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The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

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Freedom 55 Financial is a division of The Canada Life Assurance Company and the information you requested can be found here.

How long does an executor have to settle an estate?

Key takeaways

  • There’s a common-law rule of thumb that an estate’s executor has 1 year from the date of death to settle the estate.
  • There is some flexibility to the timeline depending on the complexity of the estate.
  • There are ways to speed up the distribution of the estate.
  • There are deadlines to pay income taxes for the deceased.

How long does an executor have to settle an estate?

Every estate is different. Some are simpler, some more complex. Sometimes issues arise. That’s why there is no hard and fast timeline. However, according to EstateExec, most Canadian estates can be settled in 6 to 18 months.

What is the “executor’s year”?

There’s a common-law rule of thumb that an estate’s executor has 1 year from the date of death to settle the estate. This includes:

  • Collecting all estate assets
  • Paying all estate debts and liabilities
  • Distributing remaining estate assets to the beneficiaries

There are good reasons for the executor’s year, such as:

Is there a time limit to settle the estate?

While there is an expectation that most estates can be settled within a year, there may be reasons it takes longer.

There can be unforeseen issues such as someone challenging the will, delays accessing bank accounts or selling a business or property, or paying unexpected debts. These issues can extend the time the executor needs.

Can executors take as long as they want?

No, after the executor’s year has passed, a beneficiary can ask a court to compel the executor to pass their accounts.

A judge will consider the estate situation. If the executor is acting in the beneficiaries’ best interest and working as quickly as possible, the judge may side with the executor and give more time. If not, the court may set a timeline and method to pass the accounts.

What is the passing of accounts?

Passing of accounts is the process of submitting accounts to the court for approval. It includes a timeline and a process for:

  • Beneficiaries to review accounts and object to any transactions and omissions
  • The trustee to respond and provide supporting materials
  • Cross-examination of the executor if necessary
  • The beneficiaries to withdraw any objections
  • Any remaining objections to be put before a judge for determination
  • A concluding order approving a specific set of accounts

The passing of accounts process can take a lot of time and can be expensive.

If the estate isn’t settled after 2 years, a beneficiary can apply to the court again.

In some situations, a beneficiary can apply to the court to demand payment from the estate.

In rare cases, a beneficiary can also apply to court to request an executor be removed for inaction or undue delay.

Speeding up distribution of an estate

There are ways you can help quicken the distribution of an estate:

  • Proper estate planning to try to ensure most assets transfer directly to named beneficiaries by right of survivorship and aren’t part of the estate and subject to probate
  • Clear instructions in your will about who gets what
  • Give away assets during your lifetime, reducing the size of the estate and the need for probate
  • Set up a trust and place estate assets in the trust, transferring ownership from you to the trust
  • Ensure you chose an executor who’ll communicate regularly with beneficiaries

If an executor requires help to perform their duties, it’s important to remember there are estate executor services that can help simplify  their role.

Deadlines for paying income taxes for the deceased

It’s also the executor’s responsibility to file income tax returns for the deceased’s final year and, if required, the estate. Any taxes owing must be paid by the due date. If they aren’t, interest will be added to the final tax bill. Penalties may be charged if the return is filed late.

According to Canada Revenue Agency, the due date to file the final return and pay a balance owing is:

  • Apr. 30 of the year following the death (if the death occurred between Jan. 1 and Oct. 31 inclusive)
  • 6 months following the death, on the same calendar day as the date of death (if the death occurred between Nov. 1 and Dec. 31 inclusive)

What's next?

Now that you know more about how long an executor has to settle an estate, you may choose to meet with an advisor, or if your workplace benefits are with Canada Life, contact a health and wealth consultant to:

  • Have an open discussion about your estate planning priorities.
  • Walk through the steps to create your estate plan and get answers to any questions.
  • Discover how you can use life insurance and segregated funds in estate planning.
  • Start building your estate plan.
  • Ask about estate executor services.

The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors. 

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