Client passed away in the fall and I did last year’s taxes for her Grandson who was POA. He will also be acting as Executor.
Do I need a new Auth a Rep Form? What other pitfalls should I be aware of? No real property to dispose of, only personal assets etc. Which are in the will?
Thank you
Its a whole new engagement, from scratch.
Whole new ball game.
An executor is named and evidenced by a (probated) Will.
Evaluate all evidence carefully.
Get all instructions in writing, from proven authorized persons.
Your reference to a new AuthRep form suggests she may have been a client before passing? If so, any existing AuthRep authorization continues.
It doesn’t “continue”, as much as it is not “automatically cancelled” anymore.
This facility is ony a temporary convenience recently implemented by cra to ease information flow during a transition period.
However, it has no underlying legal basis
The accountant should get new engagement documentation executed before acting.
The accountant also needs copies of the relevant Willl, death certificate etc, as does cra.
She was a previous client, via POA on file.
Does Will need to be probated prior to a new Auth a Rep from Executor and final return?
Different views and suggestions,all good. I will be reviewing T4011
You do not have that client anymore.
Unfortunately and sadly, they are deceased, gone.
Like the “Norwegian Blue”, they are an ex-client.
(Dead Parrot sketch - Wikipedia)
(Dead Parrot Sketch (the original) - YouTube)
Any POA that you have on file for this ex-client has been cancelled on DOD.
For your acceptance of a new client, you should have all protocols in place as to verifying their identity (required), and hard evidence of any purported legal authorities they are asserting they may have.
It may be that you would want to work with relevant parties, such as estate lawyer, additional parties etc, that the verified (proven) executor may hire.
Are you going to be hired as estate accountant? Estate tax preparer? For Final T1s? For T3s? The executor would need to arrange all that.
Although in the real world, people (other than lawyers) sometimes take shortcuts, every shortcut carries problematic risks…
Not every Will gets probated, but that is the “gold standard”, being the evidence of the Court being satisfied as to the validity.
This is my first final return.
Fortunately it is the grandmother of my step children of which one was the POA and now Executor. Whether it is family or not I want to make sure they and I are doing things properly.
Thank you
AS @gcctax stated - if she was a client for whom you previously held authorization, that authorization “should” continue as far as CRA goes (they still sometimes cancel them). From a technical perspective, as @joe.justjoe1 points out, a POA terminates on death, and, while CRA extends the term of the previous authorization as a convenience to us, you need to be dealing with a person who has legal authority to act. That person would be the Executor. They may well be one and the same, but the distinction is nonetheless there - they are wearing different hats - first as POA, second as Executor.
You should obtain a revised Auth from the Executor once convinced that they have legal authority to act. At some point you will also need to file the Will and the Death Cert with CRA as well.
The laws of the province in which the deceased lived will determine whether Probate is required. In BC, for instance, if the deceased owned Real Property, had cash/investments > $30K (generally - varies) Probate is required. Sometimes the Bank requires it for smaller amounts, sometimes not. For Real Property it doesn’t matter - Probate is required. Cars - depends on the mood of ICBC at the time. So - check with your provincial authorities. If the deceased has a lawyer handling the Estate, they will provide guidance.
@SmallBizGuy Well said, without all the legalese that tends to confuse people. I would make one small change though - You MUST obtain a revised Auth, not should.
One of my clients has brought me his brother’s date of death return to do. There is no Will. Any way to get an Auth in that situation?
@gaymwise
In normal circumstances where this occurs, (no Will) he should apply to the court for a letter of administration to be administrator. The rules of intestacy apply.
At this stage, he has no authority at all (so he cannot give you any).
Perhaps start by asking him who paid the funeral home, etc.
In addition to what Just Joe said, there is a form to notify CRA when there’s no executor named RC552 Appointing a Representative for a Deceased Person - Canada.ca
Sometimes there’s nothing in the estate other than a bank account for “cashing” OAS/CPP + GST payments.
Just filed one of those for a client whose son passed away intestate. I filed the form via RAC upload with a note attached, and some time later filed the AuthRep (after being signed by the client). A couple of days later the son’s file popped up on RAC. You could probably do it in reverse order as well methinks…like normal, they’ll just ask you to submit the forms.
Thanks all, that’s a great help
Yes, you need a new authorization. The trustee or legal representative or other authorized person would sign the form on behalf of the deceased. The CRA may or may not rescind the authorization immediately perhaps depending on date of death.