Passing of Accounts in the NWT: Final Accounting After Probate

The Grant of Probate arrives in the mail and it feels like the finish line. It isn't — it's the starting gun. The grant gives you the authority to act; now you have to actually collect the assets, clear the debts, satisfy the tax authorities, account to the beneficiaries, and only then distribute. Skip a step or distribute too early and you, personally, can be on the hook for it. Here's what happens between holding the grant and closing the estate in the Northwest Territories, in the order it needs to happen.

Step 1: Collect Assets and Notify Creditors

With the grant in hand, present it to each financial institution and the Land Titles Office to collect or transfer the estate's assets. The grant is what unlocks sole-name accounts and lets you transfer real property held solely by the deceased.

At the same time, open the creditor claims window. You publish a Notice to Creditors (Form 41) in a newspaper circulating where the deceased usually lived. This isn't filed with the court — it's published — and it establishes a 30-day window after the last publication for creditors to come forward with claims against the estate. Running this notice properly helps protect you from unknown creditors surfacing after you've distributed. Don't distribute to beneficiaries until this window has closed and you have addressed claims under applicable law.

Step 2: Pay Debts and Settle Taxes

Once the creditor window closes, review the claims and pay or otherwise address valid claims in accordance with applicable law before final distribution. If the estate is insolvent or a claim is disputed, obtain legal advice before paying creditors.

The tax step is the one that most often delays closing, and it's non-negotiable:

• File the deceased's terminal T1 return. It's due April 30 of the year following death, or six months after the date of death, whichever is later.
• Apply for and receive a CRA Clearance Certificate before final distribution. The clearance certificate confirms all taxes are paid. If you distribute the estate without it and the CRA later assesses tax owing, you as the executor are personally liable for the shortfall. This is the single most important reason not to rush the final payout.

Because the clearance certificate can take months to issue after the terminal return is assessed, final distribution may happen well after the grant.

If you're unsure how to sequence the creditor notice, the tax filings, and the clearance certificate without exposing yourself to liability, the Northwest Territories Probate Guide lays out the order of operations and the exact NWT forms for each stage.

Step 3: Prepare the Final Accounting

Before distributing, you prepare a final accounting — a complete record of the estate from the date of death to closing. It shows:

• The opening inventory (the same asset values you put on Schedule 5 in your application)
• Everything collected, including interest, refunds, and amounts owed to the deceased
• Every payment out — debts, taxes, funeral costs, administration expenses
• Any executor's compensation claimed
• The resulting balance available for distribution, and the proposed split among beneficiaries

The opening inventory from your original probate application is the baseline the entire accounting is measured against, which is why an accurate inventory at the start makes this step far easier. The beneficiaries are entitled to see this accounting and to understand exactly what happened to the estate.

Step 4: Get Releases — or Formally Pass Accounts

Here you have two paths, and the choice depends entirely on whether the beneficiaries are satisfied.

The easy path — Form 55 (Release). If the residuary beneficiaries review the accounting, each may sign a Form 55 Release confirming they've seen the accounts. This document is kept privately — it is not filed with the court. Whether releases are sufficient for the estate depends on the circumstances; use the formal passing-of-accounts route where appropriate.

The formal path — Form 56 (Passing of Accounts). If a beneficiary refuses to sign a release, disputes the accounting, or simply can't be reached, you can apply to the court to pass accounts using Form 56. The court reviews the accounting formally. Passing of accounts is more common in disputed estates, where a beneficiary contests the executor's handling, but it may also be appropriate whenever you can't get clean releases from everyone.

The whole point of either path is the same: you do not want to distribute the estate and then face a beneficiary claiming you mishandled it. A signed release or a court order is your protection, and you should have one or the other before the money leaves the estate account.

Step 5: Distribute and Close

With debts paid, taxes cleared, and either releases or a court order secured, make the final distribution according to the will (or the intestacy rules, if there was no will). Keep records of every payment. Once the funds are out and you've retained copies of the accounting, the releases or the passing order, and the clearance certificate, the estate is closed.

A note on authority and timing: the executor's authority began at the moment of death — the same moment any Personal Directive (the deceased's health agent appointment) became void, since a directive only governs decisions while the person is alive. From death forward, you are the one acting for the estate, and that authority runs until the estate is fully distributed and closed.

Closing an estate cleanly is mostly about sequence and proof: notice the creditors, clear the debts and taxes, account honestly, get your releases, then distribute. For the full post-grant checklist, the NWT forms at each stage, and guidance on choosing between informal releases and a formal passing of accounts, the Northwest Territories Probate Guide takes you from the day the grant arrives to the day the estate is closed.

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