After there is a death, it is recommended a clearance certificate be issued before you distribute property. If not, you may personally be liable for possible debts owed by the deceased.
It is an emotional time when a family member or close friend dies. After a death, there is the added challenge of managing the accounting paperwork that the legal representative, and those named in the will, must work through as they distribute the decease’s property, and possible debt, left behind.
Canada Revenue Agency states
Before you distribute property after a death it is recommended you get a Clearance Certificate
Notice the first sentence, “before you distribute any property under your control”. Depending on the family situation at hand, getting funds back from the other beneficiaries can be quite difficult in the event that the tax debts of the deceased taxpayer, or the trust of the estate (if one was formed), are higher than expected, and you as the executor become liable.
At McEvoy, Lelievre and Associates, we know it is a difficult time after a loved one passes away. If you are the legal representative, named in a will, or a family member to someone who has recently passed away, please notify our office and we can help answer any related accounting questions.
Information about what paperwork to file after a death
For more information about what paperwork you need to file when there is a death in the family, you can visit the link here for the Canada Revenue Agency .