How long should an executor hold back funds before distributing the estate in Ontario?

Ontario executors are wise to hold back funds for several overlapping periods before making a final distribution. The main considerations are: the six-month window after the probate certificate during which a dependant support claim may be brought; the time needed to receive final tax assessments and a CRA clearance certificate; and the period during which creditors may come forward, especially if a creditor notice has been advertised.

A reasonable and common practice is to hold a meaningful reserve from the estate until the CRA clearance certificate is received, which can take many months after the final tax returns are filed. An executor who distributes everything and then discovers an unpaid tax obligation, an unexpected creditor, or a dependant support claim can be personally liable for the shortfall.

Partial or interim distributions to beneficiaries are entirely appropriate during the administration period, provided a sufficient reserve is maintained. Executors should be transparent with beneficiaries about why the holdback is in place and when a final distribution is expected.