Are YOU an Estate Trustee? Protect Yourself with these Tips!
Have you been designated as an Estate Trustee for someone you know? Are you aware of the liability of your role as Trustee? If not, here are some helpful tips to prepare for your important upcoming role.
TOP tips as an ESTATE TRUSTEE:
1) Create a Trust Account Number (TAN)
2) Make sure you receive a Clearance Certificate.
STEP 1 | Develop a Trust Account Number (TAN). A TAN number is required to put assets in your trust, and the TAN identifies your trust; similar to a legal entity for tax purposes. You can find below the three EASY steps to set up your TAN.
3 Easy Steps to Develop a Trust Account Number:
- Follow the link at the bottom of the article to receive your TAN which starts with T and is followed by an 8 digit number.
- You will then have to send a SIGNED copy of the trust document with (Link to bottom of page) – or your application will be denied.
- Once receiving your TAN – that number will be on all correspondent documents related to the trust.
If you are applying for a TAN for someone other than yourself, you will have to get a T1013 signed by an authorization of a legal representative. This form allows Canada Revenue Agency to deal with the elected representative for the individuals income tax matters including, trusts. If you are a Trustee you can easily apply for a Trust Account Number (TAN) before filing the T3 Trust Income Tax and Information Return.
Trustee responsibilities go beyond the legal representative of an estate – Clearance Certificates are just as important as understanding how to control an estate.
STEP 2 | A Clearance Certificate is the final document that states all taxes have been paid by the deceased and the estate. Which then allows the estate to be closed and all funds distributed to the beneficiaries. This becomes a very important step as a Trustee and will allow for future protection.
Clearance Certificate – acknowledges that all amounts of which the deceased taxpayer is liable to the CRA, have been paid.
If a clearance certificate is not obtained upon a taxpayer’s death, as a legal representative, you can be liable for any amount the deceased owes. It is important to understand the deceased tax obligations and not to disburse the deceased taxpayers estate until all filings are made. You will not be able to tax for a clearance certificate until all tax filings have been filed and a notice of assessments is received.
We understand that Estate Management and Trustee Roles can be complicated! We can help you navigate this complex process.
Chopek & Associate* helps small to medium sized businesses and individuals in Edmonton, Alberta, Canada.
Apply for TAN: https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t3app.html
T1013 for Legal Authorization: https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1013.html
Follow this link to request a certificate, complete form TX19: https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/tx19.html