The First Year of Estate Administration — Executor Priorities in Canada

By month four of estate administration, the funeral is a distant memory, the institutional notifications are complete, and the inventory is final. What lies ahead is the long middle stretch — the nine months that separate a clean death from a closed estate. Most Canadian executors discover that the first 90 days were the easy part, and that the real work is everything between probate and the clearance certificate.

A retired teacher in Mississauga dies with a $720,000 estate. By month three, her son has the probate certificate. By month seven, the house is sold and the brokerage accounts are liquidated. By month nine, the final T1 is filed. By month thirteen, the CRA clearance certificate arrives. By month fifteen, the residue is distributed and the estate closes. Roughly 200 hours of executor time, spread unevenly across 15 months. This guide is the roadmap for what happens between months 4 and 12. For the broader context, see our pillar on what an executor does in Canada and the first 90 days primer.

Months 4 to 6 — probate arrives, liquidation begins #

The probate certificate (called a Certificate of Appointment in Ontario, a Grant of Probate in British Columbia, similar names in other provinces) is what every institution wants to see before they release the deceased's assets to the executor. Once it is in hand, the pace of administration steps up.

Open the estate account if not already done #

If the executor delayed opening the estate bank account pending probate, now is the time. Take the probate certificate to the deceased's primary bank and open an account in the form "The Estate of [Deceased Name], by [Executor Name] as executor." All estate income from this point flows in; all expenses flow out.

Convert assets to the estate account #

Each financial institution needs the probate certificate plus their own forms to transfer assets. The standard sequence:

• Bank accounts. Close the deceased's individual accounts, transfer the balances to the estate account.
• Brokerage accounts. Either liquidate to cash and transfer, or move the holdings in kind to an estate brokerage account.
• RRIF / RRSP without a named beneficiary — these collapse and the value is included in the deceased's final T1 as income.
• TFSA — if no successor holder is named, the value at date of death rolls into the estate (post-death growth is taxable in the estate).
• Real estate — title is transferred to the estate via the provincial land registry, requiring the probate certificate, a transmission application, and any survey or title evidence the registry requires.

The pace of this work depends entirely on each institution. Some banks turn around an executor transfer in a week; others take six.

Decide what to sell and what to hold #

The will dictates what is bequeathed in kind versus what gets sold. For everything in the residue, the executor has discretion. Considerations:

• Real estate. Sell unless the will gives it to a specific beneficiary. A vacant home accumulates carrying costs (insurance, taxes, utilities, lawn care) that erode the residue, and post-death appreciation is taxable to the estate as a capital gain.
• Investments. Liquidate to cash before final distribution unless a beneficiary specifically asks for an in-kind transfer.
• Personal property. Distribute or sell per the distributing personal property framework.
• Business interests. Sell, transfer, or wind up per the will and the corporate governance documents. This often requires a separate professional engagement.

Months 6 to 9 — taxes #

Tax filing is the heart of the middle stretch of administration. There are typically three sets of returns to worry about.

The final T1 — the deceased's last personal return #

Covers January 1 of the year of death through the date of death. Reports income earned to date of death plus deemed dispositions (capital gains on appreciated property the deceased owned at death, principal residence exemption, etc.).^[3]

Filing deadline — April 30 of the year following death, or six months after the date of death, whichever is later. Payment of tax owing is due on the same date. Late filing draws a 5% penalty plus 1% per full month late, capped at 12 months.

A few optional separate returns can reduce the tax bill:

• Return for rights or things — for income that had been earned but not received as of the date of death (final pay cheque, accrued vacation, etc.). Filed separately, draws its own basic personal amount.
• Return for income from a testamentary trust — for beneficiaries of certain testamentary trusts in the year of death.
• Return for income of a partner or proprietor — for self-employed deceased.

Each separate return generally allows a duplicate basic personal amount and can reduce overall tax. An accountant familiar with terminal returns is generally worth the engagement.

The T3 estate return — the estate's first income tax return #

Once the deceased dies, the estate becomes a separate taxpayer for any income earned after the date of death. The T3 Trust Income Tax and Information Return is the form.^[4] See T3 trust returns and estate income tax in Canada for more on the mechanics.

For a graduated rate estate (GRE), the executor picks a fiscal year-end matched to the date of death. T3 is due within 90 days of that year-end.

Provincial estate tax filings #

Ontario requires an Estate Information Return within 180 days of the certificate of appointment being issued. Other provinces have similar follow-up filings with varying deadlines.

Months 9 to 12 — the clearance certificate #

The clearance certificate from the CRA is the executor's protection against the personal liability under section 159 of the Income Tax Act.^[1] Skipping it is the single most common executor mistake in Canada.

What it is #

A formal CRA letter stating that all tax returns up to a specified date have been filed and assessed, and no taxes are owing. With the certificate in hand, the executor can distribute the residue to beneficiaries without personal liability for unpaid taxes.

When to apply #

After all of the deceased's returns and the estate's T3 returns are filed and assessed. That is usually 6 to 9 months after the final T1 is filed.

How to apply #

Form TX19, accompanied by the deceased's notices of assessment, copies of the will and probate certificate, and a statement of estate assets and liabilities. The CRA process takes 4 to 8 months in most cases; complex files take longer.^[2]

Two-stage clearance #

Many executors apply for one clearance certificate covering the final T1, then a second clearance covering all T3 returns when the estate winds up. This lets the executor make a substantial interim distribution after the first clearance (typically 60% to 80% of the residue) while holding back a reserve for the second.

Communications cadence during months 4 to 12 #

A simple discipline that protects executors from beneficiary complaints — a written status update every 60 days. It does not need to be long. A page that covers:

• Current cash on hand in the estate account
• Major asset transactions since the last update (sales, transfers, settlements)
• Tax filing status
• Anticipated timeline to the next milestone

Many family disputes during estate administration are downstream of silence. Beneficiaries who hear nothing for six months default to suspicion. Beneficiaries who get a paragraph every two months default to patience.

Common mid-administration pitfalls #

A handful of mistakes show up repeatedly between months 4 and 12:

Commingling estate and personal money. Even briefly. Even with the best intentions. The estate account is sacred; the personal account is separate; there is no scenario where the executor "just borrowed" estate funds. Co-mingling is the single fastest way to be removed and to face personal liability.

Missing the Ontario estate information return deadline. 180 days from certificate of appointment. Late filing draws penalties up to 5% of the unpaid estate administration tax plus prosecution risk for serious cases.

Distributing before clearance. As above. The protection costs nothing and takes one form. Wait for it.

Failing to file T3 returns. "The estate only earned $4,000 of interest" is not a reason to skip the T3. A return is required if the estate has tax payable, makes a distribution to a beneficiary, or disposes of capital property.

Selling assets without supporting documentation. Every sale needs a paper trail — listing agreement, offer to purchase, closing statement, deposit confirmation. The final accounting will reference each transaction.

For the closing phase of administration, see closing an estate bank account and passing of accounts.

What we focus on at It's Simple Will #

The cleaner the will, the cleaner the first year. We focus on three structural things that compound through administration — a will that names a competent executor and a workable distribution scheme, beneficiary designations that route registered accounts cleanly outside the estate, and a Life Discovery Kit that gives the executor a map of where everything is. Build the documents at app.itssimplewill.ca, and pair them with the executor checklist for the operational sequence your executor will follow when the time comes.