Direct Deposits, Pre-Authorized Debits, and Auto-Pay After a Canadian Death

A 71-year-old Alberta woman dies. Six weeks later, her son (acting as executor) gets a call from a debt collection agency about an unpaid gym membership. He had not known about the gym. The pre-authorized debit had been bouncing for weeks against the frozen bank account, the gym's billing system had escalated automatically, and the deceased's name was now in a collection file. This is one of the most common post-death surprises Canadian executors encounter — and it is entirely avoidable with a structured audit of recurring transactions in the first 30 days.

The problem in one sentence #

Auto-payments do not stop just because the account holder has died. Every recurring transaction needs to be individually identified and shut down, and some of them need to be redirected to continue payment from estate funds.

Two categories — incoming and outgoing #

Incoming direct deposits include:

• Government benefits (CPP, OAS, GIS, provincial benefits, GST/HST credit)
• Pension payments (employer pensions, RRIF income, annuity payments)
• Salary if still employed
• Investment income (dividends, interest)
• Rental income

Some incoming deposits are owed to the estate (final pension payments for periods before death, accrued investment income); others must be returned (CPP and OAS for months after death).

Outgoing pre-authorized debits and recurring charges include:

• Mortgage and rent
• Utilities (gas, electricity, water, internet, mobile, cable)
• Insurance premiums (life, home, auto, health)
• Subscriptions (streaming, software, magazines, gym, etc.)
• Charitable monthly donations
• Loan payments
• Property tax (if paid monthly)
• Strata or condo fees

Step 1 — Audit the past 12 months #

Pull the most recent 12 months of statements from:

• The primary chequing account
• Any secondary chequing accounts
• All credit cards

Look for every recurring transaction (monthly, quarterly, annually). Use a spreadsheet to track them. A typical Canadian household has between 20 and 40 recurring transactions across all accounts.

The 12-month window matters because annual subscriptions (insurance renewals, annual software subscriptions, professional memberships) only appear once per year.

Step 2 — Classify each recurring transaction #

For each transaction, decide:

Stop immediately. Subscriptions the deceased no longer needs (Netflix, Spotify, gym, magazines). Charitable donations to be discontinued. Auto-renewal of expired services.

Keep paying from the estate. Insurance on estate property. Utilities on a home being kept or sold. Mortgage payments. Property tax. Anything that maintains the value of estate assets.

Redirect to a different payer. Mobile phone if a family member wants to keep the number. Home internet if the family is now living in the home. Insurance on a vehicle being inherited.

Refund required. CPP, OAS, and similar government benefits for periods after death.

Step 3 — Cancel directly with each merchant #

For payments to be stopped: contact each merchant directly. The bank cannot cancel a merchant's billing on the merchant's behalf — it can only block the card or account, which causes the charges to bounce.

Cancelling directly:

• Stops further billing cleanly
• Prevents the merchant from sending the deceased to collections
• Allows you to retrieve any prepaid amounts (often prorated)
• Closes loyalty program accounts if relevant

Many merchants have specific bereavement protocols and may waive cancellation fees, refund prepaid amounts, or provide condolence outreach.

Step 4 — Set up the estate account for continuing payments #

The estate bank account (typically opened once probate is granted, though some institutions allow earlier opening) becomes the source of funds for ongoing obligations. The executor transfers necessary recurring payments to bill against the estate account.

This is usually done one payment at a time, by contacting the relevant biller (utility, insurance company, etc.) and providing the estate account details.

Step 5 — Document everything #

For each recurring transaction, document:

• The merchant or recipient
• The amount and frequency
• The decision (stop, continue, redirect)
• The date of action
• The confirmation reference number

This documentation goes into the estate file and is important for the eventual passing of accounts (when the executor formally accounts to beneficiaries or the court).

Common pitfalls #

Forgetting annual renewals. Insurance, professional memberships, and annual subscriptions only bill once a year. Without a 12-month statement audit, they get missed.

Cancelling insurance too quickly. Home insurance on an unsold property must continue. Auto insurance on a vehicle still in use must continue. Cancellation can void coverage.

Missing pension payments owed to the estate. Some pensions pay an "until end of month" final payment that belongs to the estate; some pay a survivor benefit. Each plan has its own rules — contact the pension administrator.

Not returning CPP/OAS overpayments promptly. Service Canada will eventually identify and recover overpayments, but the process is smoother if the estate proactively notifies and returns them.

Forgetting Apple, Google, and other digital platform charges. App store subscriptions, cloud storage, in-app purchases — these can be hard to find on statements because the merchant is just "Apple" or "Google" with many sub-products.

What we focus on at It's Simple Will #

The Life Discovery Kit has a dedicated section for recurring transactions — every subscription, donation, and pre-authorized payment, with merchant contact information. Without this documentation, the executor is reverse-engineering the deceased's financial life from statements. With it, the audit takes hours instead of weeks.

See our companion guides: handling a loved one's finances after death, how to notify banks of a death, and government benefits after death.