What debts must an executor pay before distributing an estate in Ontario?

Before distributing anything to beneficiaries, an Ontario executor must pay the deceased's valid debts. These typically include funeral and burial expenses, outstanding income taxes, HST or other CRA obligations, credit card balances, personal loans, lines of credit, and any court judgments. The costs of administering the estate — including legal and accounting fees and the executor's compensation — are also payable from the estate before beneficiaries receive their share.

Ontario follows a priority scheme. Secured creditors (such as mortgage lenders) have first claim over the specific assets securing the debt. After that, estate administration costs and funeral expenses are generally paid, followed by unsecured creditors. Beneficiaries receive only what remains.

If the estate does not have enough assets to pay all debts — an insolvent estate — beneficiaries receive nothing, and even some creditors may not be paid in full. An executor who pays beneficiaries before clearing all debts and tax obligations can be held personally responsible for the shortfall.