, service Canada accepts the notice sent by the Funeral Home but it sounds like this was not done properly and they also now have to confirm they are dealing with the proper person. I know it sounds stupid but they have a protocol to follow to protect themselves and the estate.

The refund if you decide to pursue it, will likely be a cheque payable to the estate. Even if you have already closed off any estate accounts, your banker should still have the estate paperwork and should cash this for you on an exception basis. They may ask for a bond of indemnity though.

Best of luck and I hope it goes smoothly for you.
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Re: Wills, notification of death and probate

Post by twa2w »

I have never had to do an adjustment on a final tax return but It should be as simple as submitting a t1 adjustment(on paper), once you have the amended T4.
It is the paper work with Service Canada that may be frustrating. Because of the overpayment/repayment you now have to prove you are the executor, hence the request for will and certificate. Normally to cancel the OAS and CPP, service Canada accepts the notice sent by the Funeral Home but it sounds like this was not done properly and they also now have to confirm they are dealing with the proper person. I know it sounds stupid but they have a protocol to follow to protect themselves and the estate.

The refund if you decide to pursue it, will likely be a cheque payable to the estate. Even if you have already closed off any estate accounts, your banker should still have the estate paperwork and should cash this for you on an exception basis. They may ask for a bond of indemnity though.

Best of luck and I hope it goes smoothly for you.
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Re: Wills, notification of death and probate

Post by AltaRed »

I agree the 'glitch' is now the need to prove Hope is the executor so Service Canada can re-issue the tax slip, and then to pursue the refund with CRA. Could take a year to sort all this out.

Not to throw a curve ball, but the extra OAS payments would have occurred in the months after death. Would this not be an issue with the T3 Testamentary Trust return, and not the Final T1 Return? ....albeit Hopetoretire hasn't specified under which assessment the CRA demanded repayment.
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Re: Wills, notification of death and probate

Post by twa2w »

Minor point. I believe it was Service Canada that requested the overpayment be returned once they received proper notice of death. My guess is they did not receieve the overpayment back in time ( ie before end of 2017) to issue a proper T4.

I am assuming the OP filed the T4 on the final tax return without knowing the figures were wrong.

Either way, (t3 or t1)an amended return should be filed once the proper t4 has been issued and the tax over payment recovered from CRA.
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Re: Wills, notification of death and probate

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I agree it will either be an amendment to the T3 or T1 Final. Hope didn't indicate how the tax returns were done for 2017, i.e. whether the OAS was split, so I just wanted to raise that question.
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Re: Wills, notification of death and probate

Post by Hopetoretire »

No, didn't check the T4, just sent it to my tax consultant with the rest of the paperwork. I have the wills proving I'm the executor. OAS was not split. Have decided to see if Service Canada will send a correct version this year or next year. Then will send to CRA who although they will also receive a copy will not refund the estate (they told me to send in certified copy of will, death certificate, all documents for 2017 and 2018). For less than $1000, I'm going to be reactive until emotions are less likely to interfere, maybe next year, maybe never. Of course, my parents signed the form to let the tax consultant handle their affairs while they were alive, and I don't know how to do this as their executor as I was told neither he nor I can access any of my parents' info from Service Canada and the CRA until they get the documents (although they're still sending all correspondence for their estate c/o me).
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Re: Wills, notification of death and probate

Post by fireseeker »

I know there several board members who have served as executors.
I'm curious what they think of the details in this story about Doug Ford and Rob's estate:
https://www.thestar.com/news/canada/201 ... ldren.html
Under the circumstances, is two years without a payout to beneficiaries normal? Is a life insurance policy going missing for much of that time unusual?
I'm guessing Rob wasn't exactly button-down with his affairs. But the apparent lack of estate details and probate progress seems odd. Or maybe not.
Thoughts?
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Re: Wills, notification of death and probate

Post by tedster »

fireseeker wrote
Thoughts?
I was my mother's executor. She did not have a ton of money, but her assets were pretty complicated as far as I am concerned. All I know is that the taxes had to be paid, and that did not happen with the Receiver G until the following filing year. It took all that time to get the stuff sorted. In my will I do not list actual assets as who knows if they will exist when I move on? However, it does seem to me that as an Executor Doug Ford has not been too efficient. Besides, in my experience, as the Liquidator (=executor in Quebec) I had the right to hand out some fund when I thought judicious. I was accountable of course. One of her heirs wanted to take a truck driving course, so I advanced some of his heritage early. I think Doug has a lot of explaining to do.
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