Highlights:
- What to do before your parents pass to make things easier
- The steps to take to close your parent’s estate
- How to protect and grow your inheritance
Losing a parent is one of the hardest things you’ll ever go through.
And in the middle of all that grief, you’re suddenly expected to handle paperwork, legal stuff, and big financial decisions.
Being thrown into everything is overwhelming - suddenly you have to know how to deal with things like probate, filing final tax returns, and figuring out how to divide up the estate.
This simple guide gives a quick overview so you’ll feel more prepared when the time comes.
Start before anything happens
If your parents are still around, you’re in a good place.
You can get ahead of potential stress just by talking with them:
• Ask where they keep their will and other important documents
• Make sure they’ve named a power of attorney
• Get clear on their accounts, their wishes, and who they’ve chosen to handle everything
Have a team in place
It also helps if your parents can line up support in advance, like an estate lawyer and accountant.
They will support you through the process and make it faster, easier, and less likely that you’ll miss something important or make costly mistakes.
You can also bring in professionals at any point to help take the load off. In most cases, the cost is covered by the estate itself - so it’s not on you!
Understand the will
The will is basically your “road map” to follow for the estate.
If you’re the executor, it’s your job to look after things like protecting the estate’s assets, paying off debts and taxes, and distributing the inheritance.
You might have to deal with probate
Depending on where your parents lived you might need to apply for probate, which is the legal process that confirms the will is valid.
It also gives you the authority to do your executor duties like accessing accounts, selling property, and distributing assets.
There might be additional probate fees - in some places it’s a flat fee, in others it’s a small percentage (like 1.5% for estates valued over $50,000).
What if there is no will?
If your parents didn’t have a will or it’s missing, the province’s default rules decide who inherits what.
Someone (usually a close family member) will need to apply to become the estate administrator.
Without a valid will the process can take longer, be more expensive, and increase the chances of confusion or conflict among family members.
Manage assets and accounts
Part of settling an estate involves figuring out what your parents owned — and what needs to happen with each asset. That includes property, bank accounts, investments, vehicles, insurance, and even digital assets.
You may need to:
• Locate and secure physical assets (like the family home or vehicles)
• Contact banks and financial institutions to freeze or transfer accounts
• Get valuations for real estate, investments, or personal items
• Decide whether to sell, transfer, or distribute each asset
Handle the home
If you inherit the family home, you have a few options: you can keep it, sell it, or rent it out.
If it was your parent’s principal residence, there’s usually little to no capital gains tax if you sell it shortly after inheriting.
But if it was a cottage or a second property, it’s a different story. You’ll likely owe tax on the increase in value since they bought it - and that tax bill comes due on their final return.
Remember registered accounts
Registered accounts often have named beneficiaries - and that makes a big difference.
If a beneficiary is listed, the funds usually bypass the will and go directly to that person. It’s faster, easier, and avoids probate fees.
But if no one is named (or the estate is listed as the beneficiary), the money becomes part of the estate. That can mean delays, more paperwork, and possibly a bigger tax bill.
Don’t overlook digital assets
Online accounts are easy to forget but important to handle.
It can be everything from email and cloud storage to social media, subscription services, and even cryptocurrency.
If your parent didn’t leave a list of logins, you may need to go through account recovery processes or provide legal documents to gain access.
Deal with debts
Before any inheritances can be distributed, the estate’s debts need to be identified and paid.
Part of the job of an executor is to gather a full picture of what’s owed, from credit cards and lines of credit to mortgages, car loans, and even utility bills.
You'll also need to:
• Notify creditors of the death
• Redirect or cancel recurring payments
• Check for any joint debts or co-signed loans
• Use estate funds (not your own) to settle what’s owed
Close the estate
After debts are paid and most of the paperwork is handled, you’re nearly at the finish line. Here are some of the final steps to close the estate:
File the final tax return
This is known as the terminal return, and it includes any income your parent earned in their final year, plus capital gains from things like cottages, second properties, or non-registered investments.
The return is usually due by April 30 of the following year, or six months after the date of death - whichever is later.
Request a clearance certificate
Before distributing any inheritances, it’s smart to request a clearance certificate from the CRA.
This confirms that all taxes have been paid and protects you from being held personally responsible if something was missed.
Distribute the inheritance
Once taxes are settled and the clearance certificate is in hand, you can distribute what’s left of the estate. This might include:
• Specific gifts (like a sum of money or personal belongings)
• A percentage share of the remaining estate
• Property or investment accounts transferred to beneficiaries
You may also need to prepare the final accounting to show how the estate was managed and what’s being distributed.
Protect your inheritance
Receiving an inheritance or life insurance payout can feel like a lot of money all at once.
Before rushing into anything, take a moment to come up with a plan.
You might want to take a portion of it and spend it on something you’ll enjoy, and invest the rest.
Passiv makes it easy to manage and grow your investments.
You can link your brokerage accounts, set your target portfolio, and invest with one click.
The reports make it easy to see your rate of return and progress, so you can see how the gift from your parents grows over time.
