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Estates & Wills & Trusts

The tax responsibilities of estate trustees

When someone passes away, their estate trustee becomes personally responsible for making sure that the deceased's taxes are paid - a responsibility which must be taken very seriously, Toronto estates and trusts lawyers Ian M. Hull and Suzana Popovic-Montag write on Huffington Post

“On an individual's death, a new taxpayer is created. The estate trustee is responsible for tax on income earned by the individual up to the date of death. The estate trustee is also responsible for the tax owing on income earned by that individual's estate -- a separate entity for tax purposes,” say Hull and Popovic-Montag, partners with Hull & Hull LLP.

Ian Hull Estates and Trusts Lawyer“All too often, an estate trustee will begin administering the deceased's assets, only to realize that the deceased had failed to properly file and pay taxes during the later years of his or her life. Fortunately, the CRA has a Voluntary Disclosures Program, which allows taxpayers, dead or alive, to disclose errors, inaccurate or incomplete disclosure, or unreported sources of income that may affect their taxes. If done properly, a taxpayer may avoid some of the penalties which may otherwise be imposed,” they add.

A recent episode of Hull & Hull TV, also featured on Huffington Post, discusses how estate trustees can deal with the minefield of income tax related to an estate, including the importance of tax clearance certificates.

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