How to Close an Estate in Nova Scotia: Final Steps for Executors

You have paid the debts you know about and the end is in sight. Before you hand over the last cheques, there are final steps that protect you as executor, and skipping them is how personal liability tends to arise.

This article sets out the general sequence in Nova Scotia. Some steps depend on the facts of your estate and are best confirmed with an accountant or lawyer.

This article covers the law of Nova Scotia.

Check the creditor period first

Advertising in the Royal Gazette is a statutory requirement for every estate opened in Nova Scotia. The advertisement runs six months, after which the estate can move to distribution. Creditors file a Notice of Claim (Form 32) within that period and serve a copy on the personal representative.

If no claim is filed, or assets sufficient to cover filed claims are retained, no action lies against the representative for paying debts and distributing. Distributing earlier risks personal liability for unpaid claims.

There are exceptions. A representative who distributes to persons whose claim or address they had no notice of is not liable for those proceeds, and a creditor who misses the advertising period may claim only with the court's prior consent. After 12 months from the grant, or longer if the court allows, claims presented must be paid and distribution made.

File the inventory and keep your records

After the grant, the personal representative files a full inventory in Form 29 within 3 months. Its affidavit adjusts probate tax under s. 87(1) of the Probate Act, which can mean no change, an additional payment or a refund. The estate is valued as of the date of death.

You must keep accurate records of all property and debts of the estate. These records become the base for your final accounts, so keep receipts, statements and a running ledger.

Final accounts, or a way around them

Passing accounts means asking the Probate Court to review what you did. You must apply within 18 months of the grant unless the court orders an extended period. The rules also refer to applying when you are seeking a discharge or when the court orders it, so ask a lawyer how that fits your estate.

• Use Form 39 for an application with a hearing or Form 40 without a hearing, with your affidavit (Form 43) filed not less than 10 days before the passing date.
• The hearing date is not less than 45 days from receipt of the application.
• A beneficiary who objects files a Notice of Objection (Form 42) at least 10 days before the passing date; without one they are treated as consenting.
• The court can require amendments, set commission and appoint an accountant.

Accounting may be dispensed with using Form 37 (your affidavit that accounting is not required) and Form 38 (consent), together with a release (Form 36) from the beneficiaries. Whether that route fits depends on who the beneficiaries are and whether they all agree. If a beneficiary is a minor, ask a lawyer how the release is handled.

Commission, releases and final distribution

On settlement the personal representative may be allowed, beyond actual and necessary expenses, a commission not exceeding five percent of the amount received, and the court sets it. The court may consider the estate's size, care and responsibility, time spent, skill and the success of the administration. No percentage is automatic.

If the will sets out a fee, it generally replaces the statutory commission unless the executor renounces it within the time limit. A fee agreement between the testator and a proposed representative binds neither the court nor beneficiaries unless it is written into the will.

Before you make the final distribution, check that the six-month creditor period has ended and that filed claims are paid or covered by assets you keep back. If you are using the route that dispenses with accounting, a release (Form 36) from the beneficiaries is part of it. If land is being transferred, a grant is generally required and is filed with the Land Registration Office, though land held as a joint tenant passes by survivorship without a grant.

What to do next

Final tax matters depend on the estate and on what has already been filed. How and when to deal with them before a final distribution is worth confirming with an accountant or lawyer.

• Confirm the six-month advertising period has ended and review every claim filed.
• Make sure the Form 29 inventory has been filed and any probate tax adjustment dealt with.
• Calendar the 18-month accounting deadline from the grant.
• Choose between passing accounts and the Form 36, 37 and 38 route.
• Ask an accountant about final tax returns and clearance before you distribute.
• Keep accurate records of all estate property and debts, and store them safely once you have distributed.

Frequently asked questions