This section lists all of the distributions to date, including all asset distributions recorded in the Current Inventory page and cash distributions in the Estate Accounting page. Although similar to the Estate Accounting section, which lists all transactions made by the estate, this section only logs distributions to beneficiaries (ie, it does not include the payment of the deceased's liabilities or of the fees the estate incurs).
Assets and cash distributions can also be recorded from this section.
Options to distribute cash or an item are separate buttons located at the top of the screen. In the following example, we will illustrate how to distribute a non-cash item in kind to a beneficiary:
- Date the distribution
- Select the item type and then asset
- The current market value will equal the current value of the item in the inventory, this can be changed if necessary, directly inside this modal
- Choose which account (income or capital) for the entries to be made to
- The beneficiary in this example is pre-determined (as is the share %) because this asset was flagged as a bequest to “Gerald Jawicz” – in order to change this, it would need to be revised in the Inventory section
- Similar to other sections, the ellipsis button allows you to generate a report of all the distributions made to date of both probate/non-probate items
When recording an asset distribution in this section, select the beneficiary (who must have been previously added in the Contacts section), the asset, and the percentage of the asset that the beneficiary is entitled to receive.
It's also important to note that some wills may dictate that rather than have the estate pay off a certain liability, it should instead be passed on to an heir with the asset that secures it (eg, a house is passed on to an heir along with the mortgage (hypothec in Quebec) on the house). If the heir accepts the asset and the liability, they can both be distributed in this section. If the heir refuses the condition, the asset and the liability would become part of the estate as a whole, with the debt being assumed by the estate and the remaining value being distributed to the Universal Beneficiaries as part of the estate's residue.
To record a cash distribution to an heir, select the Distribute Cash button and enter the Beneficiary's name.
This transaction is distinct from withdrawing cash from the Estate Account to make a payment towards the deceased's liabilities or the fees the estate incurs as part of the estate settlement process. This transaction will deduct the amount from the Estate Account and the Residual Estate Value and be logged as a Distribution to an heir. If the heir is a Universal Beneficiary, the amount will be taken from their share of the Residual Estate Value.
For more information on if a transaction should be logged to the Capital or Income Account, see here.
Important: although the executor can distribute assets prior to receiving the Clearance Certificate from the CRA, they must ensure that if they do, the estate is solvent, ie, that it has enough funds to cover all liabilities; by distributing assets prior to receiving the Clearance Certificate from the CRA, the executor becomes personally liable for any unpaid amounts, up to the value of the assets distributed, plus interest.