Once all assets have been collected, debts have been paid and tax obligations settled or adequately reserved for, the executor can proceed to the estate administration process: distributing the remaining assets to the beneficiaries in accordance with the terms of the will, or, where there is no will, under the provincial intestacy laws. But before cutting any cheques or transferring property, several safeguards should be in place.
Probate and Waiting Periods
Executor must ensure the official Grant of Probate was obtained and mandatory waiting periods under provincial law have passed. In British Columbia under the Wills, Estates and Succession Act (“WESA”), beneficiaries (including potential claimants under the Wills Variation Act) have 210 days from the grant of probate to challenge the will. During that period, no final distribution should be made without consent from all interested parties or a court order. The Executor must:
- Wait the required period; or
- Obtain written consents from potential claimants; or
- Seek a court order permitting early distribution.
Clearance Certificate
Ideally, the CRA Clearance Certificate has been received. If not, the executor must ensure that all tax obligations have been accounted for and that a reasonable reserve is being held back to cover any potential liabilities.
Estate Accounting
Prepare a full estate accounting up to the point of distribution:
- An inventory of original estate assets;
- Proceeds from asset sales;
- Income earned during administration (e.g., rent, interest);
- Payments made (disbursements as funeral costs, debts, taxes, legal fees);
- A calculation of the net estate available for distribution;
- Proposed Distribution Schedule.
Depending on the estate, these accounts may be informally shared with beneficiaries or formally passed through court if required or requested. Even if not required by law, providing a clear summary to beneficiaries can prevent misunderstandings and promote transparency.
Beneficiaries’ Entitlement
The executor is to refer to the will (or intestacy law) to determine what each beneficiary is entitled to. Specific bequests (“$10,000 to my niece” or “my car to my son”) must be satisfied first. Residue (what remains after debts, taxes, expenses, and specific gifts) is divided per the will. If there is no will, under the intestacy rules. Special considerations:
- If a beneficiary predeceased the testator and the will doesn’t specify what happens, provincial anti-lapse rules may apply. For example, in British Columbia (WESA): Gifts to a child or sibling who dies before the testator usually pass to that person’s children, unless the will says otherwise and depending on the relationship and will language;
- If a beneficiary disclaims their gift, it is generally treated as if they predeceased;
- Minors’ shares must usually be held in trust – either under the will or paid into court or to a trustee as prescribed by law;
- If a beneficiary is incapacitated, executor must ensure that any trust or protective structure (e.g., a Henson trust) is properly established and administered;
- If the will says, “divide equally among my three children A, B, and C,” each child is entitled to one-third of the net residue;
- If the will gives percentage shares that do not total exactly 100% (due to rounding), you must normalize the shares proportionally;
- If the residue is to fund a trust (e.g., “I leave the residue in trust for my spouse for life, remainder to my children”), those funds must be transferred into the trust structure, not paid out directly.
Form of Distribution
The distributions may be made in cash, in-kind or a combination of both. Cash distributions are straightforward where assets have been liquidated. Funds can be sent via cheque or bank transfer. In-kind distributions occur when assets themselves are transferred, such as specific gifts (e.g., “house to my daughter”) or when beneficiaries agree to divide physical items or property. When there is Combination of both the executor shall ensure assets are fairly valued and shares are equalized. Independent appraisals may be appropriate.
Distributions
Before the final distribution, interim distributions may be made if the executor is waiting on final clearance or resolving lingering matters. Interim payments can distribute 80–90% of each beneficiary’s entitlement. Hold back can be 5-10% for taxes, final legal fees, or unexpected costs. Once clearance and final expenses are confirmed, distribute the balance as final distribution.
Releases
It is good practice to have beneficiaries sign a release before or at the time of distribution. A release typically confirms that the beneficiary has received their share, they approve the executor’s accounts (if shared) and they release the executor from further liability. If a beneficiary refuses to sign a release or approve the accounting, the executor may initiate a formal Passing of Accounts through the court. This is a legal process where the court reviews the accounts and formally discharges the executor. It can be time-consuming and expensive, so it is usually a last resort. If the beneficiary is a minor or legally incapacitated, approval may have to be obtained from the court or the Public Guardian and Trustee.
Distribution Logistics
To ensure transparency and avoid misunderstandings, it is best practice to propose the distribution in writing to all residuary beneficiaries. The proposal should include:
- A summary of the net residue available for distribution;
- The calculation of each beneficiary’s entitlement;
- A description of the proposed distribution (cash and/or in-kind);
- A request for the beneficiary’s written approval and signed release.
Example: “The net estate available for distribution is $600,000. Under the will, each of you is entitled to one-third, or $200,000. I propose the following distributions: [list of assets, their value and a type of distribution]. Please confirm your agreement and sign the attached release.”
Cash Legacies (General or Specific): If the will states, for example, “$5,000 to my nephew Alan,” this is a specific cash legacy. Set aside the stated amount for the beneficiary and confirm that payment will not compromise your ability to cover taxes, debts, or other higher-priority obligations. The executor should always obtain a receipt, confirming the beneficiary has received their gift.
Specific Items (Personal Property): Before distributing the estate residue, the executor must fulfill any specific bequests made in the will. These include both monetary legacies and named items of property. For specific bequests of personal items (e.g., “my diamond ring to my daughter Emily”) the executor must:
- Locate the item and confirm it matches the will’s description;
- Identify the correct recipient;
- Arrange delivery or pickup, ensuring the beneficiary signs a detailed receipt, such as: “Received one diamond solitaire ring from the Estate of [Name], as per bequest in the Last Will.”;
- Secure and insure such items appropriately until distributed;
- If the item is missing (Ademption): If the specific item no longer exists at death (e.g., sold or given away), the gift may be considered adeemed and the beneficiary receives nothing – unless the will provides a substitute or alternate gift or local laws allow compensation or tracing to replacement property. Executors cannot generally substitute other property or cash for an adeemed gift unless authorized by the will or with consent from all affected beneficiaries.
Real Estate: may require assistance of with legal professionals to:
- Transfer title or registration;
- Clear or assume any liens or encumbrances, if any;
- The cost of transferring assets is typically an estate expense, unless a beneficiary requests a special arrangement or expedited service;
- After the transfer the executor must notify the municipality for property tax updates and ensure insurance and utilities are moved out of the estate’s name;
- If multiple beneficiaries receive the same property: For example, “to my three children equally”: the executor shall consider whether co-ownership is practical, if not, the property may be sold and proceeds divided, or one child may “buy out” the others, with valuation and equalization to ensure fairness
Household and Personal Effects: Wills often include a general clause like “I leave all my household and personal effects to my children, to divide among themselves as they agree.” In such cases arrange a collaborative division, such as a scheduled day where family members choose items in turns. If disputes arise or no agreement can be reached, the executor may sell the items and distribute proceeds. For major or valuable items, the executor shall ask beneficiaries to sign receipts for what they take, to avoid later confusion.
Abatement of Gifts: If the estate’s assets are insufficient to pay all gifts in full, the law of abatement determines the order in which gifts are reduced:
- Residuary gifts abate first;
- Then general legacies (e.g., cash gifts);
- Finally, specific gifts (items or property) are reduced, if needed.
In extreme cases, even specific gifts may be partially fulfilled or not delivered at all. This should be communicated clearly and respectfully to affected beneficiaries.
If a beneficiary renounces their specific bequest (e.g., doesn’t want the property), and the will permits flexibility:
- The executor may sell the asset and distribute proceeds, but should obtain written consent from the beneficiary;
- If the gift is refused, it may fall into the residue of the estate and be distributed accordingly;
- The executor should always document these decisions with written renunciations and updated accountings.
Cash vs In-Kind Distribution of the Residue: Residual shares may be distributed either in cash or in kind, depending on the nature of the estate and the preferences of the beneficiaries. In-kind distribution is possible where beneficiaries agree, and values can be equitably allocated. Example: The residue is worth $300,000. Instead of selling everything, one beneficiary receives a vehicle worth $20,000 and $80,000 in cash; the others receive a proportionate mix of assets and cash. Provided each beneficiary receives equal value, and consents in writing, this is acceptable. If beneficiaries do not agree, or if in-kind division would be inequitable or impractical, the default approach is to liquidate assets and distribute the proceeds as cash.
Holdback (Reserve for Final Expenses): Even after obtaining a tax clearance certificate, it is prudent to retain a modest reserve for any final or unforeseen expenses, such as late-arriving tax slips or CRA reassessments, professional fees, final utility or service bills. Hold back 5%–10% of each beneficiary’s share and clearly explain this in your proposal: ”We will initially distribute 95% of each share and retain 5% in reserve to cover any remaining expenses. Once all obligations are confirmed resolved, the reserve will be distributed.”
Missing Beneficiaries: If a beneficiary cannot be located the executor may need to pay their share into court or seek a court order for how to proceed under statutory provisions for missing beneficiaries (e.g., hold in trust for a set period). Never divide a missing beneficiary’s share among others without clear legal authorization.
Final Balances: Sometimes, a small balance remains after all major distributions, e.g., accrued interest on the estate account. Distribute any residual amount proportionally to the residuary beneficiaries. Document it as a final top-up distribution.
Final Report and Closing Communication
- Close the Estate Bank Account.
- Retain Estate Records.
- File Any Final Tax Returns
- Notify Relevant Institutions that the estate is closed: CRA, Banks, investment firms, insurers, Land title office or vehicle registry.
- Final Report: It is best practice to send a Final Report letter to each beneficiary along with their distribution. This promotes transparency and provides formal closure: “Enclosed is a cheque for $X, representing your ___ share of the residue of the Estate of [Name]. Attached is a summary of the estate accounting from the date of death through final distribution. Please review and sign the enclosed Release, confirming receipt of your share and your approval of the administration. Thank you for your cooperation and support throughout this process.”
Need help wrapping up an estate without risking mistakes?
If you’re an executor and you’re not sure about timing, holdbacks, releases, or what to do when a beneficiary pushes back, we can help you map out the safest path forward.
Call 604-669-6580 or email avn@granvillelaw.com to schedule a consultation.