Key dates for estate administration

Timelines that estate trustees must follow

Overused quote alert! “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”

The above statement by Benjamin Franklin in a letter to Jean-Baptiste LeRoy in 1789 is often abbreviated, but the essence is, of course, a modern idiom, and in general we are all pretty certain about death and taxes. (For an interesting lesson on the origin of Benjamin Franklin’s statement, which it turns out he did not coin, see here.)

However, what is often not certain is what to do following death and the critical dates that must be met. In this blog, I review some key concerns and deadlines to be considered after someone dies. For a more extensive overview of the basics of the administration of estates, see our Advisory on Estate Administration Basics.

Most matters are not subject to timing issues or require immediate attention, although estate trustees (the current Ontario term for executors or administrators) should administer an estate in a timely fashion, and can be criticized for failing to do so.

The funeral and disposal of remains comes first. Family members’ views of how these should be handled should not be ignored, although ultimately the estate trustee has final authority to make these decisions.

The estate trustee should also determine any immediate needs of the deceased’s dependants who relied upon them for financial support.

The estate trustee should also notify insurance companies providing coverage for assets – such as a house or automobile – of the death and to ensure ongoing and adequate coverage in case of accident or fire etc. It is also important to secure any vehicles and usually to ensure they are not used in the interim period of the estate administration, as the estate trustee will be responsible for any injuries or losses resulting from use of such vehicles while they remain estate assets.

It is important to review the will and confirm the estate trustee’s authority to act, or confirm that no valid will appears to have been made by the deceased, and as a result, under applicable court rules who will be entitled to apply to court to administer the estate.

Tax deadlines

Income tax deadlines should be considered and diarized to ensure they are not missed, which can result in penalties and interest. The following are typical tax filings necessary for an estate in approximately the first year after death:

Income tax returns for any taxation year prior to the year of death not previously filed – due April 30 of the year after the end of the taxation year for which the return is being filed (except if the person died after the end of the previous taxation year, but before April 30 of the following year, in which case the deadline for filing the previous year’s return will be six months after his or her date of death);
A final or “terminal” income tax return for the year of death covering the period from January 1 to the date of death – due April 30 of the year following the year the person died (except if he or she died between November 1 and December 31, in which case the deadline for the terminal returns will be six months after his or her date of death, with further extensions if the deceased or their spouse was carrying on a business in their year of death).

Other necessary tax filings and elections, such as for corporations, to ensure graduated rate estate status and post-mortem tax planning, may also be necessary. For more information on the taxation of estates and trusts, see our Advisory Estate and Trust Taxation: Important Issues.

There are also certain claims which may be made by a dependant, spouse, or creditor which are subject to specific legal deadlines.

Generally, there is a two-year limitation period in Ontario for claims, including claims made by an estate trustee on behalf of an estate. A claim by a surviving married spouse for equalization of property under the Family Law Act (Ontario) must be made within six months of the date of death of the deceased spouse unless an extension is obtained before the expiry of the six-month period. A claim by a dependent for support from the deceased’s estate must in Ontario be brought within six months of a certificate of appointment being issued by the court to the estate trustee.

Estate deadlines are often anxiety-producing, being the “unknown unknowns” (thanks Donald Rumsfeld for this great phrase!) to most people. This is why it is helpful, but usually not urgent, for the estate trustee to obtain preliminary legal advice, which often provides not only clarity and answers to initial questions, but also peace of mind that nothing of immediate importance is being overlooked.

Susannah Roth is a partner at O’Sullivan Estate Lawyers, based in Toronto. Her practice focuses on estate administration, including cross-border and multijurisdictional administration, advising attorneys and guardians of property, executors, administrators and beneficiaries, real estate transfers and rectification, estate planning (including wills, powers of attorney, insurance and testamentary trusts), and estate litigation. This article originally appeared in the O’Sullivan Estate Lawyers blog. Used with permission.

Notes and Disclaimer

The foregoing is for general information purposes only and is the opinion of the writer. Commenhts are limited to the law of Ontario, Canada. It is not intended to provide specific personalized advice on any individual situation, including, without limitation, investment, financial, legal, accounting or tax advice. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate to your particular circumstances.