It is important for the Executor of a loved one's estate to realize the importance of not distributing all of the estate gifts before filing a Certificate of Clearance with Canada Revenue. Canada Revenue Agency cautions Executors in the following way:
As the legal representative, you may want to get a clearance certificate before you distribute any property under your control. A clearance certificate, certifies that all amounts for which the deceased is liable to us have been paid, or that we have accepted security for the payment. If you do not get a clearance certificate, you (the personal representative) can be liable for any amount the deceased owes. A clearance certificate covers all tax years to the date of death (as far back as possibly 10 years.)
It is not a clearance for any amounts a trust owes. If there is a trust, a separate clearance certificate is needed for the trust.
To request a certificate, complete Form TX19, Asking for a Clearance Certificate, and send it to the assistant director, Audit, at your tax services office. Do not include Form TX19 with a return. Send it only after you have received the notices of assessment for all the returns required to be filed and paid or secured all amounts owing. FYI: Inquire with Revenue Canada as they may want from you a certified copy of a Grant of Probate or a Grant of Administration before they will release information to you as the personal representative.