When a loved one passes away, whether it is expected or not, their death begins not only the process of grieving by those left behind, but also the process of dealing with what the deceased family member has left behind. There is often uncertainty and apprehension felt by those in charge of the estate administration. One of the most frequent questions we are asked is “what deadlines do I need to know about?”.
Missing an important due date can have serious consequences, including legal liability. Fortunately, in administering an estate there are only a few deadlines that executors (appointed under a deceased person’s will to administer their estate) or administrators (appointed by a court to administer an estate where there is no will), sometimes termed in Ontario as “estate trustees”, need to be concerned about.
Families and estate trustees often worry about tax deadlines. There is usually no immediate need to file a tax return for a deceased individual (if they were a director and officer of a corporation, however, tax filings may need to be completed for the corporation). A deceased’s final or terminal tax return will not be due for at least six months from date of death: April 30th of the following year if the death occurs between January 1st and October 31st, and six months from date of death if the death occurs between November 1st and December 31st. Further, if a deceased person dies after January 1st and before April 30th and has not filed their last year’s tax return before their death, their estate trustee has six months from their date of death to file the past year’s tax return. If an estate trustee is unable, through no fault of their own, to meet these deadlines, they can request Canada Revenue Agency waive the penalties and interest otherwise owing for late-filed returns.
When a deceased person dies, there may be the need to bring a claim on behalf of the estate or there may be potential claims brought against the estate. Potential claimants and the estate trustee will want to know when such claims must be made. Generally, there is a two-year limitation period in Ontario for claims, including claims by an estate trustee on behalf of an estate. Two claims which can arise in an estate have different deadlines, however. One is a claim by a surviving married spouse for equalization of property under the Family Law Act (Ontario). This claim 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 (note that an equalization claim cannot be brought by the estate trustee against the surviving spouse, although family law proceedings commenced prior to death can be continued and are subject to different deadlines). The other is a claim by a dependent for support from the deceased’s estate. In Ontario, this claim must be brought within six months of a certificate of appointment being issued by the court to the estate trustee.
There are a host of other steps which may need to be taken to administer an estate, including informing various government authorities and financial institutions of the death and applying for a certificate of appointment. Fortunately for anxious families and conscientious estate trustees, none of these tasks are subject to any legal deadlines. Estate trustees should strive to complete all or most of the estate administration within one year of death, to the extent this is possible (it is unlikely, for example, that all tax filings will be completed and processed within this time given current average Canada Revenue Agency processing times), but most estate administration tasks have no “hard” deadlines. Probate applications can be (and often are) brought years after a person dies, and there is generally no specific date by which government authorities or financial institutions must be informed of a person’s death.
When a loved one dies, the most important immediate matters are usually to deal with the funeral and to begin the grieving process. Fortunately for most families, these are the only matters that will require immediate attention and the other matters can be dealt with in due course. Experienced advice by an estate practitioner at the outset of the estate administration can provide guidance and peace of mind by assisting to identify issues and relevant timelines and ensure deadlines are observed in a timely way.