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Debts & Liabilities of the Estate

The Executor or Administrator is responsible for distributing the estate to the people legally entitled to all or part of the estate.

This means distributing the estate according to the Will, or The Intestate Succession Act, 2019 if there is no Will. However, before doing this any liabilities or debts of the estate must be dealt with. An Executor or Administrator who does not do this can be personally responsible for amounts that were improperly transferred out of the estate. It is important to understand what needs to be done before any distribution takes place.

Waiting Period for Dependant or Spousal Claims

A dependant spouse or child can apply for a share of an estate for their support. The court can review the Will and, if necessary, redistribute the estate to properly provide for dependants. As well a spouse can apply to have family property divided before their spouse’s estate is dealt with. If the Court divides family property, the estate will only include the deceased person's share of the property after the family property division.

Because these claims could result in fewer assets being available for distribution Executors and Administrators must wait six months after Letters Probate or Letters of Administration are issued to distribute the estate. This allows dependants and spouses to apply for relief. If an Executor or Administrator ignores this time period and distributes the estate earlier, they may be personally liable to dependants or spouses. Executors and Administrators may obtain written permission from dependants and spouses who consent to an earlier distribution. Executors and Administrators may want to obtain legal advice on all matters pertaining to possible claims under these laws.

The Public Guardian and Trustee

Where children under the age of 18 years have an interest or claim in an estate, the Public Guardian and Trustee becomes involved. The Public Guardian and Trustee ensures that a child's property interests are protected. Because the Public Guardian and Trustee monitors the actions of Executors and Administrators where children or dependant adults are concerned, it may be necessary to obtain consent from the Public Guardian and Trustee before dealing with an estate. For example, if a child is left a house or some land, the Public Guardian and Trustee must consent on behalf of the child before the Executor or Administrator can sell the house or land.

The Public Guardian and Trustee can be appointed as the property guardian for a child under 18 who is a beneficiary of an estate if there is no one else to do so. The Public Guardian and Trustee may also act as a property guardian for a dependant adult if there is no one else to take on the responsibility.


In Saskatchewan, children under 18 do not have the legal capacity to manage their own financial affairs. Children under the age of 18 do not receive their share of the estate outright until reaching the age of 18, at the earliest, or later if the Will indicates. When a child under 18
is a beneficiary under a Will, the Executor may be authorized to manage the child's share of the estate until the child turns 18 or older. The Will may direct the Executor to pay any expenses required to properly care for and maintain the child. An accounting of the estate and
investments on behalf of the child must be provided to the Public Guardian and Trustee once a year.

When there are no minors or dependent adults interested in the estate, the application for Letters Probate or Letters of Administration must state this. Upon request and payment of a fee, the Court can then issue a certificate that no one under the age of eighteen is interested in the estate.

Canada Revenue Agency (CRA)

One of the duties of the Executor or Administrator is to pay any debts of the deceased or the estate. This includes paying taxes. When a person passes away they are deemed to have sold all the property in their estate and received the proceeds. Generally any increase in value of the property since it was acquired results in capital gains. Half of the total capital gains are income to the estate that tax must be paid on. In the case of an RRSP, because no tax was paid on the money put into the RRSP, the whole amount of the RRSP is counted as income to the estate. The only exception is if the deceased's spouse or a dependant is named as the beneficiary of the RRSP.

Once an Administrator or Executor has filed all the necessary tax returns, paid any amounts owing and received all related Notices of Assessment, a Clearance Certificate may be requested. A Clearance Certificate indicates that the deceased person has no outstanding tax liabilities with the CRA. Administrators and Executors who distribute estates before getting this type of clearance can be personally liable if there are any outstanding tax liabilities.

Creditors

Executors and Administrators are responsible for paying all just debts of the estate before distributing the estate to the beneficiaries. As an Executor or Administrator you may not be aware of all the debts owed by the deceased or the estate. You can protect yourself from future claims by creditors you did not know about by advertising for creditors before you distribute the estate. This way you can pay any legal debts while there is still money in the estate to pay the debts and will not be responsible for debts you did not know about.

To protect yourself against creditor claims you need to advertise in the newspaper nearest where the deceased lived, once a week for two consecutive weeks. The advertisement must be in the form set out in the King's Bench Forms. The advertisement must include a date by which any creditor has to notify you, the Executor, of a claim. If you do not receive any notices from creditors and the date has passed (and the time for spouses and dependants to make a claim has also passed), you can go ahead and distribute the estate and you cannot be held personally responsible for distributing the estate.

Bankrupt Beneficiaries

If a beneficiary is in bankruptcy, their share of the estate must go their trustee in bankruptcy. Before distributing the estate, it is important for Executors to take steps to protect themselves and avoid improper pay-outs.

Insolvent Estates

Sometimes there are not sufficient assets in the estate to pay all the debts of the estate. In these instances The Administration of Estates Act sets out the priority for payment of debts. Reasonable funeral and administration expenses of the estate are paid before any other debts. The Executor or Administrator is not personally liable for debts of the estate when administered properly, nor are any beneficiaries under a Will. It is, however, important that Executors and Administrators follow the legal scheme for distribution to avoid becoming personally liable for some debts.

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