Can Creditors Go After Beneficiaries for an Estate's Debts in Ontario?

Generally, estate debts are dealt with before beneficiaries receive their share, and whether a creditor could ever reach a beneficiary depends on the facts. When a person dies, their property passes to the estate trustee, who holds it for the people entitled to it after the deceased's debts are paid.

An estate trustee who gives notice to creditors of the kind the court would have directed may distribute once the time in the notice has expired, and is then not liable to a creditor whose claim they had no notice of. That protection does not cover claims the trustee already knows about. Once a personal representative is served with notice of a dependant's support application, they must not distribute unless everyone entitled to apply consents or the court orders it, and one who distributes in breach is personally liable to pay the amount distributed, though reasonable advances for support are allowed. A trustee who distributes without a CRA clearance certificate can be personally liable for unpaid amounts, but not for more than the value distributed.

Whoever inherits mortgaged property generally takes it subject to the mortgage. Because how this applies depends on your situation, it is worth confirming with a lawyer if you are worried.