Inheritance Tracing: Finding Out If You Are Owed Money in Ontario

Maybe a distant relative died and you have heard whispers that you were mentioned. Maybe a letter arrived out of the blue saying you may be owed money. Or perhaps you simply lost touch with family and wonder whether something was left for you.

There are legitimate ways to check, and there are people who will try to profit from your curiosity. This article explains where to look in Ontario, what to ask, and how to stay clear of scams.

Start with what you can find out yourself

Begin with family. Ask relatives whether the person died, who is handling the estate, and whether a will exists. The person named as estate trustee is the one who collects assets, pays taxes and debts, and distributes the rest to those entitled. If you are entitled, that person is the right contact.

If the estate went through probate, a Certificate of Appointment of Estate Trustee was normally needed where the deceased owned real property or assets held by a financial institution. A lawyer can help you find out whether an application was made and who the trustee is.

Money that may be sitting unclaimed

If certain bank products go unused for 10 years, the balance is treated as unclaimed and transferred to the Bank of Canada, after written notices at 2, 5 and 9 years. Balances under $1,000 are held for 30 years and balances of $1,000 or more for 100 years. You can search the Bank of Canada's Unclaimed Properties Office website yourself.

That search covers bank balances. Other assets, such as insurance and registered plans, work differently, as the next section explains.

Not every asset goes through the will

Some assets pass directly to a named person. When a life insurance beneficiary is designated, the insurance money does not form part of the insured's estate. A designation in favour of the insured's heirs, next of kin or estate is treated as a designation of the personal representative, so that money goes through the estate.

Participants in plans such as RRSPs and pensions can also designate a person to receive the benefit payable on death. Estate value for Estate Administration Tax excludes assets with a beneficiary designation, jointly owned assets that pass automatically to the other owner, and registered plans with a beneficiary designation.

• If you were named on an insurance policy, the insurer must pay the person entitled within thirty days of receiving sufficient evidence of the claim.
• If an insurer admits liability but the person entitled cannot be found, there are adverse claimants, or no one can give a valid discharge, the insurer may apply to court after thirty days to pay the money into court.
• Under an Ontario-registered pension plan, if a member dies before the pension starts, the spouse is entitled to the pre-retirement death benefit ahead of any designated beneficiary. A spouse who was living separate and apart from the member on the date of death has no entitlement, and a spouse may waive the benefit by delivering a written waiver in the approved form to the plan administrator.

Spotting heir-hunter and inheritance scams

Ontario's official scam guidance warns people to beware of upfront fees, and being asked to pay a fee to 'release' an inheritance is a warning sign of fraud. Some firms that contact people about inheritances are legitimate and some are not, so treat every approach with caution.

• Never pay money or share banking details to receive an inheritance.
• Be cautious of urgency, secrecy or pressure to sign quickly.
• Ask for the deceased's full name, date of death and the name of the estate trustee, then check independently.
• Do not sign a contract giving away a share of your inheritance without having it reviewed.
• Talk to a lawyer before you agree to anything.

If you do receive something: what to do next

The CRA lists most gifts and inheritances as amounts that are not reported or taxed for the person who receives them, and most amounts received from a life insurance policy following someone's death are also not taxed, although income earned on those amounts is taxable. Registered plans can be different, since the deceased's final return may carry tax on them.

If you receive ODSP, you must report inheritances you receive or expect to receive. Each person in the benefit unit can receive up to $10,000 in a 12-month period from gifts, voluntary payments, trust and life insurance payouts and inheritances; amounts above that generally count as income in the month received. Speak to a lawyer before accepting a large sum, because a trust may protect eligibility.

• Confirm who the estate trustee is and ask in writing whether you are a beneficiary.
• Search the Bank of Canada's Unclaimed Properties Office website.
• Keep scam warning signs in mind.
• If you receive benefits, report any expected inheritance and get advice first.

Frequently asked questions