Executor Mistakes to Avoid in Newfoundland and Labrador

Being named executor in a will is an honour that comes with significant legal exposure. In Newfoundland and Labrador, executors are personally liable for errors they make in administering an estate — and the rules here have several distinctive features that catch people off guard.

The following are the most consequential mistakes NL executors make, along with what the consequences look like and how to avoid them.

Distributing Assets Before Getting a CRA Clearance Certificate

This is the single most financially dangerous mistake an executor can make anywhere in Canada, and Newfoundland and Labrador is no exception. Under the Income Tax Act, an executor who distributes estate assets to beneficiaries before obtaining a Canada Revenue Agency Clearance Certificate is personally liable for any taxes the deceased owed that are later assessed.

The sequence must be: file the terminal T1 return (and any T3 trust returns for estate income), wait for the CRA to assess and collect, apply for the Clearance Certificate, and only then distribute the remaining assets to beneficiaries. If you reverse that order and distribute first — only to discover later that the CRA has reassessed the deceased and found an additional $30,000 owing — that $30,000 comes out of your pocket, not the beneficiaries who already received their inheritance.

The Clearance Certificate application process typically takes 4 to 6 months after all taxes are filed. Build this into your timeline and resist beneficiary pressure to distribute early.

Failing to Execute and Register a Deed of Assent

Newfoundland and Labrador is one of the few Canadian provinces where real estate devolves to the executor rather than passing directly to heirs by operation of law. This is the effect of the Chattels Real Act. It means obtaining a Grant of Probate does not transfer property to the beneficiary — it transfers it to the executor, who must then execute a Deed of Assent to formally convey it to the heir.

Executors who skip this step leave the beneficiary in legal limbo. The property still shows in the deceased's name on the Registry of Deeds. Municipal tax rolls in Corner Brook, St. John's, and other municipalities will not update without a valid Deed of Assent registered in the Registry's CADO system. When the beneficiary tries to sell or mortgage the property years later, the broken title chain surfaces — and reopening a long-closed estate to execute a missing Deed of Assent is expensive and slow.

Registration fees at the Registry of Deeds are calculated on the property's value: $100 for the first $500 of value, plus $0.40 for each additional $100, up to a maximum of $5,000. Budget for this and complete it before closing the estate.

Paying Creditors in the Wrong Order

When an estate has debts, the order of payment matters legally. Executors sometimes pay whoever asks first — the credit card company, the landlord, a friend who lent money — without realizing that CRA tax debts, funeral expenses, and preferred creditors under the Bankruptcy and Insolvency Act have priority.

If you pay a lower-priority unsecured creditor before a higher-priority one, and the estate runs out of money before the higher-priority creditor is paid, you can be required to repay the lower-priority payment from your own funds. In an insolvent estate (where debts exceed assets), stop all payments and consult an insolvency trustee before disbursing anything.

Skipping the Gazette Notice to Creditors

An executor's personal liability to unknown creditors does not automatically expire after closing the estate. To formally limit your exposure, you should publish a Notice to Creditors in the Newfoundland and Labrador Gazette, the official provincial publication administered by the King's Printer.

The notice must run once a week for two to four weeks. Costs range from approximately $34.65 for one week to $136.82 for four weeks. Creditors who fail to come forward after proper publication may have their claims barred.

Many executors — especially those handling small or straightforward estates — never know the Gazette exists. Skipping this step leaves the executor potentially exposed to creditors who surface after the estate is closed and distributed.

Acting Before Probate Is Granted

Some actions are permissible before the Grant of Probate is issued; most are not. An executor can secure the property, make funeral arrangements, and notify agencies of the death. An executor cannot liquidate estate assets, transfer property, or access the bulk of bank accounts without legal authority.

Acting without authority — selling the deceased's car before Letters of Probate are issued, for example — can constitute an unauthorized dealing with estate property and expose the executor to liability if the sale price later turns out to be below fair market value or if a beneficiary disputes the transaction.

Banks in Newfoundland and Labrador will typically release funds from an estate account to pay a funeral home directly, even before probate, because funeral expenses are a first-priority debt. This is an exception, not the rule. Everything else waits for the Grant.

Missing the Five-Day Notice Window

Before filing the formal Petition for Probate, an executor must file a Notice of Application (Form 56.04A) with the Supreme Court Registry and wait five clear days. This waiting period allows interested parties to file a Caveat objecting to the appointment.

The mandatory wait catches executors off guard because it is not required in most other Canadian provinces. Filing the full petition immediately after the Notice — without waiting the full five days — will result in the registry rejecting the application.

Additionally, the Notice of Application lapses after six months. If the executor files the Notice and then delays action for more than six months, a new Notice must be filed and fees must be paid again. This is particularly relevant for out-of-province executors who file the Notice before their first trip to the province but then take longer than expected to complete the estate paperwork.

Accepting an Executor Role Without Understanding It

An executor in Newfoundland and Labrador is entitled to compensation under the Trustee Act — up to 5% of the gross realized value of the estate, plus a care and management fee not exceeding 0.4% per year the estate remains open. This is taxable income.

Before accepting the appointment, understand what you are taking on: the legal exposure, the time commitment, and the specific complexity of this estate. An executor who lacks the time, organizational skills, or emotional bandwidth to handle the role can apply to the court to be relieved of the appointment, but this becomes more complicated once the estate proceedings have started.

If you accept the role, document everything: every decision, every notification, every payment, every communication with beneficiaries. Meticulous records are your best protection if a beneficiary ever challenges your conduct or if the estate's accounts are examined.

Not Using the Release to Avoid Passing of Accounts

The formal "Passing of Accounts" — a court audit of every cent the executor received and disbursed — is the traditional way to close an estate in Newfoundland and Labrador. It is public, expensive, and time-consuming.

Executors who have the full agreement of all adult beneficiaries can avoid it entirely. If every adult beneficiary signs a Form of Release (Form 56.29A) and an Affidavit of Execution of a Release (Form 56.29B), these executed releases can be filed with the court, allowing a judge to dispense with the formal accounting and discharge the executor from their duties.

Getting these releases signed before distributing assets — rather than trying to chase down beneficiaries afterward — is the practical approach. Beneficiaries are significantly more cooperative before they receive their inheritance than after.

For a complete step-by-step guide to executor duties in Newfoundland and Labrador — with the exact forms, agency contact information, and deadlines for every stage from initial probate filing to final distribution — the Newfoundland and Labrador Estate Settlement Guide covers the entire process with the specific rules that apply in this province.

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