As executor, you have the right to compensate yourself before distributing assets to the beneficiaries. This is usually discussed earlier in the estate settlement process, but it is crucial to make sure this is taken care of at this stage. Be sure to keep careful records of your compensation.In order to pay the executor fees, the estate must register with the CRA for a payroll account and file an Information Return (form T4) by the 28th of February in the year following payment.;
, This plan will be submitted to the CRA as part of the request for a clearance certificate. This statement must include:


A list of the assets.
A description of each asset.
Adjusted cost base.
The fair market value at the date of death and at the date of distribution, if not at the same time, of each asset.
The names, addresses, and social insurance numbers or account numbers of the recipient or recipients of each asset and his or her relationship to the deceased., Once the distribution plan is settled and debts have been paid, the estate's bank account may be closed. If the account earns interests, it may be advisable to move the money to non-interest earning account to avoid paying taxes on that interest., The deceased is still considered a legal entity for a time after death and must pay taxes. Tax returns must be prepared for any income earned between the death of the deceased and the issuance of a clearance certificate. This income could include interest earned on accounts, gains from investments, or any other inflows of money.Filing these taxes will require you to file a terminal income tax return (T1) with the CRA.Taxation is one of the most complicated aspects of estate law. Unless you are an accountant or an estate lawyer, it's best to seek professional help to avoid penalties from incorrect tax filings., The clearance certificate certifies that all money owed by the deceased to the government has been paid and relieves you, the executor, of legal liability for these debts. Be sure that all previous steps have been completed before filing for a clearance certificate.


The estate clearance certificate does not include clearance for any amount owed by a trust. You must file for a separate clearance certificate for any amount owed by a trust., In order to apply, you will need to complete a CRA form TX19, Asking for a Clearance Certificate, and send it to your tax services office. Form TX19 should not be attached to any other tax return, but filed separately. Attached to the TX19 form should be the following documents:


A copy of the will, including any codicils, renunciations, disclaimers, and all probate documents. If the taxpayer died intestate (died without making a will), also attach a copy of the document appointing an administrator.
A copy of the trust document for living trusts (trusts established while the creator of the trust is alive).
A statement showing the list of assets and distribution plan, as described above.
Any other documents that are necessary to prove that you are the legal representative.
A letter of authorization that you have signed or a completed Form T1013, Authorizing or Cancelling a Representative, if you want the CRA to communicate with any other person or firm, or you want the clearance certificate sent to any address other than your own., This can take from three to six months to be issued. The certificate clears income tax liability up until the pre-selected windup date (the date at which the assets are distributed).Try to maintain consistent contact with the beneficiaries, as they may become angry or frustrated during the long wait., Distributions can include transfer of cash or transfers of titles in the case of assets like vehicles or land.If the beneficiary is under the age of 18, the Public Guardian and Trustee (PGT) will have their legal guardian sign a release that allows their distribution to be held in trust by the PGT., In order to be able to legally prove distribution, and reduce your legal liability, you must obtain releases from each beneficiary to whom a distribution is made. The estate is not considered distributed until a release is received from each and every beneficiary.
Pay executor fees.
Write a statement showing the list of assets and a distribution plan.
Close the estate's bank account.
Settle tax obligations.
Prepare to apply for a clearance certificate.
Apply for a clearance certificate.
Wait to receive the clearance certificate.
Distribute assets to beneficiaries.
Request signed releases from each beneficiary.
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