Can a Saskatchewan Executor Distribute Assets Before Probate?

You have been named as executor, or you are a beneficiary waiting for your share, and you are wondering whether anything can be handed out before the court issues a grant. It is a reasonable question, because probate can take months and people often feel pressure to move quickly.

The honest answer in Saskatchewan is that it depends on the asset, and on what else is still unsettled. This article explains which assets need a grant, which pass outside the estate, and the risks of distributing too early.

This article covers the law of Saskatchewan.

Which assets actually need probate

The Court of King's Bench says the only asset that absolutely requires probate is an interest in land, including mineral rights, registered solely in the deceased's name. For other financial assets, the bank, credit union or trust company decides whether it needs Letters, so the first step is to ask the institution.

For small estates there is also an exception. Letters may not be required where the estate is $25,000 or less and includes no real property, and for Part II assets such as jointly owned property, assets with a named beneficiary and assets outside Saskatchewan. Real estate always requires Letters for land transactions with Information Services Corporation (ISC).

If a grant is needed, the court fees on a standard application are a Local Registrar fee of $200 plus a levy of $7.00 per $1,000 (or portion thereof) of Total Part 1 Assets on the Statement of Property. Assets passing outside the estate are excluded, and for real estate only the equity counts. For estates of $15,000 or less, the local registrar prepares the papers if the applicant is a Saskatchewan resident entitled to letters and not a creditor, and the Local Registrar fee is then $300 plus the same $7.00 per $1,000 levy.

Assets that pass outside the estate

Some property never becomes part of what the executor distributes. These items pass outside probate:

• Land held in joint tenancy with survivorship.
• Bank accounts with survivorship.
• Life insurance with a named beneficiary.
• RRSPs and RRIFs with a named beneficiary.

Those assets go to the survivor or named person under their own terms. They are not the executor's to hand out, so there is nothing to distribute early.

Why land and early gifts are different

Letters Probate or Letters of Administration with Will Annexed are required for any land transaction with ISC if the estate includes real estate. Land must first be transferred into the personal representative's name, and only if the estate is not insolvent can it then go to beneficiaries or a purchaser. Selling estate land requires written consent from all beneficiaries. If debts exceed available funds, the property may have to be sold to pay them, and beneficiary consent is then not required, though it is recommended.

Even where an institution will release money without a grant, the executor still has duties that come first. Debts of the deceased must be paid before any gifts in the will go to beneficiaries.

The province lists other common executor duties: finding the will, notifying agencies, securing and valuing assets, publishing a Notice to Creditors, depositing money in an estate account, filing returns and obtaining a CRA Final Clearance Certificate, paying debts by priority, and accounting to beneficiaries within two years.

The risks of distributing too early

• Tax: if a legal representative distributes assets before getting a CRA clearance certificate and tax is still owing, they can be held personally liable up to the value of the assets distributed.
• Creditors: a Notice to Creditors should be published once a week for two consecutive weeks in a newspaper nearest the deceased's last residence. Debts are paid before gifts.
• Family claims: distribution may be delayed six months after Letters are obtained where a dependant may claim under The Dependants' Relief Act, 1996 or a spouse may apply for division of family property.
• Final distribution cannot occur until the CRA clearance certificate is received.

The clearance certificate is requested on Form TX19 only after returns are filed, notices of assessment are received and tax is paid, and the assessment can take up to 120 days. The final return is due April 30 of the following year if death was between January 1 and October 31, or six months after death if it was between November 1 and December 31. If the deceased or their spouse ran a business and death was between January 1 and December 15, the filing date may be June 15 of the following year, but payment is still due on the regular date.

If the estate may be insolvent, debts are paid in a set priority, and the province recommends consulting a lawyer and, if needed, applying to the court for directions.

What to do next

• Make a list of every asset and note how each is held (solely, jointly, or with a named beneficiary).
• Ask each bank or institution whether it will require Letters before releasing funds.
• Hold back any gifts until debts, taxes and the clearance certificate are dealt with.
• Keep records of every payment, because you must account to beneficiaries within two years.
• Speak with a lawyer or accountant before making any early payment to a beneficiary.

Frequently asked questions