How to Notify Creditors of a Death in Manitoba

As executor, one of your most important jobs is making sure debts are dealt with before the estate is handed out. If you pay beneficiaries first and a creditor appears later, you could be left answering for it.

This article walks through who to contact, how the formal notice works in Manitoba, how to look for debts nobody mentioned, and what to do before you distribute. Details such as timing and wording depend on your estate, so a lawyer can confirm them.

This article covers the law of Manitoba.

Why notice to creditors matters

Estate assets must cover debts before will beneficiaries inherit. Under The Trustee Act, a personal representative who publishes the required notice to creditors, in The Manitoba Gazette and a local newspaper, may distribute after the notice period. They are not liable for assets distributed to a person whose claim they did not know of at the time of distribution.

The protection is about claims you did not know of. If you knew of a debt, you should not rely on the notice to ignore it.

Who to contact directly

Publishing a notice does not replace contacting the creditors you already know about. Make a list and write to each one. Common ones include:

• Banks, credit card issuers and lenders.
• Mortgage holders and anyone with security over property.
• Utilities, landlords, cell phone and other service providers.
• The Canada Revenue Agency, for the final return.
• Anyone who paid for the funeral and is owed reimbursement.

Funeral and burial can be arranged by the executor, next of kin or a friend, and the estate pays. Keep receipts.

If the deceased had a surviving spouse or common-law partner, they may also have a claim under The Family Property Act. The personal representative must serve the survivor with a prescribed notice within one month after the grant, and must not distribute until the survivor consents in writing, the time to apply expires, or an application is decided.

How the notice works and what to prepare

The formal notice is published in The Manitoba Gazette and a local newspaper. The exact wording, the length of the notice period and the deadline for claims should be confirmed with a lawyer, because distributing too early defeats the purpose.

• A list of the creditors you already know about, and a record of when you contacted each one.
• The date of death and the date the grant was issued, so you can work out timing with your lawyer.
• Copies of the death certificate, in case creditors ask for one.
• Receipts for the funeral and other costs you have paid.
• Your questions for a lawyer about wording, the notice period and the claims deadline.

For creditors you write to directly, enclose a copy of the death certificate if they ask for one. Manitoba Vital Statistics charges $30.00 for each certificate or certified copy. Keep copies of every letter and reply.

Finding hidden debts

Going through the deceased's personal papers is a practical way to find out who they may have owed money to. Look beyond the obvious.

• Go through several months of mail, email and bank statements for recurring payments.
• Check for loans guaranteed for someone else, lines of credit and store cards.
• Look for leases, vehicle financing and unpaid property taxes.
• Ask family and the deceased's accountant about debts or business obligations.
• Review the most recent tax returns for balances owing.

If the deceased or their spouse or common-law partner ran a business, the final return deadline is June 15 of the following year for deaths between January 1 and December 15, but the payment deadline is unchanged: April 30 of the following year for a death between January 1 and October 31, and within six months of the date of death for a death in November or December.

Before you distribute: what to do next

Notice does not end every risk. It does not stop creditors from following estate proceeds into the hands of recipients, it does not apply to heirs, next of kin or legatees claiming as such, and mortgagees and unpaid vendors keep their remedies against the land.

Taxes matter too. For a death between January 1 and October 31, the final return and payment are due by April 30 of the following year; for a death between November 1 and December 31, within six months of the date of death. The CRA says the legal representative should obtain a clearance certificate before distributing, because distributing without one while tax is owing can make the representative personally liable up to the value of the assets distributed.

If the estate looks short of money, stop and get advice before paying anyone, since the order in which debts are paid can matter.

Frequently asked questions