What the cost of death?
You can’t get away from it – even dying isn’t going to be free! We’ve all heard about expensive funerals, lawyer’s fees, taxes. But what can your loved ones really expect to pay to send you safely on your way and what remains to pass on to them?
A funeral need not be expensive, but there are bound to be some costs. You may get away with a cardboard casket and quick cremation without ceremony, but there still is the need to get the body to the crematorium. That trip will cost as will the cremation itself. There are administrative matters carried out by a funeral home, such as preparation of vital statistics form and registration of death, proof of death certificate. Canada Pension Plan provides a $2,500 death benefit that can be used to offset funeral costs.
While we don’t have actual inheritance taxes in Ontario, we do have income tax consequences, and Estate Administration Tax. While a will may be fully valid, In most cases your executor will need to have it probated, that is apply to the court for a Certificate of Appointment of Estate Trustee with a Will. In addition to the cost of a lawyer to assist in the required documentation, on filing of the application, your estate will pay an Estate Administration tax on the value of your estate assets in the amount of $5 per thousand up to $50,000 and $15 per thousand thereafter.
If your estate assets include funds held in registered retirement pension plans or registered investment funds, unless the funds are being “rolled over” to a spouse (or disabled child, in some circumstances), the funds will be treated as income in the year of death. The funds are taxable as they are withdrawn, and are withdrawn entirely on you death.
So, just a few costs for you to raise with your accountant, lawyer and insurance broker when discussing your estate plan. You may be able to reduce the costs by planning, but not entirely. Be prepared.
Enjoy your day and come back soon.