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Originally Posted by I-Hate-Hulse
Some great advice from many people here - thank you to all. Lots to think about as we run out the clock here. My family aren't the Huxtables so lots of imperfect situations and people to navigate.
I'm curious what you mean about by this. The T3GRE seems to be about the estate reporting income after death, so are you saying to sell all income bearing securities / property? (and hold everything in non interest bearing cash accounts?)
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A lot of people think trust returns are required after death. They aren't. If you can avoid filing a trust return, I'd recommend it. Only file trust returns if you have a very complicated estate that needs extra time to clean up.
I'm definitely not saying to keep everything in non interest bearing cash accounts. More like less long term GIC after death (or not getting rid of annoying things that could trigger a rights or things filing earlier). Get third party appraisal reports on properties as at the date of death for deemed disposition if they will be transferred to someone etc.
But I actually meant more admin like, like being aware that special rules for the final return on the CRA website significantly more complex than doing a normal personal tax filing. You don't have to know the rules. Just know enough that you make sure to give yourself several months extra time acquiring the relevant tax information without unnecessary panic and confusion to yourself and the prepper. Especially since you might have to do a lot of hunting for stuff you didn't organize yourself.
Things like talking to someone who knows about final returns right away a few months after the date of death and you've had a chance to do the other administrative tasks, grieve etc. That way you can prep and accumulate important information over many months vs doing it in a tight time line. Prep copies of the previous years tax return, contact CRA to notify them that you're the legal representative, gain access to the MyCRA portal information (as a rep), dig through boxes, argue with people with the wills etc. to get access to accounts, summarize and know what types of accounts they have, dig through boxes etc. Figure out what information that should be compiled, stuff to look for what to avoid and not do etc. so that you can slowly accumulate the required information over time. Other things like getting a third party appraisal on assets that will not rollover (ie: Spouse etc.) and will transfer to a non-arms length party/beneficiary etc. so you're not panic hiring someone to get an appraisal to finish off that return by the deadline to file the return accurately. Heck, if there's a bit of extra time in the calendar year, there might even be a chance to strategize for tax purposes.
The aim is to have the tax affairs deem to dispose and transfer ALL of the assets for tax purposes from the individual and transfer/distribute it "for tax purposes" to the surviving spouse/beneficiaries T1 Final. In the next tax year, the assets/income from those assets should be taxed in the hands of the spouse/beneficiary instead of a trust. Keep in mind, "for tax purposes" is a little bit different than what some may think for legal and probate purposes.