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Assignee Death Overseas: Planning for an Unfortunate Possibility

CompassGUIDES - October 2006

By Diana Matwichuk, Assignment Planning Specialist

By the end of this year, it is projected that approximately 1000 Canadians will have died in foreign countries during 2006. Foreign Affairs and International Trade Canada maintains these grim statistics, which point to the very real possibility that an assignee could die while living and working overseas.

An assignee’s death would be a very wrenching experience for not only the family, but the corporation as well. Warranted or not, grieving families, isolated from their established Canadian support network, might partially blame the corporation for any part the assignment location might have played in the circumstances leading to the assignee’s ill health, foreign living conditions or environmental factors leading to death. Additionally, the sudden loss of expertise on assignment could occur at a critical stage in the international project.

Families of a deceased assignee will have to contend with a litany of details. Distance from home, unfamiliarity with the language, and differences in culture would compound the situation.

Much can be done in terms of assignment planning to alleviate the stress that these families will be dealing with, if such an unfortunate turn of events were to take place.

The following support measures could be included in international assignment policy:

1. 0 Liaison with Foreign Officials and Canadian Embassy

The most immediate concern of the family of the deceased is to deal with officials in the host country, follow appropriate protocol and obtain a death certificate. Canadian consulates are trained and efficient in these matters, but the option of assigning a company representative, in the absence of a designated family member, to liaise with these parties and obtain information would likely be well-received by a grieving family. It should be noted that some foreign countries do not even have funeral homes, and the corporate representative “buddy’ in the host country could assist in dealing with this type of cultural difference, as well as language barriers.

2.0 Travel Arrangements

Airline flights will likely have to be arranged to allow the family to return to Canada for a funeral and tie up various personal matters of the deceased. The corporation can include in its assignment policy provisions to arrange and pay for this return air travel.

3.0 Financial Support

Numerous unexpected expenses face families of the deceased, and a financial advance from the corporation to tide the family over until insurance money is received would likely be appreciated.

4.0 Grief Counseling

If counseling is not already offered as part of general assignment benefits, it might be helpful to arrange for family member grief counseling specifically in the event of assignee death.

5.0 Legal Advice

Legal counsel beyond the scope of usual estate probating may be required as a direct result of a death having occurred on assignment. For this reason, providing legal advice on matters specific to the host country is a responsible and welcome gesture to the grieving family.

6.0 Tax Advice

The Canada Revenue Agency (“CRA”) requires that a number of tasks be completed upon the death of an assignee. These include the filing of a final return; the possibility of obtaining a clearance certificate prior to property distribution; settling of GST/HST credit payments; sorting out the new recipient of Child Tax benefit payments; and dealing with the tax treatment of capital property that the deceased owned at the time of death. It is recommended that families of the deceased obtain advice from a tax services provider, to prevent double taxation of distributions from the trust, to properly treat capital gains and losses of the estate, and to ensure the proper flow-through of taxable capital gains to beneficiaries.

7.0 Designate at the Canadian Head Office

Especially with a large corporation, the family of the deceased might be overwhelmed with the navigation through departments in order to obtain answers to questions. A designated individual at head office could alleviate the family’s stress in this regard.

Summary

Death on assignment is not something anyone wants to think about, and on the contrary, the general mood surrounding an assignment is usually one of anticipation and excitement. However, assignee death should be considered to be a factor in the disaster recovery aspect of assignment planning. Families who have lost an assignee relative need to obtain answers quickly and easily. The existence of assignment documentation, preferably online, will quickly direct families to the key corporate contact, who will set all of the above provisions in motion.

The author wishes to thank Peter Simpson, CA, for his contribution to this article .

 


Tel: (403) 531-2200 
Fax: (403) 263-1826


Web: www.compasstax.ca
Suite 600, 1333 8th Street SW
Calgary, Alberta Canada  T2R 1M6


Tel: (403) 531-2200 
Fax: (403) 263-1826


Web: www.compassguides.ca
Suite 600, 1333 8th Street SW
Calgary, Alberta Canada  T2R 1M6