Before proceeding with the final distribution of the estate, the liquidator should ensure that the tax matters of the decedent and the estate have been properly settled.
At the federal level, the liquidator may, in particular, request from the Canada Revenue Agency a certificate of discharge confirming that the amounts known to the Agency have been paid or that acceptable security has been provided.
In Quebec, specific tax procedures must also be completed before the estate’s assets are distributed, including obtaining the required authorization from Revenu Québec where applicable.
It is therefore prudent not to definitively distribute the assets to the heirs before completing the necessary tax procedures.
This step is particularly important because an estate administrator who distributes the assets too quickly may have to pay out of pocket any taxes or amounts that are subsequently claimed from the estate.
The application for authorization is generally filed at the end of the liquidation process, once the tax returns have been filed and all outstanding balances have been paid. Depending on the situation, certain documents—such as the will, the death certificate, and a statement of the estate’s assets—may be required.