Clearance Certificate when there is a Death in the Family

Posted in General, Personal Tax Canada

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

“As the legal representative, you may want to get a clearance certificate before you distribute any property under your control. A clearance certificate certifies that all amounts for which the deceased is liable to us have been paid, or that we have accepted security for the payment. If you do not get a clearance certificate, you can be liable for any amount the deceased owes. A clearance certificate covers all tax years to the date of death. It is not a clearance for any amounts a trust owes. If there is a trust, a separate clearance certificate is needed for the trust.”

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 .

Author: Kristopher McEvoy, CPA, CGA

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