Many Ontario residents are unclear about the laws relating to the debts of an individual who has passed away. Some worry about being pursued by debt collectors after a relative dies, and others are concerned that their inheritance will be eroded by a benefactor's credit card bills and other debts. While a last will and testament is an important estate planning document, it addresses the distribution of assets and not the payment of debts.
Residence of executor may have important tax consequences
Ontario residents may know that in appointing an executor to carry out the tasks set forth in a will, people automatically consider trustworthiness and reliability, but residency is another attribute that might also be considered important. The Canada Revenue Agency has stated in an interpretation bulletin that the residence of a trust depends on the residence of the trustee. The interpretation applies to decedents' estates as well.
Filing for a Certificate of Estate Trustee
When an Ontario resident passes away, his or her loved ones are often left with the task of paying his or her debts and distributing assets. One of the first steps in that process is applying for a Certificate of Estate Trustee with the Ministry of the Attorney General. The Certificate of Estate Trustee designates a certain person as the trustee responsible for settling the deceased person's affairs. Many people refer to the estate trustee as the executor.
Testamentary trusts
Individuals living in Ontario who are looking into planning their estate may wish to learn about the different types of trusts in existence. One type is a personal trust known as a testamentary trusty.
