Death and Taxes (Legal Information for Indigenous People)
To be valid, a will under the Indian Act must:
- Be in writing (*audio/video wills/oral instructions are not accepted)
- Be signed by the will-maker
- Give away something the will-maker owns
- Be intended to take effect upon death
- Have 2 adult witnesses (not beneficiaries or their spouses)
- Be dated
The person writing the will must be
- A “Status Indian” under the Indian Act
- considered “ordinarily resident on-reserve”
- 16 and older
- Free from pressure or influence
In addition to these requirements, it is important to include the following in your will:
- Name executor and alternate to manage your estate
- Who you want to care for your children
- Funeral directions
- Make gifts of specific assets (e.g., your house, boat, car, jewelry, art, television etc.)
- The residue/remainder (what is left over after payments of debts and gifts of your estate)
For step by step directions use the template in “Writing Your Own Will - A Guide for First Nations People Living on Reserve (Revised 2019).”
For questions contact Indigenous Services Canada, Estates Unit, 1.888.917.9977 or BCEstates@sac-isc.gc.ca
Indigenous people on reserve can leave their home to people who are members of their band or entitled to be, as long as the house is located on a Certificate of Possession lot (“CP”). A CMHC house cannot be given away in a will. Check with your Band’s housing department to find out what happens to a CMHC house or Custom allotment in the event you pass away.
The law for writing wills is the Provincial legislation Wills and Estates Succession Act (WESA).
For Legal Advice about Wills, call Access Pro Bono Justice to schedule a free 1/2 hour phone appointment with a lawyer 1-877-762-6664.
An Estate is all of the money and property (and debts) left after someone dies. Estates fall under federal jurisdiction with Indigenous Services Canada (ISC) when someone passes away who is “ordinarily resident” on reserve (meaning if they were living away from the reserve, it was only for school, medical etc.).
The person named in the Will as the Executor has the job of settling the affairs of the deceased: paying the bills, filing taxes, closing accounts, and generally following the wishes of the deceased in their will. If there is no will, then the family (and ISC) will appoint an Administrator. ISC will send the Administrator a certificate showing their appointment.
For a step by step description of what needs to be done see “Estate Administration On Reserve.” Available at aboriginal.legalaid.bc.ca or Contact ISC Estates offices T: 1.888.917.9977 or general email BCEstates@sac-isc.gc.ca.
Executors and family members are Not liable for the debts of the deceased. The Executor’s role will be to pay bills from money in the Estate before any beneficiaries are paid. If no money, then no bills get paid.
If your common law partner or spouse has passed and you are wondering how your home on reserve is effected, the Family Homes on Reserve and Matrimonial Interests or Rights Act will likely apply. If so, you:
- are entitled to remain in the home for 180 days, even if renting and even if not a Band member
- can apply under the Act for exclusive occupation of the home beyond the 180 days (depends on situation)
- may apply within 10 months of the death for a court order to determine entitlement
If you are entitled to this right or interest, note that you will not also be able to receive an amount under the will for the same property.
For information about estates Off Reserve see People’s Law School publications online at peopleslawschool.ca.
A Representation Agreement is a legal planning document under the BC Representation Agreement Act. A Representation Agreement is a way you, as an adult, can name people to help you make decisions or make decisions on your behalf if your mental capacity comes into question. Spouses or parents of adult children do not have automatic legal authority to speak for you or “act on your behalf.
- Note: What if you are ill, injured or have a disability? Your mental capability to understand may be questioned if you have a stroke or a bad fall or if you become seriously ill. An adult with a disability from birth or with advanced dementia may have problems to understand and may need help making decisions and managing their affairs.
- Note: You may need help with your finances – like paying bills or applying for benefits. You may need help with health care decisions like understanding the risks and benefits of surgery.
What legal document(s) are available in BC?
- In the past, BC only had a law for Enduring Power of Attorney (POA). An Enduring POA allows you to appoint someone to help you with financial and legal matters (including dealing with real property off reserve) but does not cover health care.
- Then, a new law was created, called the Representation Agreement Act. A Representation Agreement is a legal document in BC to name someone to help you with health care, personal care, financial and legal matters.
- A Representation Agreement under section 9 (RA9) covers the most health and personal care matters, up to and including decisions to refuse consent to life-supporting health care.
- A Representation Agreement under section 7 (R7) can include some or all of the following standard powers: minor and major health care, personal care, routine financial, and legal matters (but not dealing with off-reserve property).
The Representation Agreement Act introduced a new definition of mental capability for Representation Agreements made under section 7. This is for adults who may have problems with understanding and need help because of a disability from birth or advanced dementia or other condition. This makes BC a leader in accessibility and inclusiveness.
Contact nidus.ca with any questions or concerns or contact a legal advocate for direct help accessing more information at email@example.com.
Indigenous peoples are subject to the same tax rules as any other resident in Canada unless their income is eligible for the tax exemption under section 87 of the Indian Act.
If you have “Status,” then on reserve employment income is exempt from income tax under s81(1)(a) of the Income Tax Act and s 87 of the Indian Act. Some of the connecting factors used to determine whether income is situated on a reserve are:
- the location or residence of the employer,
- the nature, location and surrounding circumstances of the work performed, and
- the location or residence of the employee.
Any questions call Canada Revenue Agency 1-800-959-8281
If your employment income is exempt from tax, any income that stems from this employment income, such as Employment Insurance, Canada Pension retirement benefits, etc. is also exempt from income tax.
Note: the Guaranteed Income Supplement (GIS) does not include tax exempt income in the calculation of household income for eligibility purposes. GIS eligibility calculation is based on “taxable” income only. If your Old Age pensions get reduced, check to be sure your tax exempt income has not been used to calculate your GIS amount. Call a Legal Advocate for help.
For information about Business income earned on reserve, call Canada Revenue Agency to confirm 1-800-959-5525 and get legal advice.
Goods and Services Tax (GST)
Generally, people with Status do not pay GST on:
- property bought on a reserve
- property delivered to a reserve by a vendor
- services performed entirely on a reserve.
For information on when GST does and does not apply for you and whether you have been incorrectly charged GST, visit the "GST and "Indigenous Peoples" page on the government of Canada’s website.
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