# Death of parent - pensions, etc



## Ih8Money (Dec 3, 2015)

I was told to look up if I can receive any benefits and/or pensions that my father had.

Does anyone here know of any specifics in regards to work pensions and/or death benefits? As I'm sort of in a little situation in that he left me a house with a line of credit, but the property is great [meaning the location] right next to a subway line in the west end of Toronto.
Any suggestions or other things I may have not know about would be of great help.


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## dougboswell (Oct 25, 2010)

Ih8Money said:


> I was told to look up if I can receive any benefits and/or pensions that my father had.
> 
> Does anyone here know of any specifics in regards to work pensions and/or death benefits? As I'm sort of in a little situation in that he left me a house with a line of credit, but the property is great [meaning the location] right next to a subway line in the west end of Toronto.
> Any suggestions or other things I may have not know about would be of great help.


Sorry about your father
Work pensions, CPP and OAS pensions stop after the passing. CPP has a death benefit lump sum amount. The funeral home should have the application form. Check to see if there is life insurance on the line of credit. If so that will pay out any balance owing.


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## marina628 (Dec 14, 2010)

I suppose it depends on his past employee.When my brother passed away 2 years ago and he had worked 30 years in Canadian forces he had life policy plus a death benefit.Did he leave a will?CPP will pay a death benefit around $2500 to the estate to help with burial expenses .Credit cards etc have to be paid by the extate or executor but generally when you notify them of the death they stop collecting interest.I handled my brother's estate and he had a small credit card bill and they sent me the bill showing zero interest,I didn't see the rush to pay it off so paid 100 a month until ti was cleared .


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## sags (May 15, 2010)

Good posts by others and I agree with Marina, that some workplace pensions also have a life insurance policy as a benefit.

I know that GM pensioners have $75,000 at age 65 which reduces each month until it reaches around $35,000 and stays at that level.

My wife's HOOPP pension has a $10,000 policy attached to it.

My dad's pension paid out the equivalent of 3 months pension benefit.


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## Ih8Money (Dec 3, 2015)

dougboswell said:


> Sorry about your father
> Work pensions, CPP and OAS pensions stop after the passing. CPP has a death benefit lump sum amount. The funeral home should have the application form. Check to see if there is life insurance on the line of credit. If so that will pay out any balance owing.


Nope, definitely no life insurance, it's something he said he wishes he had done. He really didn't do much in terms of planning his estate, in fact, he didn't do anything.
All he did was make out his 10 years ago and gambled away a ton of money day trading. 

The only thing I'm left with is a line of credit on the house which I think he took out to chase after the money he lost on the markets. The house was paid for well before then.
So just a line of credit and a valuable piece of property, that's it. Stuck between a rock and a hard sport as my financial background is limited, my credit is not in good standing. So this is the reason I'm looking to squeeze out any dollar I can from whatever legal means possible. I'd love to keep the property for another ten years as the value would surely go above 1 million.
I will definitely look into what you all have mentioned here. I truly appreciate the help.


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## Ih8Money (Dec 3, 2015)

marina628 said:


> I suppose it depends on his past employee.When my brother passed away 2 years ago and he had worked 30 years in Canadian forces he had life policy plus a death benefit.Did he leave a will?CPP will pay a death benefit around $2500 to the estate to help with burial expenses .Credit cards etc have to be paid by the extate or executor but generally when you notify them of the death they stop collecting interest.I handled my brother's estate and he had a small credit card bill and they sent me the bill showing zero interest,I didn't see the rush to pay it off so paid 100 a month until ti was cleared .


I made a note to call the bank and ask them to stop the credit cards. In fact I was there yesterday and wondered if they had done so since I gave them a death certificate.
Did you execute the entire will yourself, of course with the help of a lawyer when needed [like getting probates done]? 
My father's last will is very simple as I'm the sole beneficiary. I was considering using the banks "agent of executor" services [where they literally do everything for you for a percentage ie 5% for first $500,000 then 4% for every $500,000 after]. I'll possibly make a new thread about this as long as you guys don't mind. I could really use some advice in regards to this.


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## Ih8Money (Dec 3, 2015)

sags said:


> Good posts by others and I agree with Marina, that some workplace pensions also have a life insurance policy as a benefit.
> 
> I know that GM pensioners have $75,000 at age 65 which reduces each month until it reaches around $35,000 and stays at that level.
> 
> ...



So I just contact his workplace and ask if they had some kind of life insurance policy as benefits? Obviously I ask who they deal with and they have to give me that information after I send or show them the death certificate?


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## sags (May 15, 2010)

You will need to contact your dad's employer or pension administrator to halt the pension benefits and you can ask them if there are any death benefits.

The employer or life insurer (whoever will process the claim) will require a notarized copy of the death certificate.

To administer the estate isn't a difficult process, but is time consuming and some paperwork is involved.

There are ample websites, including the banks that provide a step by step guide to the process.

It basically involves following the steps. I certainly wouldn't be paying 4-5% of a big estate to someone else to do it. That is $45,000 on a 1 million dollar estate...........yikes.

You say your dad was trading stocks, so you would want to find out where his trading account is located, and examine the contents. There may be cash or stocks in the account.


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## carverman (Nov 8, 2010)

sags said:


> To administer the estate isn't a difficult process, but is time consuming and some paperwork is involved.
> 
> There are ample websites, including the banks that provide a step by step guide to the process.
> 
> ...


It's a lot more complicated to administer an estate than one thinks, Sags.

There can be a LOT more paperwork involved if the person dies intestate (without a will, naming beneficiaries ) in Ontario, which has the highest estate taxes in Canada.
If the property was transfer to the beneficiary before the parents death, then there won't be any tax consequences, I believe, as long as the property is put in the
child's name before the parent's death. 

If the estate (house) is not transferred ahead of time then the assets (house in this case), will have to be appraised for FMV at the time of death, as if the deceased had actually sold it 1 minute before his death. 
If the title transfer was done prior to the death of the father,then it's just a matter of the will being read and the assets (if any), being distributed)..at least I think. 

Probate fees, OTOH, can range from $5 per thousand on the first $50,000 (simple will/estate) to as much as $15 per thousand after the first $50,000.
So if the house in Toronto is estimated at 1 million FMV..those fees can be quite significant ...$14,500.

Filing income taxes for the deceased in the year of death and the final tax return, when everything involving the estate )that has tax consequences)has been duly calculated (RRSPs etc).
There are other costs, like the legal fees to file the papers and the executor fees. 
http://ontario-probate.ca/inheritance-taxes/



> The estate trustee is personally liable for the taxes due by the estate. Therefore, the* estate trustee absolutely must calculate and pay the income taxes due and obtain a clearance certificate before distributing the estate to the beneficiaries*.


Executors, (named in the will, (or not) can charge as much as 2.5% for their services Plus HST. 

Here's an example:


> *If estate administration takes longer than a year, which can happen with the long waits for tax clearance certificates,* an executor may also charge a care and management fee. The usual formula is 2/5 of 1% of the average annual value of the estate assets. To calculate, first determine the average annual value. For example, add the value of the estate assets on the first anniversary of the date of death to the value of the estate one year later. Divide this number by 2. This is the average annual value.
> 
> Next, multiply the average annual value by .01 then multiply by 2 and divide by 5. Here is an example:
> 
> ...


Being faced with that kind of math (waiting for tax clearance certificates) before funds can be released by the banks and financial institutions can take up to a year or longer, depending
on the circumstances. As executor, you are deemed responsible to take care of any inaccuracies in executing the will including responsible to CRA to pay any discrepancy funds.


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## Ih8Money (Dec 3, 2015)

This is exactly why I chose the handle I chose. I honestly don't know where to begin, what services to use, etc.
Maybe the bank's service of "agent of executor" isn't such a bad idea afterall.

Any suggestions before I jump off of a cliff here? 



Time to call up the doctor and get some meds. 


By the way, thank you for the replies and information. I do appreciate the eye opening info.


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## dougboswell (Oct 25, 2010)

Ih8Money said:


> This is exactly why I chose the handle I chose. I honestly don't know where to begin, what services to use, etc.
> Maybe the bank's service of "agent of executor" isn't such a bad idea afterall.
> 
> Any suggestions before I jump off of a cliff here?
> ...


AS you have a will , it must be probated before assets are distributed. If you are not comfortable then using the bank is an option although their fees seem high. If you have time and confidence you can do the process yourself.
You can take the will to the courthouse in the jurisdiction where your father resided. A judge will read it over and declare it and stamp official. You will pay the probate fee and then you will be the administrator, assuming he did not name anyone else. His bank accounts would be frozen by the bank when he passed. They will pay out legitimate fees from it ie funeral cost and probate fees. Once the bank has the death certificate and a copy of the probate you can open a new fund and transfer the assets to it. One thing you should do, especially if you don't know if he has outstanding debts is to put an ad in a paper and telling anyone who is owed money has until a certain date to forward their claim to you. 
Others have mentioned contacting various places -to claim any insurance policy payouts etc. If you are the only beneficiary it is a little easier. You must file for income tax in the year that he died. You must also file a final one to get an estate clearance. There is lots of information on Canada Revenue Agency site. However if you are unsure pay a Chartered Accountant to do these. They will do it correctly and then there is less chance of a CRA audit.The cost will be well worth it. Don't use H & R Block or others to save money on this. You need to make sure that he filed income tax for the pass 7 years so don't spend all the money up front. CRA can come after the estate up to 7 years after the passing.


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## carverman (Nov 8, 2010)

From OP's post (IH8Money):



> He really didn't do much in terms of planning his estate, in fact, he didn't do anything.
> All he did was make out his 10 years ago and gambled away a ton of money day trading.


I presume that by make out his 10 years ago, you mean he made a will. Was the will done by a lawyer or company that specializes in wills, or was it just freehand (sometimes called a holographic will) done, without two witnesses signatures that with their signatures testify it is his official will?



> The only thing I'm left with is a *line of credit on the house which I think he took out to chase after the money he lost *on the markets. The house was paid for well before then.
> So just a line of credit and a valuable piece of property, that's it.


That would be a secured line of credit. the financial institution would register a lien against the house and that would have to be cleared up first and a release from
the financial institution that their interest is satisfied once the balance on the LOC + the legal discharge is paid in full. 

This is often is what happens when people don't take action planning their estate and die without a statement of assets and liabilities and where they can be found or contacts that can be called in regards to these assets/liabilities. 

I have a statement on my computer that lists all my assets, liabilities, account numbers and phone numbers of financial institutions that can be contacted
as well as pensions (CPP/OAS/company pension) that can be notified to stop payments ASAP after my death.

Each year, I update this list and print it out and keep it with my official will. 

Without preparing your estate, it could be a long and expensive search to find these. Especially the liabilities. 
Otherwise money in bank accounts or other registered money funds could be FROZEN for as long as it takes to get a *clearance certificate from CRA*, that everything is in order and funds in these accounts can be released, after the tax portion has been remitted to CRA from these estate funds. This is usually part of the FINAL tax return for the deceased which can take months, or in some cases even years The tax man want's his share.

read this on filing tax returns for the deceased,
http://turbotax.intuit.ca/tax-resources/deceased-tax-return.jsp

here is a blog by an estate lawyer that tries to explain what the process is;
http://estatelawcanada.blogspot.ca/2010/07/can-executor-distribute-estate-assets.html

So, IH8Money: If you still feel confident you can manage all this paperwork, and calculations, then go ahead..otherwise seek out someone who can deal with the paper work, phone calls and searches for assets and debts. Tax accountant, or even an estate lawyer. This could save you a lot of headache, especially if the estate has to deal with income taxes.


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## Joe Black (Aug 3, 2015)

My mom died in 2014. She had sold her house a few years back and lived in an apartment, so her assets were almost all liquid in RRSP, RRIF, chequing and bank accounts.

She had a will, which other than a few items of furniture simply divided the assets evenly between myself and my two siblings. I was the executor. The total assets were quite large, not quite as big as yours but comparable, and I did not trust myself to get everything right. So I used a lawyer instead. They created a trust account for the estate and gathered all the money from the different banks into it, plus I deposited any cheques for the estate, such as the CPP benefit, to this trust account. Whenever I had an estate expense, such as probate fees, income taxes, funeral expenses, etc., I told my lawyer the amount and he made a cheque out that I would send to pay the expense. Note that we didn't have a clearance certificate from CRA, but apparently you can use estate funds to pay for estate expenses.

I basically had the lawyer (in most cases, it was actually their "estates clerk") do all the leg work, like tracking down the final copy of he will, contacting the banks, calculating the probate fees, etc. This went on for a year without the lawyer billing me. Instead, when everything was wrapped up they took their fee directly from the estate account. They didn't charge a percentage, but rather by the work they actually performed. My rough calculation is around 1.5% of the estate. Since most of the work was done by the lawyer, I didn't take an executor's fee, so I don't think my siblings were any worse off from the lawyer's fee then what I would have charged, and it would have taken me a lot longer to fumble through.

So you might try the lawyer route, however since your father's assets aren't liquid you may have to pay as you go.


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## carverman (Nov 8, 2010)

Joe Black said:


> My mom died in 2014. She had sold her house a few years back and lived in an apartment, so her assets were almost all liquid in RRSP, RRIF, chequing and bank accounts.
> 
> She had a will, which other than a few items of furniture simply divided the assets evenly between myself and my two siblings. I was the executor. The total assets were quite large, not quite as big as yours but comparable, and I did not trust myself to get everything right. So I used a lawyer instead. They created a trust account for the estate and gathered all the money from the different banks into it, plus I deposited any cheques for the estate, such as the CPP benefit, to this trust account. Whenever I had an estate expense, such as probate fees, income taxes, funeral expenses, etc., I told my lawyer the amount and he made a cheque out that I would send to pay the expense. Note that we didn't have a clearance certificate from CRA, but apparently you can use estate funds to pay for estate expenses.


Yes, some expenses such as funeral expenses and taxes owing to the CRA in the year of death, can be paid from the estate without the clearance certificate for
expediency. 

The CPP death benefit goes into the estate account, and that is what this benefit is for, although today, even cremation and rent a casket for one day of visitation at a funeral home can cost several thousand +HST. $5,000 to just for a casket,

plus all the other fees,
As an example: Ccoroners fee, municipal fee, Cemetary eqt fee, cremation or earth burial fee, Family reception centre fee, , urn carrier fee, executors toolkit, and Cateriing, if applicable,
Funeral directors fee , lead clergy fee, Limousine fee, Pallbearers fee, and mileage 1.95/km. and other surcharges as the list goes on.. 

In my example:
My prearranged funeral (1 day of visitation and cremation, with burial in the family plot in Oakville was $8918 (including GST) in 2009.
The costs are covered by an insurance policy certificate so the prearrangement one time payment value will grow to cover the costs from from inflation. ($12,128 at age 75)
and $13,466 at age 80. You definitely don't want to have to pay these kind of expenses out out of your own pocket, if there is enough to cover expenses in the estate. 



> So you might try the lawyer route, however since your father's assets aren't liquid you may have to pay as you go.


This may be IH8Money best option. Let the estate lawyer figure out how to wrap up the estate, especially if there is a secured line of credit on the property and what ever other liabilities are out there.


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## Joe Black (Aug 3, 2015)

Something I should have mentioned, is that the bulk of the inheritance was distributed long before the CRA clearance certificate was obtained. Except for $50,000, which was kept in the estate account, the rest was split among the 3 heirs, I think right after the probate was paid. As the executor, I was on the hook if it turned out there was actually more owed by the estate, but that was a very small risk because my mom was extremely conservative with finances and never had debts. If I had not distributed until after the clearance certificate, myself and my siblings would have not had use of the money for months and months (I personally would have missed out on a couple thousand of interest on the PC 2.6% offer followed by the Tangerine 3% promotion).


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## Eclectic12 (Oct 20, 2010)

sags said:


> Good posts by others and I agree with Marina, that some workplace pensions also have a life insurance policy as a benefit.
> 
> I know that GM pensioners have $75,000 at age 65 which reduces each month until it reaches around $35,000 and stays at that level...



Interesting ... the only life insurance I've had through work was either optional (i.e. I had to buy it) or as an employer benefit. In both cases, there was no connection to the pension, which meant the insurance payout was tied to either what was bought (optional) or salary (employer version).


For the pension itself, as it was a DB pension - there were only ways of a payout. The first was if I died with a spouse, having selected a lower pension so that my spouse would continue receiving the pension for their lifetime after i died. The second was if I died as a single person before the guaranteed minimum period had been collected (i.e. collect for two years then die where there was a ten year guarantee).


Cheers


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## Eclectic12 (Oct 20, 2010)

carverman said:


> It's a lot more complicated to administer an estate than one thinks, Sags.
> 
> There can be a LOT more paperwork involved if the person dies intestate (without a will, naming beneficiaries ) in Ontario, which has the highest estate taxes in Canada...


+1 ... though having a will does not necessarily avoid issues. 

My sister was annoyed as she had specifically requested a bank account be left open so that there would be somewhere to deposit the life insurance check. There was a long runaround to eventually discover the bank account had been closed leaving nowhere for the EFT or cheque to be deposited.


Cheers


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## sags (May 15, 2010)

My dad's funeral cost about $9,000 total.

He was cremated immediately, and there was no casket and very little other costs. There was no visitation or other services at the funeral home.

We held a memorial at his church a few weeks later, when everyone could attend and held a luncheon afterwards at dining hall. The total cost was $1500 for that.

My dad had a cemetery plot paid for beside my mom's plot, but we learned that his ashes could be placed in my mom's plot.........so that is what we did.

His empty plot is now available for up to 6 family members who decide to get cremated and want their ashes put there.

Their plots are located in the middle of a green space which is difficult to reach in bad weather, so we paid for a joint name plaque on a memorial stone at the prayer garden near the road.

There is a covered gazebo there and I can visit both parents more often now.

The cost of that was $1200 for the plaque and a couple hundred dollars to bury his ashes in an urn in mom's plot.

The church was full for dad's memorial, and everyone came to the dining hall to visit with each other. We had family members and friends, playing instruments, singing and telling stories at the memorial service.

People thought it was a great way to celebrate my dad's life...... "saying goodbye......until we meet again" can come in many forms and doesn't have to cost a lot.

By contrast my uncle paid $30,000 for his wife's funeral, which was what he wanted so that is fine too.


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## sags (May 15, 2010)

Edit..........sorry to the OP if the thread got a little off track. I would say that if you can afford the cost, after you receive the inheritance, it isn't a bad idea to forget about the cost and just have a good lawyer deal with it all.


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## AltaRed (Jun 8, 2009)

I don't see where the OP has stated the province in which the Will will be probated. It is somewhat different in Quebec with all other provinces somewhat similar.

On the government website for the province in which the Will will be probated will be the form for Application for Probate. One of the first things is to develop the inventory of debts and assets as that is a fundamental part of pursuing Probate. The OP can look at that and see if he wishes to pursue Probate himself, or hire a lawyer to do that. Given there is RE involved and outstanding LOC, and we don't know anything about other debts or assets, there could be more complications than meets the eye.

Once Probate is received (can be relatively quick if there are no complex business/financial complications), at least some of the Estate can be crystallized and disbursed to beneficiaries. It IS important to hold enough back to pay outstanding debts, including income tax owing for the Final T1 return.

My bro and I were able to obtain Probate within 4 months of date of death for our mother earlier this year. She did not have any real property, only a bank account and an investment (brokerage) account, and one credit card balance outstanding. We cancelled annuity, pension and OAS payments right away, and then put together the asset list within a week (no company pension or life insurance involved). We disbursed all funds except for what we knew we would need for income tax filings next April plus a little extra to cover unknowns.


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## Ih8Money (Dec 3, 2015)

Hi and thanks all again, I've printed out these two pages to make myself a list of do's and more do's with some don'ts. 

I'm in Ontario.
The Will/Last Testament and the beneficiaries, are all me.
I'm the executor as well.
The only assets are the house, some cash in the bank, RRSPs and the liabilities which in this case is the line of credit with the regular hydro, house tax, etc.


I'm still unclear on probate as I haven't had time to click on the links provided and will do so hopefully in the next half of the day today.
But is this something I can do on my own? From my understanding, there are two probates that need to be done. The first validates the Will [correct?]. Then I have 90 days to get an estimate on all assets and liabilities for the second probate to be sent in.

Funeral arrangements and cremation have already been paid for by family members even before he died, to help alleviate that stress.

Again, thank you all. It means a lot to have some help in all this. It's truly appreciated.

As a footnote, the TD bank people are staying on top of me, making sure I "haven't forgotten about us [them]". They really want to cash in on all this. Which makes me want to do this with a lawyer and on my own even more so.


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## carverman (Nov 8, 2010)

Ih8Money said:


> Hi and thanks all again, I've printed out these two pages to make myself a list of do's and more do's with some don'ts.
> I'm in Ontario.
> The Will/Last Testament and the beneficiaries, are all me.
> I'm the executor as well.
> ...


YES.



> Then I have 90 days to get an estimate on all assets and liabilities for the second probate to be sent in.


 I think that would be the way it needs to be done, but in your case, best to consult a estate lawyer. If the will was made by a lawyer and has two witnesses on it,
who witnessed your Dad's signature at the time the official will was created, it may or may not be necessary, as long as there is a copy of the death certificate
that you can provided.

BTW, you will need several copies of the death certificate. One for CRA, one for CPP and OAS, and to give to the financial institutions for any other benefits he received,
and for the banks that hold any investments he had/has. 

Here is a good website with blogs by an estate lawyer to learn about estate law: 
http://estatelawcanada.blogspot.ca/2010/05/does-every-will-have-to-be-probated.html

If you and your Dad had* both your name and his name listed on the title (deed) *to the property, the property that you and your dad owned (even if you never paid the any property taxes on it) transfers
to you upon your parent's death by the clause "RIGHT OF SURVIVORSHIP". This usually applies to the case of a husband and wife (provide they are not divorced). 

For instance, in my case, my property (bought after separation from my wife (who is divorced from me) was bought by me and my mothe,r, and she was 50% owner of my property for almost 18 years, 
even though I live in Ottawa and she lives in her own house in Toronto. The *right of survivorship clause in the deed to the property would assure that my mother (now 91) if she survived me would be 100% owner of my property upon my death.*

The only caveat here is that because she never lived in my house in Ottawa, and filed her income taxes from her address in Toronto, she would have to pay capital gains on 50% of the FMV of my house at the time that clause came into effect. 

Realizing this fact, and her getting on in years, she went to a lawyer a couple years ago and relinquished legally through her lawyer in Toronto (and my lawyer in Ottawa)to give her half ownership as
a gift to me..for the sum of one dollar. I am now registered in the county records as 100% owner of my property.

In your case, because this didn't happen before your Dad's death , but it was his principle residence, the right of succession to the property requires a different interpretation of estate law and his house
is included in the FMV of his estate, (which needs to be probated now), along with the RRSPs , which *cannot be transferred to you directly without closing the investments and paying the required taxes* which will have to be paid on any portion of the RRSPs (and other investments he had) as DISPOSED. CRA regards these assets the same as if your Dad disposed of these ONE MINUTE BEFORE HIS DEATH. 



> Probate is not needed to transfer certain kinds of assets. *Specifically, you do not need probate to transfer property that is held in joint names*. This is because *joint ownership carries with it a right of survivorship *of the other owner(s). For example, if a husband and wife own their home jointly and the wife passes away, the husband owns the house by right of survivorship and doesn't need probate to put the title in his name alone. Take note that this rule does not necessarily apply to assets that were jointly owned by the deceased and his or her children.
> 
> You also* do not need probate to transfer assets that have a named beneficiary. *
> 
> ...


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## dougboswell (Oct 25, 2010)

I have had to do a couple of these - one for a non-family person. Definitely the will needs to probated as you cannot access the bank account and RRSPs. With this 1 I used a lawyer who sent it to be probated so the heirs could not question anything.. With my mother's we dropped it off at the courthouse in the jurisdiction that she resided, they called a week later and we picked the papers up.

In both cases I never applied for or had a second probate. The next hassle after that was dealing with CRA. 

A lot of it you can do yourself - notify the company where he was drawing the pension from, and the government to stop CPP and OAS payments. If you receive extra payments you will have to pay the extra back. Until you have the probate papers you can take gas, hydro and property tax bills to the bank and they will pay them out of the frozen accounts as these are good faith bills. 

It would not hurt to pay for a legal opinion to make sure you know everything that has to be done. You will have to file his regular 2015 income taxes and then the final one for the clearance certificate. If you are not an expert on this get an accountant to do this. It costs a little money but less chance you will get hassles from the CRA.

Personally I would not let a bank get their hands on this as you already know they have quoted you a high % (to us but perhaps not to them). It is better that the 5% goes into your pocket less the accountant and lawyer fees. The bank would be using these 2 so you would be paying for them through the 5% anyway..


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## AltaRed (Jun 8, 2009)

I am only aware of one probate. Probate is simply the process of the court validating/declaring that the Will presented is the valid one. If it is a properly executed Will and properly witnessed by 2 witnesses, this should not present a problem to the court. Part of this process is to do a Will search (by a lawyer or notary) to ensure the Will being presented to the court is indeed the last one. Most (all?) provinces have a Will registry, usually Dept of Vital Statistics or similar, in which a properly drawn Will will have been registered with provincial authorities. If all this was done, it makes it easier to go through Probate.

To get to Probate one must have an inventory of assets and liabilities that go through Probate. An appraisal would be a good idea on the house just to ensure the value is correct (the court may insist on it anyway). Once Probate is obtained, some assets can then be liquidated, but not necessarily disbursed until all debts and taxes have been paid. Though since you are the sole executor and sole beneficiary, you are not at risk of being sued by yourself for disbursing the assets prematurely, so it is reasonable to disburse of most of the assets to yourself at that time, holding back enough to pay all debts and estimated income taxes due.

As already said, how the assets in the RRSPs are handled depends on whether the beneficiary of the RRSP is the Estate or a person. If the beneficiary is a person, the assets transfer* to that person outside of Probate and these assets are not listed in the Inventory of Assets and Liability for the Probate application. If the beneficiary of the RRSP is the Estate, then the assets of the RRSP have to be listed on the Inventory and go through Probate. 

* income taxes are payable by the Estate on the collapse of the RRSP. The financial institution will likely withhold a certain amount at that time. If not, the executor must set aside enough cash in the Estate bank account to pay for these taxes at income tax time.


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## Charlie (May 20, 2011)

That's a very simple estate, and since you're the only beneficiary, the consequences of getting it wrong are not that dire. 

Do not pay a percentage of the estate to manage it. Do get a lawyer for probate, and an accountant for the final taxes. If you know one, or the other he/she can recommend a colleague. 

Pay by the hour -- get a quote.

You could DIY, but just hire a pro unless you're really comfortable with this. Don't stress it too much. This does look straight forward so I wouldn't let the horror stories concern you too much.

Early in the game have the accountant give a rough estimate of taxes. Post about RRSPs is dead on. Sometimes there's a big tax hit there -- not much you can do about it, but you do want to know how much before you make plans with the inheritance.


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## Retired Peasant (Apr 22, 2013)

AltaRed said:


> I am only aware of one probate.


Still true in Ontario. As of Jan 1, 2015, in Ontario one has 90 days to file an 'Estate Information Return' with the Ministry of Finance. I think this is what IH3Money is referring to. More info www.forms.ssb.gov.on.ca/mbs/ssb/forms/ssbforms.../9955E_Guide.pdf


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## carverman (Nov 8, 2010)

Retired Peasant said:


> Still true in Ontario. As of Jan 1, 2015, in Ontario one has 90 days to file an 'Estate Information Return' with the Ministry of Finance. I think this is what IH3Money is referring to. More info www.forms.ssb.gov.on.ca/mbs/ssb/forms/ssbforms.../9955E_Guide.pdf


This URL returns error 404 (not found), but if you go into the main page and click on the link "Guide; Estate Information Return),
the PDF will be generated for you with all the rules under estate law in Ontario. 

Here is the actual URL. 
http://www.forms.ssb.gov.on.ca/mbs/ssb/forms/ssbforms.nsf/FormDetail?OpenForm&ENV=WWE&NO=9955E



> You must download Adobe Acrobat Reader (version 9.0 or above) to view/print PDF forms. Click here for further instructions
> 
> If PDF forms do not open in the latest versions of Firefox and Chrome, click here for the solution.


For a simple uncontested will only one probate is required to authenticate the will. But if he had several creditors, and owes money and the creditors submit their claims to
the residual estate, then it may have to go through the probate courts again... for determining distribution percentages. 




> Filing Requirements
> An Information Return must be received by the Ministry of Finance. It may be delivered to the Ministry of Finance in
> person, or sent by mail, courier or fax to:
> Ministry of Finance (8:30 am to 5:00 pm, Monday to Friday)
> ...





> It may also be delivered in person at select Service Ontario locations. For ServiceOntario Centre locations, hours of
> operation and telephone numbers, visit ontario.ca/serviceontario or call toll-free 1 888 745-8888 (TeletypewriterTTY
> 1 800 268-7095).
> If the date for giving an Information Return to the Ministry of Finance falls on a weekend or a holiday, the due date
> ...





> *Actual Value After Estimated Value Given*
> If you estimated the value of the estate when applying for an Estate Certificate, and gave an undertaking to the
> court to return with the actual value subsequently ascertained of the estate, you must provide the Ministry of
> Finance with at least two Information Returns.
> ...





> *Items NOT To Be Included*
> *If assets pass outside of the estate, do not include them in the calculation of value of the estate, e.g., do not include
> assets which were jointly owned with a right of survivorship.*


As I mentioned in a previous post..its getting more and more complicated each year, and you have to be on top of things when dealing with the Ministry of Finance in Ontario.

If you have never done this before, best let a estate lawyer or somebody competent in these matters handle it.

Gone are the days when the parent wrote a holographic will on his death bed (being in sound mind) and gave the family farm to his son(s) or daughter(s).

When two levels of tax man are involved (Ontario miinistry of Finance and CRA) you better have your "ducks in a row" in order not to run afoul of either taxman.
What is the two sure things in life? .... "Death and taxes!":frown: Everything in life is "temporary."


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## marina628 (Dec 14, 2010)

My brother had 2 years to get his stuff in order so he sold his house ,cashed out his investments paid the taxes on these while he was living as he had no spouse to transfer things to.He then gave away the money to the people he wanted to do something for and his will had me as executor and left me everything that was left behind and i assumed responsibility for taking care of the funeral ,debt,taxes etc.I didn't pay for a lawyer did it all myself.He died with a 18 year old and I take care of my niece ,she gets 40% of his Military Pension and full time university student.


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## AltaRed (Jun 8, 2009)

Getting back to the OP, if the OP does not want to undertake the challenge and the learning curve, the best suggestions I can make is for the OP to: 1) hire a family law/estate lawyer to prepare the Probate Application and to provide the OP with some guidance with respect to 'things to do', and 2) hire a tax accountant to do the T1 Final Return (and T3 trust return). There will be a T3 Trust return to do since there will be investment cap gains/losses and investment income from the assets in the RRSPs/RRIFs since the date of death (the date at which the RRSP/RRIF no longer are tax protected.

The OP can keep costs down by doing all the grunt work to develop the Inventory (assets and liabilities) for the Probate Application. The financial institution holding the RRSPs/RRIFs can provide the value of these accounts as of date of death, as can any bank for the bank accounts. These institutions will also provide the necessary tax documentation for tax returns. Just ask them in Letters of Direction (a copy of notarized will and death certificate will be necessary for them to ensure the OP has the legal right to be handling estate matters.


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## carverman (Nov 8, 2010)

marina628 said:


> My brother had 2 years to get his stuff in order so he sold his house ,cashed out his investments paid the taxes on these while he was living as he had no spouse to transfer things to.He then gave away the money to the people he wanted to do something for and his will had me as executor and left me everything that was left behind and i assumed responsibility for taking care of the funeral ,debt,taxes etc.I didn't pay for a lawyer did it all myself. He died with a 18 year old and I take care of my niece, she gets 40% of his Military Pension And full time university student.



Good for you if you can do it Marina.
How did you find the task of named executor, filing the necessary legal paperwork and the undertakings to settle and distribute the residual estate? 

It's always a lot easier in these matters, when you know you have two years to live due to a life threatening incurable disease and be proactive to distribute some of your estate while living. Only a few people can do that ahead of time when faced with that situation

However as an executor of an estate, you have to follow estate law. Some named executors can execute a will using the necessary forms to file at the courthouse.
Others are still working, or perhaps parents with young children, and simply incapable to follow the timelines specified, not to mention the deadlines that the Ministry of Finance states.

Not to say that most people can't do this, but those that attempt to do it without involving a lawyer, (or at least person that has done it before), can be intimidated if the steps are not followed as prescribed by the Ministry of Finance and the CRA. Unlike other legal issues in life, most people don't do this on a regular basis and if they agree
to be the named executor in the will, have no idea where to start, but accept the fact that they have to administer the estate and get it settled. 

The BIG time saver that saves some legal fees, is trying to find all the investments and liabilities (loans) the deceased might have had at time of death
and preparing a file with the investments and debts, for the revenue ministries, (or lawyer if that is the way they decide) , the estimated valuation of those assets and liabilities, 
and dealing with those investments for tax purposes, which the financial institutions will provide, when requested with a death certificate.


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## dougboswell (Oct 25, 2010)

If you are an executor and the beneficiaries are not your immediate family you will need a pretty thick skin. The beneficiaries will want their share immediately especially if they are in need financially. They can put tremendous pressure on you. They do not understand the concept of the clearance certificate and the CRA and how the executor is responsible for any shortfalls.


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## AltaRed (Jun 8, 2009)

dougboswell said:


> If you are an executor and the beneficiaries are not your immediate family you will need a pretty thick skin. The beneficiaries will want their share immediately especially if they are in need financially. They can put tremendous pressure on you. They do not understand the concept of the clearance certificate and the CRA and how the executor is responsible for any shortfalls.


True but that has no relevance for the OP. He is one and the same, and there is only one of him too. 

An additional comment: If the OP can find the last X years of the deceased's tax returns...and the NOA from CRA for each of those, it will help the OP determine whether the deceased was in 'good standing' with the CRA, i.e. no back taxes owing. In which case, he really would not need to seek a CRA Clearance Certificate (him being executor and beneficiary and the estate being well worth more than zero). My brother and I have no intention of seeking a CRA clearance certificate because we did our mother's taxes for some 20 years anyway. The OP will have to make an assessment of that and with the tax accountant, make a decision whether to file for one or not (the accountant will charge for filing such a certificate).


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## carverman (Nov 8, 2010)

AltaRed said:


> True but that has no relevance for the OP. He is one and the same, and there is only one of him too.
> 
> An additional comment: If the OP can find the last X years of the deceased's tax returns...and the NOA from CRA for each of those, it will help the OP determine whether the deceased was in 'good standing' with the CRA, i.e. no back taxes owing. *In which case, he really would not need to seek a CRA Clearance Certificate* (him being executor and beneficiary and the estate being well worth more than zero). My brother and I have no intention of seeking a CRA clearance certificate because we did our mother's taxes for some 20 years anyway. The OP will have to make an assessment of that and with the tax accountant, make a decision whether to file for one or not (the accountant will charge for filing such a certificate).


Are you sure about that? If you are an executor you take on the responsibility of ensuring the estate has no encumberances, it is distributed properly and the two gov'ts are satisfied,
Having a clearance certificate at least gives you the additional comfort level that they won't be coming after you asking for more.

Even, if the deceased has filed tax returns every year and paid all taxes due, there is always some issue where taxes may still be owing...such as income taxes in the year of death. 

Lets use 2015.
If the deceased with the will died before the end of the year and received gov't benefits and from a pension plan, there could bel be taxes owing.
The executor would receive the T5s by the end of February, and the taxes have to be paid by April 30th of the following year, or up to 6 months after death.



> If the death occurred between January 1 and October 31, the due date for the final return is April 30 of the following year.
> 
> If the death occurred between November 1 and December 31, the due date for the final return is six months after the date of death.


http://www.cra-arc.gc.ca/tx/ndvdls/lf-vnts/dth/fnl/menu-eng.html

http://www.cra-arc.gc.ca/tx/ndvdls/lf-vnts/dth/clrnc-eng.html


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## marina628 (Dec 14, 2010)

My brother's estate was very easy to do ,when he sold his house he gave away ALL of that money ,was easy to do knowing he has life insurance policies which were not subject to any sort of complex paperwork .He had one credit card and of course the funeral and cra final income taxes to do.My brother also had joint bank accounts with my parents since 2004 ,when all was said and done he had less than 50k in the joint bank accounts when he died and about 30k went to funeral , income taxes and he only owed 2500 to a credit card.As for his daughter ;technically ' she got nothing except his pension ,I was left his insurance policies and my brother told me how much and when to give to his daughter at milestones in her life.The reality is his ex wife would take the money from his daughter and she has already tried taking the monthly payment she gets now and tried to get her to go on a mortgage with her as well.
My brother has passed two years now and I know he would be happy with how things have turned out , I have taken my niece on some vacations and keep her grounded with her expectations and honestly she has no clue that when she is 30 she will get about $250,000 cash from her Dad and most importantly neither does her mother.Legally my brother left it to me and i am paying all income taxes on it in my name and invested it very conservatively but he was firm that he did not want her mom to get the money then spend it for her benefit and his daughter suffer for it later in life.


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## wendi1 (Oct 2, 2013)

Carverman, if the OP is the only beneficiary, he doesn't need to wait for a clearance certificate before doing the final distribution.

He will still be on the hook for any revisions to the deceased tax returns for the previous seven years, but at least he doesn't have to try and retrieve money from other beneficiaries, he just has to pay it himself.

Of course, he needs to pay the last year of taxes for the deceased out of the estate (assuming any taxes are owed).


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## AltaRed (Jun 8, 2009)

wendi1 said:


> Carverman, if the OP is the only beneficiary, he doesn't need to wait for a clearance certificate before doing the final distribution.
> 
> He will still be on the hook for any revisions to the deceased tax returns for the previous seven years, but at least he doesn't have to try and retrieve money from other beneficiaries, he just has to pay it himself.
> 
> Of course, he needs to pay the last year of taxes for the deceased out of the estate (assuming any taxes are owed).


I agree. The only time a sole executor and a sole beneficiary (being one of the same) would not disburse the assets and not get a CRA clearance certificate is if there is some risk of insufficient assets in the estate to cover the debts. In such cases, all creditors would get to fight it out and per legislation in most (all?) provinces, there is a tiered structure of creditors, i.e. who gets paid first, and who may left out to dry. An executor would not want to get caught up in 'negligence of duties' in premature disbursement of funds.

Hence why the very first step for the executor is to get a firm handle on assets and liabilities, and in particular, potential outstanding debts. Which is why a Creditor Notice published in newspapers is absolutely critical as the OP may not know what his father had really been up too, especially with the behaviours mentioned by the OP. It is also important to examine several years of past tax returns and NOAs to see if there might be any vulnerabilities there, especially underreporting of income.

I specifically mentioned that the CRA Clearance Certificate may not be needed because of the assets that seem to be in the estate, specifically RRSPs and Real Estate. The OP needs to know though that if debts exceed liquid assets, the house will have to be sold to pay for them. Depending on how positive the ledger is, or not, it might be best to sell the house and get it out of the way. I am never in favour of baggage hanging around, especially real estate.


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## Jaberwock (Aug 22, 2012)

The court filing fees to which you refer are what is commonly known as "probate fees". They are collected by the province, and Ontario's are one of the highest in the country. There is no Estate Tax.
You cannot disburse any funds to beneficiaries until the will has been probated, but the banks will usually allow you to pay funeral and incidental expenses out of the estate.

You will need to file the following tax returns:

1. A tax return for the deceased for 2015. 
Include all income up to the date of death. Any RRSP's are assumed to be fully withdrawn on the date of death and are treated as income in 2015 (unfortunately, that may put the deceased into the higher tax brackets). Any investments held at the time of death are assumed to have been sold at fair market value and any capital gains or losses have to be included in the tax return. However, it is not necessary to physically sell the assets, they can pass to the estate and eventually to the beneficiaries in kind. Capital gains on the principal residence are not taxable. Have the house valued, a high valuation is to your advantage because that value becomes the Cost Base against which you have to calculate any future gains or losses.

2. A rights and things return (optional)
This includes any money accrued to the deceased at the time of death, but not paid. It might include for example dividends declared prior to the date of death but not paid until after the date of death. Most people won't need to bother with this.

3. Tax returns for the estate
Any income earned after death, but before the distribution of the funds to the beneficiaries is taxable in the estate. This is an opportunity for you to get some of your money back in some cases. The estate return does not get any personal tax credits, but it does have the same progressive tax brackets as an individual. If you personally are in a high tax bracket, then the estate will pay less tax than you will on invested funds. Take your time winding up the estate, open a bank account for the estate, leave the income producing assets in the estate, fill in tax returns for the estate for a couple of years. You can save enough tax to pay for the probate fees and more.

I paid a lawyer about $2,000 to do the probate and felt I was being ripped off. I did the taxes myself. It is no more difficult than doing a personal tax return. However, if you don't feel comfortable then hire an accountant. There is no reason to pay the extortionate fees quoted by the banks to handle this stuff.

Don't forget to claim the $2500 death benefit from CPP.


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## AltaRed (Jun 8, 2009)

There is a benefit to the 'rights and things' tax return if the person dies at the beginning of the month and CPP, OAS and annuity payments are paid later in the month, i.e. income earned but not yet paid. One gets the benefit of the personal deduction for this return and reduces tax owning either of 1. or 3. above.


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## Eclectic12 (Oct 20, 2010)

carverman said:


> ... Lets use 2015.
> If the deceased with the will died before the end of the year and received gov't benefits and from a pension plan, there could bel be taxes owing.
> The executor would receive the T5s by the end of February, and the taxes have to be paid by April 30th of the following year, or up to 6 months after death.


YMMV ... while it may not apply to the OP, my Mom and Aunt as executors filed paperwork to say my uncles estate was complex. The end result is that they had at least two tax years, including two sets of personal exemptions etc. to spread out the tax hit. I seem to recall three years but I'd have to check.


As I say ... the OP's situation sounds much less complex so this may not be possible.


Cheers


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## AltaRed (Jun 8, 2009)

Eclectic12 said:


> YMMV ... while it may not apply to the OP, my Mom and Aunt as executors filed paperwork to say my uncles estate was complex. The end result is that they had at least two tax years, including two sets of personal exemptions etc. to spread out the tax hit. I seem to recall three years but I'd have to check.


If true, that would have involved ownership of a business. For personal (not business windup) returns, there would (should) have been only one personal exemption year, the year your Uncle died (the T1 Final Return) plus any Rights and Things return spoken to above.

All income up to the date of death including accrued interest in compound GICs for example would have to be declared on that T1 Return. All income earned by the Estate after date of death, and thus all future year returns would have been Trust (as in auto-testamentary trust) returns because there is no longer an individual associated with the assets and there are no personal exemptions in Trust returns.

Starting in 2016, trust returns will be taxed at the highest marginal tax rates to clamp down on people putting things in Family Trusts and spreading out the tax hit to individual beneficiaries. IOW, there will no longer be a benefit of keeping taxes in the Trust as long as possible. There may be some grandfathering for existing trusts. The only reason I know that is that I looked at that for my mother's case (she died this past Spring). It is to our advantage to wrap up her estate in 2015.


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## Eclectic12 (Oct 20, 2010)

No business involved ... mostly house, investments, pensions (private plus CPP), silver coins, life insurance and such. 
All I know is that I overhead my mom & aunt discussing the paperwork to apply and that the paperwork had been accepted. 


Maybe the process has changed but I thought I'd seen estate lawyer advice posts saying the same thing.



Cheers


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## Numbersman61 (Jan 26, 2015)

marina628 said:


> My brother's estate was very easy to do ,when he sold his house he gave away ALL of that money ,was easy to do knowing he has life insurance policies which were not subject to any sort of complex paperwork .He had one credit card and of course the funeral and cra final income taxes to do.My brother also had joint bank accounts with my parents since 2004 ,when all was said and done he had less than 50k in the joint bank accounts when he died and about 30k went to funeral , income taxes and he only owed 2500 to a credit card.As for his daughter ;technically ' she got nothing except his pension ,I was left his insurance policies and my brother told me how much and when to give to his daughter at milestones in her life.The reality is his ex wife would take the money from his daughter and she has already tried taking the monthly payment she gets now and tried to get her to go on a mortgage with her as well.
> My brother has passed two years now and I know he would be happy with how things have turned out , I have taken my niece on some vacations and keep her grounded with her expectations and honestly she has no clue that when she is 30 she will get about $250,000 cash from her Dad and most importantly neither does her mother.Legally my brother left it to me and i am paying all income taxes on it in my name and invested it very conservatively but he was firm that he did not want her mom to get the money then spend it for her benefit and his daughter suffer for it later in life.


Just make sure your will is current and reflects your intentions regarding your niece. It may be a good idea to provide an explanation in the will as to the reason for the bequest so that it can't be challenged by other family members.


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## Retired Peasant (Apr 22, 2013)

Jaberwock said:


> You will need to file the following tax returns:
> 
> 1. A tax return for the deceased for 2015.
> Include all income up to the date of death. Any RRSP's are assumed to be fully withdrawn on the date of death and are treated as income in 2015 (unfortunately, that may put the deceased into the higher tax brackets). Any investments held at the time of death are assumed to have been sold at fair market value and any capital gains or losses have to be included in the tax return. However, it is not necessary to physically sell the assets, they can pass to the estate and eventually to the beneficiaries in kind. Capital gains on the principal residence are not taxable. Have the house valued, a high valuation is to your advantage because that value becomes the Cost Base against which you have to calculate any future gains or losses.


If the person leaves $$ (or even investments in kind) to charity in their will:
1. are those investments still deemed disposed on date of death, or is the donation considered given on the date of death?
2. is that donation claimed on the deceased's final return, or on the estate's return?


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## Ih8Money (Dec 3, 2015)

Hi everyone, I've been so busy between taking calls for my father from work and making appointments, it's been hectic.

However, because of all your help, I feel I can and probably should do this on my own with a tax person and lawyer and I think I'll be alright.
In fact, I check this thread every couple of hours on my phone to see whatever other detail I may have missed. It's my homepage on my phone. 


One thing as for the lawyer probating it, because I spoke to one and I explained to him the situation he still said it has to be probated.
How do I go about doing so, do I just find a local court and go there and show them everything and that's it "Hi I'd like to probate this Will."?

Getting through to CRA is a pain, but that's something you already knew no doubt.

Again, I can't thank you all enough. Really.


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## Ih8Money (Dec 3, 2015)

As an add on, I forgot to mention, I have an Aunt who said she's willing to help me financially by putting her condo (which her daughter is living in) on mortgage to help pay off the line of credit on my Dad's house.

So I'm assuming for this to work properly or for the bank to okay it, would I have to be a "joint tenant" under the condo or can it be done just straight with her name and she comes to the bank signing off on it?


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## AltaRed (Jun 8, 2009)

You have to fill out all the requisite materials (forms) for Probate and have the evidence* (such as bank and investment statements, LOC balance, credit card statements) ready to assure the Court you have covered off all Assets and Liabilities. You also need to have done a Will search with the provincial registry. This is where a lawyer can be of some assistance... i.e. to review your completed materials before making a submission to the Court clerk.

This is out of my scope of knowledge but I would think the issue with the LOC on the home is not a matter for Probate since Probate is based on assets and liabilities on the date of death. Any loan from your Aunt to pay off the line of credit would likely need to be a formal loan agreement between your Aunt and the Estate with you signing as Administrator (pre-Probate). Ask the lawyer how to best arrange this. The more logical option to me would be to tell the bank holding the LOC that they will have to sit tight and not get paid anything until the Estate is ready for disbursement and title is about to be signed over to you. Then have the loan agreement between you and your Aunt. Do you really want to own this property as beneficiary?

* evidence also includes valuation of equity in a credit union or a cooperative, personal belongings estimate (furnishings, valuables such as original art, coin and stamp collections, etc.), vehicles of all sorts, etc. The lawyer should be able to advise you when rough estimates on 'average' personal belongings can be a simple number like $500, $5000, or whatever to be acceptable to the Court, but that valuables may need appraisals done. It depends on what the Courts typically want in your province. Don't try to lowball numbers.

Added: Forget about the CRA for a few months since no tax returns need to be submitted until April 30th (or later - depends on date of death). If a CRA tax installment is due on Dec 15th coming up, have the Banker pay it for you with funds from your father's bank account.


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## carverman (Nov 8, 2010)

AltaRed said:


> This is out of my scope of knowledge but I would think the issue with the LOC on the home is not a matter for Probate since Probate is based on assets and liabilities on the date of death. Any loan from your Aunt to pay off the line of credit would likely need to be a formal loan agreement between your Aunt and the Estate with you signing as Administrator (pre-Probate). Ask the lawyer how to best arrange this. The more logical option to me would be to tell the bank holding the LOC that they will have to sit tight and not get paid anything until the Estate is ready for disbursement and title is about to be signed over to you. Then have the loan agreement between you and your Aunt. *Do you really want to own this property as beneficiary*?


Oh, what complicated webs we weave. No he probably doesn't knowing the details now, but he is stuck with it and once the house is sold, he may get the residual from the
estate, otherwise the gov't takes over and he gets nothing.

It sounds like this is a secured line of credit the deceased arranged on the home, which the bank will discharge, once they are paid in full, plus any outstanding interest owing and their legal fees, that can be significant to discharge it. That would have to be done first and cleared before the house can even be put up for sale.

It could get messy, if the aunt who did not co-sign on the secured LOC , now had to get involved with a 'formal loan" to the estate of which Ih8money is the administrator. 
That would seem like money coming into to the estate, to clear a debt on the estate, which would then be seen as adding to the calculated value of the estate already. ie: House is worth so much..say $500K, and the LOC lien registered against it is say $50K. The FMV of the house, estate is remains the same, but the loan money to pay off the LOC from other sources could be considered a credit, not a debit, so it could even be counted as an asset (money paid to the estate) since it doesn't appear to me to be a disbursement of the proceeds of the estate. 
To make it easier to calculate the FMV of the house and release the lien in order to sell it, the LOC needs to be paid off first, then start the probate proceedings.


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## carverman (Nov 8, 2010)

Ih8Money said:


> As an add on, I forgot to mention, I have an Aunt who said she's willing to help me financially by putting her condo (which her daughter is living in) on mortgage to help pay off the line of credit on my Dad's house.


If she is the owner of the house that her daughter is living in, and there is sufficient equity in the house, (assuming there is still a mortgage on it) , then the aunt can arrange with her bank or the bank that holds her mortgage to arrange for another mortgage (SECOND MORTGAGE) to get the money required to repay the secured LOC on the deceased estate..up to probably 80% of the appraised FMV.

The problem is whether the aunt has enough income or resources to make the additional mortgage payments to convince the bank(s) that she can make the new increased mortgage payments for the first mortgage (if any) and the new second mortgage. Most banks are hesitant to arrange second mortgages as there is less security for the second mortgage holder, so consequently the interest rates are always higher. Sometimes you have to go to a private mortgage company lender to get one.



> So I'm assuming for this to work properly or for the bank to okay it, would I have to be a "joint tenant" under the condo or can it be done just straight with her name and she comes to the bank signing off on it?


 I don't believe you can be added as a joint tenant. You would have to be added as a " tenant in common" LEGALLY on the title of the condo, at the time when your aunt bought the condo.
This way you would be considered part owner of the condo. You and your aunt are not considered "spouses of each other', being a relative (nephew) so "joint tenant"may not cut it. as this involves the "right of survivorship" (succession) . 

From my experience; my mother and I were joint tenants on my property, but "NOT spouses of each other but "with "right of survivorship". Because of my mothers age (91), I got her to agree to change her part ownership that to my name only, so that her estate is not subject to capital gains on her half ownership of my house at time of her
death. I am now the 100% legal owner of my property, but I had to arrange for a lawyer to file this in the county court land office. 

lets say it was possible for you to be a "joint tenant" on your aunts property, your estate would own a part of that condo, capital gains on the part of your aunt's condo
would be payable if she sold it, since it is NOT your principal residence. 

But maybe a estate lawyer can advise you if you can be added now. It would require legal and filing fees to add you to your aunts property title. 
http://estatelawcanada.blogspot.ca/2010/01/joint-tenants-vs-tenants-in-common.html


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## AltaRed (Jun 8, 2009)

carverman said:


> It sounds like this is a secured line of credit the deceased arranged on the home, which the bank will discharge, once they are paid in full, plus any outstanding interest owing and their legal fees, that can be significant to discharge it. That would have to be done first and cleared before the house can even be put up for sale.


I don't think so. I had my RE lawyer discharge an LOC at time of sale of my last property, the same as it would be with a mortgage. It is just the lender had first call on proceeds and the rest was netted to me.



> It could get messy, if the aunt who did not co-sign on the secured LOC , now had to get involved with a 'formal loan" to the estate of which Ih8money is the administrator.
> That would seem like money coming into to the estate, to clear a debt on the estate, which would then be seen as adding to the calculated value of the estate already. ie: House is worth so much..say $500K, and the LOC lien registered against it is say $50K. The FMV of the house, estate is remains the same, but the loan money to pay off the LOC from other sources could be considered a credit, not a debit, so it could even be counted as an asset (money paid to the estate) since it doesn't appear to me to be a disbursement of the proceeds of the estate.


I don't think so but it pays to ask the lawyer. If there is a formal loan agreement between the aunt and the estate, one debt (LOC) is being substituted for another debt (personal loan). That loan would need to be included as a debt in the Inventory. I still think the best solution would be to obtain Probate first and then deal with the LOC. I think the OP should be separating the administration of the estate from how to finance the house at a later time.

Added: It is going to cost hundreds of dollars to enter into the loan agreement with the estate to pay off the LOC, just to then have to turn around and revise these agreements (and pay again) when the OP takes possession (title).


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## carverman (Nov 8, 2010)

AltaRed said:


> Added: It is going to cost hundreds of dollars to enter into the loan agreement with the estate to pay off the LOC, just to then have to turn around and revise these agreements (and pay again) when the OP takes possession (title).


That's what I was referring to. It could get a bit convoluted legally if not done in the right order, and that would cost a lot more in the long run. 
There is also the possibility land transfer tax that could be applicable, because their is a lien (LOC) on the property, and the property is not a straight gift from the father to the son (executor). 



> Generally, transfers from parents to children are not exempt if there is an encumbrance such as a mortgage registered on the property. It can be exempt if the transfer is a gift for nominal consideration and there are no encumbrances registered on the property.


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## marina628 (Dec 14, 2010)

Numbersman61 said:


> Just make sure your will is current and reflects your intentions regarding your niece. It may be a good idea to provide an explanation in the will as to the reason for the bequest so that it can't be challenged by other family members.


Way ahead of you my will was done 2 months after my brother died as was my husband's and of course my niece is in both.


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## Ih8Money (Dec 3, 2015)

Thought I'd come back after being so busy with family and friends and this whole estate thing and thank everyone. While things aren't completely done with, a few things have been done.
Thankfully, the bank told me I didn't have to go through probate since I'm the sole beneficiary as well as the executor. But from my understanding the transfer of funds and RRSPs stays out of the estate so it avoids the (probate) fees which I'm grateful for. Now I have to deal with the land registry and get the property/title under my name, so I'm not sure if I'm out of the woods yet in regards to probate in relation to the property. It's all a bit overwhelming but (obviously) it has to be done.
I really do appreciate all the input every single one of you has given.


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## Eclectic12 (Oct 20, 2010)

dougboswell said:


> Sorry about your father


+1.




dougboswell said:


> Work pensions, CPP and OAS pensions stop after the passing...


YMMV depending on the pension provided by the employer, what benefits were selected as well as possibly how long the pension was collected.

For example, my dad selected for his defined benefit pension to take a lower pension so that one his death, my mom would have his pension. Had they both died before ten years worth was paid out, there would have been a lump sum payout (i.e. 10 years payout - paid to date) to my mom's estate.

He lived longer than ten years and she is a year or two away from collecting for longer than he did so that the ten year guarantee won't apply.


If it is a defined contribution pension, then there is any value left in it ... the estate or a beneficiary (or both) could be receiving what's left (possibly subject to income taxes).


Bottom line is that it is important to sort out what the terms are.


Cheers


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## carverman (Nov 8, 2010)

Eclectic12 said:


> +1.
> 
> 
> 
> ...


I think that is called survivor benefit, and you have to have a beneficiary selected and registered with the pension plan. The caveat here is that if you remarry, your next spouse cannot claim
any survivor benefit from your DB pension, only the spouse you were married to before you started the pension. 



> In the event of your death, your eligible survivor will be entitled to a monthly allowance equal to half of the pension benefit you would have received before age 65 (calculated before any applicable reduction).
> http://www.tbs-sct.gc.ca/psm-fpfm/pensions/plan-regime/survivor-survivant-eng.asp#ent-adm





> He lived longer than ten years and she is a year or two away from collecting for longer than he did so that the ten year guarantee won't apply.


This is another example of the escape clauses of these DB pension plans.
[/QUOTE]


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## Eclectic12 (Oct 20, 2010)

carverman said:


> I think that is called survivor benefit, and you have to have a beneficiary selected and registered with the pension plan.


I'll reply in more detail when I've had a chance to look up the details as being single, I've glossed over the spousal bits.

In an case, mainly I'm talking about the guarantee ... as a single person, if I get paid for one year's worth of pension - my estate or beneficiary will be paid the other nine years. At minimum, my DB pension has to pay out ten year's worth of $$$ once it is started.




carverman said:


> This is another example of the escape clauses of these DB pension plans.


Actually it is a protection to ensure the estate isn't shortchanged. I would call that part about where if I die a month before starting the pension then they only have to pay my estate my contributions + employer contributions + "investment growth" more likely an "escape clause".


As I say, I'll need some time to review the married section but in the meantime, my point is that without the details, the idea that "death = no further payments" may or may not be the reality.


Cheers


*PS*

Even the "employee + employer contributions" could be suspect, in the OP's case.

My sister's neighbour was quick to interrupt our discussion as "everyone knows DB pensions are employer contributions only". She was astounded to learn that most DB pensions require the employee to contribute.


The key here is the DB pension is a contract like a mortgage. There's lots of general info plus a few things mandated to be the same in the jurisdiction but there is a lot that is determined by what was setup and is written in.


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## Daniel A. (Mar 20, 2011)

Not all DB pensions are created equal.

My DB pension was funded only by the company no contributing from me, the downside was that there was no input allowed from the employee's.
Fortunately it is managed by a third party and the company does not have access to the funds.
Currently the pension is 100% funded. 

My wife in the event of my death would continue to receive 100% of the pension and I do expect her to outlive me. 
At the time of applying for my pension I had a choices as to what she could receive starting at 66% then 75% on to 100%, I took the 100% option as it only made a 200.00 dollar a month difference in my monthly pension.


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## Eclectic12 (Oct 20, 2010)

Daniel A. said:


> Not all DB pensions are created equal.


I'd have put it that the authority sets the foundation but the rest of the floors are up to the employer (to use an analogy).

That's why I liked linking it with mortgages. As I understand it, the legislation dictates how the interest charges are calculated but there is lots of variation for the features (ex. double up payments, payment "holidays", lump sum payments against principal, accelerated payments, etc.). Though as I say, my experience is the employer sets the terms (with the help of a pension consultant/expert) as well as decides when changes are going to be made.




Daniel A. said:


> My DB pension was funded only by the company no contributing from me, the downside was that there was no input allowed from the employee's.


I have heard of some public pensions having some employees on the pension board. None of my private pensions have had any employee input beyond the employee's being happy or complaining at the latest "state of the pension, here's the changes being implemented" meeting. 

So unless someone has other examples ... it does not seem to me that employee contributions translates to employee input.


Cheers


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