If you have been a regular reader of our blogs, then I am hoping you have learnt more than a few things about estates and trusts. At the very least, I expect that you now have a will if you didn’t before with executor(s) appointed and beneficiary (ies) designated and so on.
What if someone you know or know of dies intestate i.e. without a will and you are asked (or depending on the circumstances have some obligation) to file the terminal return and other tax flings that may be required on behalf of the deceased?
When you file a tax return on behalf of someone else, an authorization is usually required. A copy of the will is filed with the return to substantiate the authorization. When a person dies intestate, normally someone must go to Court to be appointed administrator. If the appointment is for the sole purpose of filing tax returns, the costs of securing the appointment could be a financial hardship. Further, it appears the Canada Revenue Agency (“CRA”) has not provided clear directions or guidelines on what should be done in this scenario.
I understand from some recent commentary by Lorn Stanners CPA, CMA, on the subject, that the CRA is looking into updating its current guidance with procedures related to this matter.
In the meantime, in the absence of documents to support a legal appointment, the CRA suggest writing to the T1 Speciality Service Unit attached to the Tax Centre where the deceased’s return would be filed. You would then be required to inform the CRA of your relationship with the deceased, as well demonstrate basic and specific knowledge of the deceased’s affairs.
Happy New Year and Happy Reading.