Reporting Requirements Upon Death

Coping with the death of a loved one is difficult and a huge emotional loss. Nevertheless, it is critical to follow appropriate reporting procedures at the time of death to avoid any hassles or financial loss in the future. It is usually the intention of the deceased person to ensure that maximum amount of his wealth flows to the loved ones. Therefore, it becomes the responsibility of the loved ones to take appropriate steps at the time of death. The death must be immediately reported to the government authorities like Service Canada and Canada Revenue Agency.

The first step that needs to be completed at death is getting the death registered. Although different provinces have minor differences in the procedures, deaths generally are registered in the same way across Canada. The Funeral Director plays a vital role at the time of the death. He/she is generally responsible for overseeing the process of death registration. The funeral director submits the following two documents to the municipal clerk's office:

A Medical Certificate of Death: the attending doctor or a coroner completes this form, outlining the cause of death.

A Statement of Death: a family member and a funeral director complete this form, together. It includes personal information about the deceased (e.g., family history, age at death, place of death).

Once the required documents have been submitted and death has been registered, the provincial government (i.e., Service Ontario) will issue a death certificate. The Request for Death Certificate application can be submitted by either mail or online.

After reporting the death to the province and obtaining a death certificate, the following agencies should be informed immediately:

Canada Revenue Agency (CRA):

It is important to report the death of an individual to Canada Revenue Agency because CRA is responsible for various types of payments to individuals such GST/HST, Canada Workers Benefit (CWB), Canada Child Benefit (CCB), and the Climate Action Incentive (CAI). It is important to stop those payments once an individual has passed away. If any cheques are received after death, they should be returned. However, direct deposit is becoming the most popular mode of payments these days and if a payment is received in the account, it will be the responsibility of the trustee to ensure that the money is returned to the CRA. The following information will be required by the CRA in order to report the death of an individual:

a copy of the death certificate,

the deceased’s social insurance number,

a complete copy of the will or other legal documents such as a Grant of Probate or Letters of Administration showing that the reporting individual is the legal representative, and

the new mailing address for the estate, if applicable.

There are two ways to report the death to the CRA:

By phone at 1-800-959-8281, or

By mail, by filling out the form on the back of “Information Sheet RC4111, What to Do Following a Death” and sending it to the tax centre applicable to the province of the applicant.

Service Canada:

Reporting to Service Canada is important as Service Canada is responsible for payment of CPP Pension, Old Age Security Pension and Social Benefits. The entitlement of these payments ceases after the month of death of the deceased person. Therefore, Service Canada should be informed immediately to stop payments for the deceased.

A surviving spouse or child may be eligible for the following benefits after the death of a spouse or parent:

Survivor Allowance: It’s a benefit out of deceased's old age security for low-income spouses who do not receive Old Age Pension themselves.

Death Benefit: It is a one-time benefit paid to (or on behalf of) the estate of a deceased Canada Pension Plan contributor.

Survivor's Pension: It is a monthly pension paid to the survivors of a deceased Canada Pension Plan contributor.

Children's Benefit: It is a monthly benefit paid to dependent children (under age 18 or between 18 and 25 and attending school) of a deceased Canada Pension Plan contributor.

The following information must be included when reporting a death to Service Canada:

Full name of the deceased

Address

Social insurance number

Date of birth

Date of death

Name and address of the trustee/executor or the person responsible for handling the deceased's affairs.

Reporting to Financial Institutions:

Upon death, the accounts of the deceased should be closed and the amounts transferred to the estate of the deceased. In order for the bank to close the accounts, the bank will request the following documents:

Death certificate

Proof of executor status

A copy of the will or Grant of Probate

For further information please contact Softron at 1-877-SOFTRON or visit www.softrontax.com