Police earlier arrested Lake for alleged impaired operation of a watercraft.
A police statement released at the time said he had passed a breath test but remained in custody pending further inquiries.
The owner of a local charter vessel, UberVida, told the Royal Gazette his crew responded to a call for help and found Mary Elizabeth McKee.
They carried out CPR, but she was unresponsive.
"Unfortunately, the result wasn't what we wanted. Everyone was pretty upset,'' he told the paper.
Bermuda Police said then the local man was driving a 5m centre console vessel from Front Street Ferry Terminal towards White's Island.
The boat collided with a 2.7m Zodiac inflatable carrying three people who were thrown overboard.
"The collision was witnessed by passengers of another small boat nearby and they were able to render immediate assistance," local police said. "The occupants of the Zodiac all received injuries.
"The Bermuda Police Service extends sincere condolences to the family and friends of the deceased."
As members of the McKee family organised flights to get to Arthur McKee's bedside, the father and sister of Australian yachtie and Oracle Team USA skipper Jimmy Spithill took it upon themselves to go and see Arthur McKee in hospital after hearing about the incident.
A New Zealand-based friend of the Spithill family, Aaron Torenson, told the Herald at the time:
"They just literally got into gear and went up [to the hospital] and started communicating with the family back in New Zealand.
"[They] bought him a cell phone, loaded all the family numbers into the phone for him, stayed with him, talked to the doctors, shared information with the family overseas.''
A family notice published shortly after the accident said she was mum to Elliott, Guy, Missy and Lucy and grandmother to Poppy and Grace.
"We are all shocked and struggling to come to terms with our devastating loss.''