Can You Pay Funeral Costs From a Deceased Person's Account in Ontario?

A funeral usually has to be arranged and paid for within days, long before any court document is issued. If you are a relative, you may be wondering whether you can use the deceased person's bank account, or whether you have to pay out of your own pocket.

This article explains who has authority over the money, how reimbursement generally works, and what other sources of funds may be available. Bank practices vary, so the first step is always to ask the institution directly.

Who can use the deceased person's money?

When a person dies in Ontario, their property passes to their personal representative, the estate trustee, who holds it for the people entitled to it after the debts are paid. The estate trustee is the only person with legal authority to manage or distribute the estate.

A Certificate of Appointment gives the estate trustee authority to manage the estate's assets and pay its debts. If the estate is valued at $150,000 or less, the estate trustee can instead apply to the Superior Court of Justice for a Small Estate Certificate, which gives authority to manage only the assets listed in it. Relatives who are not the estate trustee have no authority to withdraw money from the deceased's sole accounts.

Probate is usually needed where the deceased owned real property or had assets held by a financial institution, although it depends on the type of asset. How a particular bank handles a request for funeral money before a certificate is issued differs between institutions, so ask the bank what it requires rather than assuming.

Paying personally and getting repaid

If you cannot access the account in time, many families pay the funeral home themselves. Unless the will says otherwise, the deceased's debts and funeral and testamentary expenses are paid out of the residuary estate.

Reimbursement is not automatic. It depends on the estate having enough money and on the estate trustee being appointed. Funeral costs are one of several claims, so ask the estate trustee to confirm repayment in writing.

• Get an itemized invoice in the name of the estate or the person who arranged the funeral.
• Keep proof of every payment you make.
• Tell the estate trustee, in writing, that you paid and expect repayment.
• Do not take money from the deceased's sole account on your own.

Where else funeral money may come from

The CPP death benefit is a basic amount of $2,500 plus a possible $2,500 top-up, up to $5,000 in total, for deaths on or after January 1, 2025. The deceased must have contributed for at least one-third of the calendar years in their contributory period (minimum three years), or for 10 calendar years. The executor should apply within 60 days of the date of death.

If there is no estate, or the executor does not apply, the benefit may be paid in this order: to the person or institution paying the funeral expenses, the surviving spouse or common-law partner, or the next of kin. The top-up is not paid if the deceased had ever received a CPP or QPP disability benefit, post-retirement disability benefit or retirement pension, or if a surviving spouse or common-law partner is eligible for a survivor's pension.

Life insurance may also help. Where a beneficiary is designated, the insurance money is not part of the insured's estate and cannot be claimed by the insured's creditors from the time of death. However, for dependant support claims only, life insurance the deceased owned on their own life is treated as part of the net estate under the Succession Law Reform Act. If the estate itself is named as beneficiary, the proceeds are paid into the estate and the creditor protection does not apply.

Things to watch

• Funeral costs cannot be deducted from the estate's value when calculating Estate Administration Tax.
• CPP and OAS payments issued after the month of death must be returned, and any already cashed must be repaid.
• Any CRA payment received after the death should be returned to the tax centre.

Under Ontario's Trustee Act, if the estate does not have enough to pay all its debts, the debts are paid proportionately, with no debt ranking ahead of another, though secured creditors keep their security. A different rule applies if the deceased person is in bankruptcy. Under the federal Bankruptcy and Insolvency Act, reasonable funeral and testamentary expenses incurred by the legal representative are paid first, subject to the rights of secured creditors. Which rule applies depends on your situation, so it is worth confirming with a lawyer.

What to do next

• Find out who is named as estate trustee in the will, or who can apply to act if there is no will.
• Ask the bank what documents it needs, without assuming it will release funds.
• Check whether the deceased had life insurance with a named beneficiary.
• Apply for the CPP death benefit within 60 days of the death if you are the executor.
• Keep all funeral receipts and ask the estate trustee about repayment.

Frequently asked questions