Proceeds Held in Trust & Interim Distributions (Ontario)

One of the smartest ways to keep a sale moving during a separation is to separate the market decision from the money decision. You do that by closing the sale in the ordinary way and holding the net proceeds in a lawyer’s trust account until distribution is agreed or ordered. Buyers get certainty. You get time and protection. Here’s how that usually feels from the seller’s side.

On closing day, standard pay-outs happen first: mortgages and secured lines are discharged, property taxes are adjusted, real estate commissions and legal fees are paid, and any agreed credits or holdbacks are applied. What remains—the net sale proceeds—is deposited to trust. You’ll receive a statement of adjustments and a trust ledger so you can see the math in black and white. Nothing about this is exotic; it’s how Ontario closings work when there are outstanding issues to resolve.

The question then becomes when and how funds are released. The cleanest path is a signed agreement between the parties (sometimes called minutes of settlement or a consent) that tells the lawyers exactly what to do: how much goes to each person, whether any amounts remain in trust for taxes or renovations, and what the timeline is. If agreement isn’t ready, funds simply remain in trust, earning nominal interest, until a court provides direction. It’s not about punishment; it’s about protecting both sides from premature decisions.

Sometimes you’ll ask about interim distributions—partial releases to cover practical needs like a rental deposit, movers, or legal fees. Whether that happens depends on the overall picture: what debts remain, how contentious the file is, and whether there’s enough money to make a small release without prejudicing the final math. If both sides consent, interim funds can move quickly. If not, you’ll need legal advice on the best route to request them. The key is to be specific: amount, purpose, and documentation.

Because proceeds-in-trust can feel abstract, communication matters. Ask your lawyer to send a short note right after closing confirming the trust balance and the next procedural step. If timelines stretch, ask for a monthly snapshot so you’re not haunted by question marks. Meanwhile, don’t let the existence of a trust balance slow your logistics: book movers, close utilities, transfer mail, and start life in your next place. The trust account is doing its job—buying space for a careful decision that doesn’t derail your closing.

Used wisely, a proceeds-in-trust plan is an ally, not a delay tactic. It turns a single, high-stakes decision into two manageable ones: sell well now; distribute fairly with full information later. In a season where certainty is rare, that’s a welcome kind of patience. Information only—Ontario-specific. Please obtain legal advice for your situation.