In What Order Must an Executor Pay Estate Debts in New Brunswick?

If you are an executor or administrator in New Brunswick, you are usually expected to deal with the estate's debts before anything goes to the beneficiaries. That can feel stressful, especially when bills, creditors and family expectations all arrive at once.

This article explains the order in which the law says estate assets are paid, how you can dispute a claim you doubt, how the deceased's taxes fit in, and what can happen if you distribute too early or handle the estate badly. It does not cover making a will, joint accounts, or assets that pass directly to a named beneficiary.

This article covers the law of New Brunswick.

The order of payment from estate assets

The Probate Court Act sets out the order in which estate assets are applied to payments. You work down the list rather than paying whoever asks first.

Which debts sit outside this list, and how they rank, can depend on the facts of the estate. If the estate may not cover everything, get legal advice before paying anyone.

Probate tax and fees: one of the early costs

The probate tax and fees are second on the list, and the tax must be paid before letters issue. For applications filed on or after June 12, 2026, the tax is $200 if the estate does not exceed $20,000. It is $200 plus $5 per $1,000 or part over $20,000 up to $100,000, and $600 plus $15 per $1,000 or part over $100,000.

The tax is calculated on the whole estate, including real property, but the actual value of any encumbrance such as a mortgage is deducted for real property. Payment is made to the 'Minister of Finance for the Province of New Brunswick'.

Disputing a claim against the estate

You do not have to accept every claim as presented. A personal representative may contest a claim against the estate by written notice. The claimant then has 30 days to apply to the Court, or three months if the Court allows. If they do not, the claim is forever barred.

Creditors also face time limits of their own. A proceeding on a cause of action that survives against a deceased person must be brought within two years of the later of the death and the discovery of the claim, with a five-year outer limit from death.

• Keep every claim, invoice and letter in one file.
• Give any written notice of dispute in a way you can prove, and note the date.
• Do not pay a doubtful claim just to end the pressure; ask for advice first.

The deceased's taxes and the clearance certificate

The final T1 return for a death from January 1 to October 31 is due April 30 of the following year. For a death from November 1 to December 31, it is due six months after the date of death. If the deceased or a spouse or common-law partner was operating a business, the filing date is June 15 of the following year for a death from January 1 to December 15, but any balance owing is still due on the regular date.

A T3 return for the estate is due 90 days after the trust's tax year-end. A graduated rate estate can choose its first year-end up to one year after death.

You should notify the CRA with the death certificate (or funeral director's statement) and the will, grant of probate or letters of administration. A long form death certificate from Vital Statistics costs $45 in person or by mail and $40 online.

Before distributing, consider applying for a clearance certificate on Form TX19. Apply only after the returns are filed, assessments received and amounts paid or secured, and not at the same time as filing. The CRA acknowledges the request within 45 days, and assessment can take up to 120 days. Without the certificate, you are personally liable up to the value of the assets distributed. A representative who distributes assets without one can be held personally liable for tax owing.

Accounts, oversight and personal liability

Beneficiaries are not left in the dark. Any person interested in an estate may apply to the Court for a citation ordering the executor to pass accounts. The accounts include a full inventory and statements of money received, disbursed and remaining, and each interested person is notified.

When accounts are passed, the Court may make a full inquiry into the whole property of the deceased. Where misconduct or neglect caused loss, the Court may order the personal representative to pay damages. Accounts approved by the Court bind the interested persons who were notified, unless mistake or fraud is shown.

An executor need only provide an inventory unless an interested person or creditor requests an account.

What to do next

• Get proof of your authority, such as letters probate or letters of administration.
• List all assets and debts, and keep a record of every payment.
• Pay in the statutory order, and hold off on distributions to beneficiaries.
• Give written notice to dispute any claim you question, and diarize the deadlines.
• File the final T1 and any T3 return on time.
• Apply for the TX19 clearance certificate once returns are filed and amounts paid or secured.
• Speak to a lawyer or accountant if the estate may be short of funds.

Frequently asked questions