Two months after my son turned 18, he passed away. This was in August, 2023. We are frozen in sadness. We have not filed his final tax returns or closed his registered disability savings plan. The family registered education savings plan will be used by his younger brother, who is now 17. What do we do next? Contact the Canada Revenue Agency? The bank? What do we do now?

We asked Julia Chung, chief executive, financial planner and family enterprise adviser at Spring Planning, to answer this one.

While we could get into the intricacies of what you should do next, this is a catastrophic loss for a family. Know that you are not alone.

Although your intentions are in the right place, said Ms. Chung, taking this task on by yourself may not be manageable for your family.

“The first thing we need to address is the feeling of being frozen,” she said. “That’s your body and your mind experiencing overwhelm – which is absolutely reasonable considering what you have been going through.”

It is essential that you seek support from professionals in a situation like this. “Even if you’re potentially capable of doing all the tasks, you haven’t been able to, and help is important to get you through the next stages,” Ms. Chung advised.

Start, she said, by building a team to take on what needs to be addressed. Here are the key players to consider recruiting:

  • A grief counsellor
  • A financial planner who has experience working with tax, estates and RDSPs
  • An accountant who can file the outstanding income taxes

If you’re not sure how to find these professionals, Ms. Chung said you can start by contacting a member of the Financial Planning Association of Canada. That planner can then connect you to the expertise and support you need.

An RDSP, or registered disability savings plan, is a registered account available to individuals who qualify for the disability tax credit. The account is structured such that non-deductible contributions (up to a lifetime maximum) are matched with grants and bonds from the government based on household income, said Ms. Chung. “Investment income earned in the account is tax-deferred until withdrawal.” More information on RDSPs can be found on the CRA and RDSP Plan Institute websites, she added.

“There isn’t a lot to be done with the RDSP on death of a beneficiary, unfortunately,” said Ms. Chung. The RDSP must be closed and all amounts remaining in the plan – after any required payment of government grants and bonds – must be paid out to the beneficiary’s estate by Dec. 31 of the year after the calendar year in which the individual dies, she explained.

‘How do I encourage my heirs to take more interest in investing their inheritance after I’m gone?’

If a disability assistance payment, which includes any payment from an RDSP to the beneficiary or to their estate after their death, has been made, the taxable portion of the DAP must be included in the income of the beneficiary’s estate in the tax year that the payment was made.

If the child didn’t have any other assets – and as mentioned, the RESP will be used by their sibling – the RDSP is mostly administrative, Ms. Chung said. She suggested that the family may want to consider using any estate value as a way to honour their child.

“Perhaps a donation to their favourite charity, or starting a donor-advised fund that the family could contribute to in his honour could be a way of connecting and continuing his memory,” she said. “Or a park bench at his favourite location.”

The gesture itself doesn’t have to be big or enduring, she said. “Sometimes a family activity that isn’t too strenuous can help the family move forward in a meaningful way.”

Do you want advice on a financial planning or retirement issue that’s affecting you? Send us an e-mail.