Can an executor distribute the estate before getting a CRA tax clearance certificate?

Technically, an Ontario executor can distribute estate assets before receiving a Canada Revenue Agency (CRA) tax clearance certificate — there is no law that absolutely prohibits distribution in advance. However, doing so exposes the executor to significant personal risk.

A clearance certificate from CRA confirms that all income taxes, interest, and penalties owing by the deceased and the estate have been paid or secured. If the executor distributes the estate without one and CRA later assesses additional taxes, the executor can be held personally liable for any tax shortfall, even if the assets have already been given out to beneficiaries.

For this reason, most estate lawyers and accountants strongly advise executors to wait for the clearance certificate before making a final distribution. Partial or interim distributions may be appropriate while the certificate is pending — but holding back a reasonable reserve to cover any final CRA assessment is standard practice. Clearance certificates can take months to process, so requesting one promptly after filing the estate's final tax returns is important.