Legal

In Canada, the estate is everything the person owned and owed. Generally, the estate must be gathered, valued, and used to pay final bills, debts, and any taxes due before what remains is distributed to beneficiaries.

An executor (named in the will) or an administrator (appointed when there is no will) manages this process. Depending on the assets and the province, you may need a court document (often called probate or an estate grant) before banks, land titles, and investment providers will release or transfer assets.

Canada does not have a blanket “inheritance tax,” but the estate can still owe taxes, especially because Canada often treats assets as being disposed of at fair market value at death (“deemed disposition”), which can trigger capital gains tax.

• Real estate needs to be transferred and the land title office or lender requires a grant.
• Financial institutions require a grant to release assets above their internal thresholds.
• There are multiple beneficiaries and the institution wants court-confirmed authority.
• Assets are held solely in the deceased person’s name with no beneficiary designation.

Probate isn’t always required. Many estates still benefit from legal guidance because rules differ by province/territory and asset type.

1. Locate the will and any codicils (updates). If there’s no will, you’ll follow intestacy rules (see below).
2. Make a list of assets, debts, and recurring payments.
3. Get date-of-death values for major assets (this matters for tax and estate accounting).
4. Ask banks/investment firms what they require: some will release smaller balances without probate.
5. If required, apply for the appropriate estate grant in the relevant province/territory.

Debts are typically paid from estate funds, not personally by family members. Someone may be personally responsible only if they were legally tied to the debt (for example, a joint borrower or guarantor).

If the estate cannot cover all debts, it must be administered carefully. Paying beneficiaries too early can create liability risks for the executor/ administrator. In this situation, professional advice is often worth it.

• Funeral expenses (rules and priority can vary)
• Immediate property-related costs (insurance, utilities, security)
• Required government filings and court fees where applicable

Canada generally does not charge an “inheritance tax” simply for receiving an inheritance. However, the estate may owe tax on income earned up to the date of death and on certain asset changes triggered at death.

• The legal representative typically files a final T1 Income Tax and Benefit Return (often called the “Final Return”) for the person who died.
• If the estate continues and earns income (interest, dividends, rent), a T3 Trust Return may be required for the estate.
• Many executors request a CRA Clearance Certificate before distributing the estate to reduce the risk of personal liability for unpaid taxes.

Canada often treats certain assets as if they were sold at fair market value immediately before death (“deemed disposition”). This can create capital gains tax inside the estate. Common examples include non-registered investments and secondary properties (rules and exemptions vary).

• Prior-year tax returns and CRA correspondence
• T-slips (T4, T5, T3, RRSP/RRIF slips, etc.)
• Investment statements and adjusted cost base records
• Property records (purchase price, improvements, appraisals if needed)
• Business financials (if applicable)

Assets held jointly may pass outside the estate (depending on how they are held, the relationship, and provincial rules). That can reduce what needs probate, but it can also create disputes—especially in blended families.

Some assets can pass directly to a named beneficiary (for example, certain life insurance policies and some registered accounts). These may avoid probate, but tax can still arise depending on the asset type and situation.

Tip: Ask each provider what happens on death for that specific account/policy and what documents they require.

If someone dies without a valid will, distribution is handled under the intestacy laws of the province/territory where they lived (and sometimes where property is located). Who inherits and in what shares depends on the family situation.

• Common-law relationships (rights can differ by province/territory)
• Blended families (children from previous relationships)
• Minors as beneficiaries (guardianship/trust requirements)
• Property in multiple provinces/territories

• Validity issues (signing/witnessing rules, later documents)
• Capacity concerns (whether the person understood the will)
• Undue influence / pressure
• Executor conduct (delays, lack of transparency, conflicts)
• Dependant support claims (in some provinces, eligible dependants can claim reasonable provision)

If you suspect a dispute, it’s often important to get advice early—before assets are distributed and the situation becomes harder to unwind.

• The estate is small and straightforward
• There’s one or very few cooperative beneficiaries
• Assets are simple and located in one province
• No disputes and no complex tax/property issues

• Real estate, businesses, or cross-border assets are involved
• The will is unclear or there is no will
• There are disputes or strained family dynamics
• The estate may be insolvent
• Significant tax issues are likely (capital gains, multiple returns)