Losing a loved one is one of life’s most painful events. Financial matters might be among the last things you want to think about but there are decisions you will need to face at this difficult time.
It will make things easier if you and your loved ones have conversations when all is well. You will need to know where to find relevant documents, such as wills and statements of assets and liabilities, when the time comes. Find out whether your loved one has a lawyer or accountant and who your loved one has chosen as executor(s).
There are many steps that you, or the executor(s), will need to take to deal with the estate of your loved one.
Before starting, it might be wise for you to consult with your lawyer to ensure you are aware of any important legal considerations. For example, in some cases, it makes sense to bring the will to a court if all or part of it needs to go through “probate”, in other words, for the court to confirm that it is valid. This can be an expensive process so executors avoid probate if possible.
Here are some key steps that the executor will need to complete to deal with financial issues related to the estate:
- Obtain multiple certified death certificates from the funeral home. You will need to submit original certified certificates as proof of death in order to complete many of the steps listed below.
- Apply for benefits (such as a death benefit, children’s benefits, and a survivor’s pension) under as the Canada Pension Plan (CPP) or Quebec Pension Plan.
- Contact the beneficiary or beneficiaries that are named in the will to let them know about the death and to arrange for them to receive their share of the estate once financial matters have been settled.
- Ensure that your loved one’s debts have been paid.
- Apply for life insurance benefits – through a direct life insurance policy or through current or past employers, credit cards, alumni associations or any other organizations that the person belonged to.
- Contact bank(s) and other institutions where your loved one held accounts to make appropriate arrangements. Examples of accounts that might need to be closed are registered savings plans, savings and chequing accounts, and other investment accounts. You might set up an estate bank account for transactions regarding the estate.
- Check whether the person has pension benefits with a current or past employer to find out if the estate is eligible for a death benefit or to the commuted value of the pension.
- Cancel or transfer credit cards, auto insurance coverage, and so forth.
- At the end of the process, a final income tax return must be filed for your loved one. Consult with a tax professional to prepare this return.
Find out more about what to expect as an estate representative on the Government of Canada website.
If you receive money through the estate, revisit your financial situation when you are ready and make any needed adjustments to your financial planning and investments.
Remember to review your own will and power of attorney for property arrangements on an ongoing basis.