When someone passes away, they have bills that need to be paid, income tax returns that need to be filed, and numerous other expenses. It is the responsibility of the estate trustee to search out all the debts of the deceased, close the accounts and pay the balances out of the assets of the deceased person. One or more tax returns may need to be prepared and any balance owing must be paid to the Canada Revenue Agency.
The trustee is entitled to compensation for the work they perform whether they are related or not, whether they are also a beneficiary or not. The trustee compensation is a tax-deductible expense to the estate, and taxable income to the trustee.
There may also be legal and accounting expenses associated with handling an estate.
Estate administration tax (also known as probate fees) can be another expense of the estate if the will is subject to probate.
Before any distributions are made to the beneficiaries, the executor must account for the debts and expenses of the estate and satisfy these obligations.
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Karin Rimnyak, Certified Financial Planner®
David Dryburgh, Certified Financial Planner®
Ian Barrie, Certified Financial Planner®
This information has been prepared by Karin Rimnyak who is an investment Advisor for iA Private Wealth. Opinions expressed in this email are those of the Investment Advisor only and do not necessarily reflect those of iA Private Wealth. iA private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.