Updated March 2026

Death is a traumatic time for friends and family. The next of kin, legal representative, or executor has the added responsibility of dealing with the deceased’s financial matters—including taxes.

Added stress is the last thing you want your loved ones to go through. For this reason, it’s essential to ensure that your wishes are clear and that you have the appropriate legal documents prepared before you pass. While this won’t remove the grief, it will significantly reduce the administrative burden on those you leave behind.

Make it Easier on Your Loved Ones

To make things easier on your next of kin, consider taking these proactive steps today:

• Get your affairs in order: Create a comprehensive list of all bank accounts, investments, sources of income, assets, and debts. Ensure your Power of Attorney (POA) or executor knows which institutions hold these items and has access to account numbers and contact information.
• Simplify and consolidate: “Less is more.” If you have multiple bank accounts or RRSPs/RRIFs spread across several institutions, consider consolidating them. Closing inactive accounts now saves your executor hours of paperwork later.
• Write down your instructions: Don’t leave your family guessing. Create a “death manual” that provides clear instructions on your preferences for everything from funeral arrangements to the distribution of sentimental items.
• Have an updated Will: A Will is the cornerstone of your estate plan. While a Will validly signed in one province is generally recognized across Canada, provincial laws vary (especially regarding how marriage or divorce affects a Will). If you move provinces or own property in multiple jurisdictions, have your Will reviewed by a local professional.
• Establish Powers of Attorney (POAs): You need two types. A POA for Health allows someone to make medical decisions if you are incapacitated. A POA for Finances allows a representative to manage your bills and funeral costs.
  Note: A POA expires the moment a person passes away. At that point, the Executor named in the Will takes over legal authority.
• Stay tax-compliant: One of the most stressful tasks for an executor is “catching up” on years of unfiled taxes. Keep your filings current to ensure a smooth transition.

What to Do When They Pass

For the purposes of this article, we’re focusing on CRA and taxes.  Different provinces have different guidelines, so you can do a Google Search for “What to do when somebody dies in Ontario” or “What to do when somebody dies in BC” or whatever your province is to get the official government guidance.

Getting Started: Notifying the CRA

As the legal representative, you should notify the CRA of the date of death as soon as possible. You can do this by calling 1-800-959-8281, or by mail. You will need to provide:

1. A copy of the death certificate.
2. The deceased’s Social Insurance Number.
3. A copy of the Will (or court order) naming you as the legal representative.
   • If no Will exists: Use Form RC552 (Register as Representative for a Deceased Person) to apply for authorization to manage their tax affairs.
4. Notification to Service Canada: Call 1-800-622-6232 to cancel CPP/OAS benefits. If a payment is received in the month of death, it may be kept; payments received after that month must be returned.

Managing Benefit Payments

• GST/HST & Carbon Tax Credits: The deceased is no longer eligible for these after the date of death. If a payment is received after the death, return it to the CRA so they can determine if any portion belongs to the estate or a surviving spouse.
• Canada Child Benefit (CCB): This usually transfers to the surviving parent. If the deceased was the sole caregiver, the new caregiver must re-apply.
• Tax Installments: No further tax installments are required for periods after the date of death.

The Tax Filing Process

Filing for a deceased person is more complex than a standard return because you are dealing with “Deemed Disposition.”

1. The Final Return (T1)

In the eyes of the CRA, the deceased is “deemed” to have sold all their assets (stocks, secondary property, etc.) at fair market value immediately before death. This often triggers significant capital gains.

• Rollover Provision: Assets left to a surviving spouse or common-law partner can usually “roll over” at cost, deferring the tax until the spouse sells the asset or passes away.

2. Optional Returns 

You may be able to file up to three additional “optional” returns to report specific types of income. This allows you to claim full personal tax credits on each return, potentially saving the estate thousands of dollars:

• Return for Rights or Things: For income earned but not yet paid at the time of death (e.g., unpaid salary, declared but unpaid dividends).
• Return for a Partner or Proprietor: If the person had a business with a fiscal year different from the calendar year.
• Return for Income from a Testamentary Trust.

3. Trust Return (T3)

If the estate earns income (like interest or rental income) after the date of death but before the assets are distributed, you must file a T3 Trust Guide and Return.

Due Dates

Date of Death	Filing & Payment Deadline
Jan 1 to Oct 31	April 30 of the following year
Nov 1 to Dec 31	6 months after the date of death
Self-Employed	June 15 (Payment still follows the 6-month rule if death was late in the year)

Before you distribute any money to beneficiaries, you must apply for a Clearance Certificate (Form TX19). This document confirms that all taxes, interest, and penalties have been paid. If you distribute the money without this certificate and the CRA later finds taxes are owed, you (the executor) could be held personally liable for the debt.

Caring For Your Loved Ones

Someone dying is completely disruptive to the lives of their loved ones.  The best thing you can do to minimize their stress, from a tax and financial perspective, is to get your affairs in order. Communicate clearly with those who will handle your matters after passing, and keep up to date on your taxes to minimize the work they’ll have to do. 

When someone passes away, the tax return process can take quite some time.  In addition, it usually results in a much higher than normal tax burden, so paying installments or taxes owing on time is essential to the estate for the beneficiaries.

Dealing with death and dying is never a pleasant situation, so planning and communication are vital to easing the pain of your loved ones.